M/s. KAMSHET INVESTMENTS P. LTD., MUMBAI V. ITO Wd. - 2(2)(2), MUMBAI

ITA 701/MUM/2006

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62708 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 12-06-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 31-01-2006
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Recovery proceedings; Cost of acquisition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI E BENCH MUMBAI BENCHES, MUMBAI BEFORE SHRI G E VEERABHADRAPPA, PRESIDENT & SHRI V IJAY PAL RAO, JM ITA NO. 1310/MUM/2005 (ASSESSMENT YEAR 2001-02) & ITA NO. 701/MUM/06(ASSESSMENT YEAR 2002-03) KAMSHET INVESTMENT P LTD THE EDNCLAVE NEW PRABHADEVI ROAD OFF A M MARG PRABHADEVI, MUMBAI 400 025 VS THE INCOME TAX OFFI9CER WARD 2(2)(2) MUMBAI (APPLICANT) (RESPONDENT) PAN NO. AAACK2207N ASSESSEE BY NONE REVENUE BY SH B JAYAKUMAR DT.OF HEARING 12 TH JUNE 2012 DT OF PRONOUNCEMENT 18 TH , JULY 2012 PER VIJAY PAL RAO, JM THESE TWO APPEALS BY THE ASSESSEE ARE DIRECTED AGAI NST TWO SEPARATE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS) DATED 2 7/09/2004 AND 28/11/2005 FOR THE ASSESSMENT YEARS 2001 02 AND 2002 03 RESPEC TIVELY. 2 THE ASSESSEE HAS FILED A LETTER SEEKING ADJOURNME NT OF THESE APPEALS ON THE GROUND THAT THE CHARTERED ACCOUNTANT, WHO IS LOOKIN G AFTER THE MATTER HAS GONE OUT OF TOWN. THESE TWO APPEALS ARE VERY OLD APPEALS AND PENDING SINCE 2006. FURTHER, THE ASSESSEE ALSO GOT STAY ORDERS AGAINST RECOVERY OF TAX; BUT THEREAFTER THESE APPEALS ARE BEING ADJOURNED MOST OF THE TIME ON THE REQUEST OF THE ASSESSEE. IT TRANSPIRES FROM THE RECORD THAT THESE APPEALS WE RE ADJOURNED ON EARLIER OCCASIONS ON 1/08/2011, 8/09/2011,12.1.2012, AND ON 9/4/2012 ON THE REQUEST OF THE ASSESSEE ON SIMILAR GROUNDS. IT APPEARS FROM THE RECORD THA T THE ASSESSEES CONDUCT HAS BEEN CASUAL AND NON-COOPERATIVE TO THE HEARING OF THE AP PEALS. THIS TRIBUNAL HAS ITA NO. 1310 & 701 KAMSHET INVESTMENT P LTD 2 EXPRESSED SERIOUS DISPLEASURE ON THE CONDUCT OF THE ASSESSEE DURING THE ARGUMENTS ON 12.9.2006 WHEN AFTER HEARING THE LD COUNSEL FOR THE ASSESSEE AT LENGTH THE BENCH WHILE HEARING THE LEARNED DR; BUT SUDDENLY THE LD C OUNSEL FOR THE ASSESSEE FORCED THE BENCH TO ADJOURN THE HEARING OF THESE APPEALS SINE-DIE . THE LEARNED COUNSEL FOR THE ASSESSEE WANTED TO FILE OF A COPY OF BOARD MEET ING OF M/S JINDAL VIJAYNAGBAR STEEL LTD (JVSL) BUT TILL DATE NOTHING HAS BEEN FIL ED. ALL THESE SHOW THAT THE ASSESSEE IS NOT SERIOUS ABOUT THE HEARING OF THESE APPEALS; DESPITE THE FACT THAT THESE APPEALS ARE CLASSIFIED AS OLD APPEALS ON BOARD AND ALWAYS GIVEN PREFERENCE IN HEARING. 3 IN VIEW OF THESE FACTS AND CIRCUMSTANCES, WE REJE CT THE ADJOURNMENT REQUEST OF THE ASSESSEE AND PROPOSE TO HEAR AND DISPOSE OF THE APPEALS EX PARTE. 4 FOR THE ASSESSMENT YEAR 2001-02, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT (APPEALS) ERRED IN CONFIRMING THE FINDINGS OF THE LEARNED ASSESSING OFFICER THAT THE TRANSACTION OF PURCHASE OF SHARES OF JINDAL VIJAYNAGAR STEEL LIMITED BY THE APPELLANT WAS NOT A BONAFIDE BUSINESS OR INV ESTMENT TRANSACTION. 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT (APPEALS) ERRED IN CONCLUDING THAT FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAINS / LOSS IN THE SUBSEQUENT YEAR, THE LE ARNED ASSESSING OFFICER IS FREE TO ADOPT THE COST PRICE KEEPING IN VIEW THE PREVALEN T MARKET PRICE ON THE DATE OF PURCHASE. 3 IN VIEW OF THE ABOVE, IT IS RESPECTFULLY SUBMITTED THAT THE OBSERVATIONS IN RESPECT OF THE ABOVE TRANSACTION, BY THE LEARNED ASSE SSING OFFICER AND CONFIRMATION THEREOF BY THE LEARNED CIT (APPEALS) AR E UNJUSTIFIED AND UNWARRANTED. ACCORDINGLY, THE APPELLANT PRAYS THAT TH E SAME BE STRUCK DOWN. 4.1 FOR THE ASSESSMENT YEAR 2002 03 THE ASSESSEE RAISED THE FOLLOWING GROUNDS: 1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) [HEREINAFTER REFE RRED TO AS CIT(A)J ERRED IN CONFIRMING THE RE-COMPUTATION BY THE LEARNE D ASSESSING OFFICER OF ITA NO. 1310 & 701 KAMSHET INVESTMENT P LTD 3 LONG-TERM CAPITAL GAINS AT RS. 1,63,00,000 AS AGAIN ST THE LONG-TERM CAPITAL LOSS OF RS. 4,53,96,552 DECLARED BY THE APPELLANT IN ITS RETURN OF INCOME. 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN IGNORING THE COST OF ACQUISITION OF S HARES OF JINDAL VIJAYNAGAR STEEL LIMITED ON THE GROUND THAT THE TRANSACTION OF PURCHASE OF SHARES WAS A SHAM TRANSACTION. THE LEARNED CIT (A) FAILED TO APP RECIATE THE SUBMISSIONS AND EXPLANATIONS GIVEN BY THE APPELLANT IN THIS BEH ALF. 3 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND I LAW, THE LEARNED CIT (A) FAILED TO APPRECIATE THAT ONCE THE PURCHASE P RICE IS WORKED OUT CONSIDERING PREVAILING MARKET QUOTATION AT THE RELEV ANT TIME, THE SALE PRICE THEREOF SHOULD ALSO HAVE BEEN WORKED OUT CONSIDERING THE PREVAILING MARKET QUOTATION AT THE RELEVANT TIME. IT IS NOW A SETTLED LEGAL POSITION THAT THE ASSESSEES VERSION CAN BE ACCEPTED IN TOTO OR REJECT ED IN TOTO. 5 THE CONTROVERSY AND ISSUES IN BOTH THE ASSESSMENT YEARS ARE ARISING FROM THE SAME FACTS AND CIRCUMSTANCES AND RELATING TO THE TRANSACTION OF PURCHASE AND SALE OF SHARES OF M/S JINDAL VIJAYNAGBAR STEEL LTD. THE PURCHASE TRANSACTION OF THESE SHARES TOOK PLACE DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR 200102; WHEREAS THE SALE OF THESE SHARES WERE IN THE PREVIO US YEAR RELEVANT TO THE ASSESSMENT YEAR 2002 03. 6 THE BRIEF FACTS GIVING RISE TO THE CONTROVERSY AR E AS UNDER: THE ASSESSEE CLAIMED TO HAVE PURCHASED SHARES WORTH ` 14 CRORES OF JSVL DURING THE YEAR RELEVANT TO ASSESSMENT YEAR 2001-02. THE ASSE SSING OFFICER NOTED THAT THE ASSESSEE RECEIVED AN ADVANCE OF ` 14 CRORES ON 16.10.2000 FROM ANOTHER GROUP CONCERNED M/S VIRINDAVAN SERVICES PVT. LTD. (VSPL) FOR SUPPLY OF MS SLABS. THE SAID ADVANCE RECEIVED BY THE ASSESSEE WAS INVESTED IN TH E SHARES OF JVSL ON THE PRIVATE PLACEMENT AT THE RATE OF RS. 10 PER SHARE. IT WAS F URTHER NOTED BY THE ASSESSING OFFICER THAT INITIALLY JVSL GAVE ADVANCE OF RS. 14 CRORE ON 16/10/2002 TO VSPL FOR PURCHASE OF MS SLAPS. ON THE SAME DAY, THE VSPL GAV E THE SAID MONEY OF ` . 14 CRORE TO THE ASSESSEE AS AN ADVANCE FOR PURCHASE OF MS SLABS AND ON THE SAME DAY, ITA NO. 1310 & 701 KAMSHET INVESTMENT P LTD 4 THE ASSESSEE PURCHASED THE SHARES WORTH ` . 14 CRORES OF JVSL THROUGH PRIVATE PLACEMENT. 6.1 THE ASSESSING OFFICER HAS ALSO OBSERVED THAT TH E ASSESSEE WAS NOT ENGAGED IN THE BUSINESS OF MS SLABS AND THERE WAS NO SERIOUS A TTEMPT TO SUPPLY THE GOODS CONTRACTED AND ULTIMATELY NO GOODS WERE SUPPLIED TO VSPL. ON THESE FACTUAL MATRIX, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ENTI RE TRANSACTION WAS A CIRCULAR TRANSACTION IN WHICH JVSL S OWN FUNDS OF ` . 14 CRORES WERE ROOTED THROUGH VSPL AND THE ASSESSEE TO ENABLE PROMOTERS OF JVSL TO BRING M ORE CAPITAL AS PER THE PRE- CONDITION OF ICICI LTD AS PER THEIR LETTER DATED 17 /11/99 TO GET FINANCIAL ASSISTANCE FOR THE PROJECT. THE ASSESSING OFFICER HAS ALSO NOTED T HAT THE ASSESSEE PURCHASED THESE SHARES AT 10 PER SHARE WHEREAS THE MARKET PRICE OF THE SHARES ON THE DATE OF PURCHASE WAS BETWEEN ` . 5.80 ` . 6/-. THE ASSESSING OFFICER SUMMARISED THE FACTS I N PARA 19 OF THE ASSESSMENT ORDER AS UNDER: 19. FROM THE ABOVE DISCUSSION, FOLLOWING FACTS EME RGES: ALL THE FUNDS FOR PURCHASE OF SHARES CAME FROM THE JVSL TO M/S VRINDAVAN SERVICES PVT. LTD. WHO GAVE IT TO THE ASSESSEE COMPA NY IN GUISE OF ADVANCE FOR PURCHASE OF M S SLABS. B) THE ASSESSEE PURCHASED THESE SHARES UNDER PRIVATE PLACEMENT AS PROMOTER. C) THE MARKET PRICE OF THESE SHARES WERE RS 5.80 PS - RS 6 - RS 5.90PS ON THE DATE WHEREAS SHARES WERE ALLOTTED UNDER PRIVATE PLACEM ENT AT RS 10/- PER SHARE. D) THESE SHARES WERE IMMEDIATELY SOLD NEXT YEAR AT RS 7 PER SHARES. THE ASSESSEE COMPANY WAS USED AS AN ARRANGEMENT TO ASSI ST JVSL. THE WHOLE TRANSACTION OF PURCHASE AND SALES OF SHARES OF JVSL WAS DONE TO BENEFIT JVSL AND NOT THE ASSESSEE COMPANY. CHRONOLOGY OF TRANSAC TION SHOWS THAT NONE OF THE TRANSACTION WAS PERFORMED FOR FULFILMENT OF SH OWN PURPOSE. THESE WERE ONLY THE ARRANGEMENT TO CARRYOUT THE UNDECLARED MOTI VE OF SERVING THE INTEREST OF JVSL AND THEREBY PROPPING UP OF THE BALA NCE SHEET OF JVSL AND THE RELATED BOOKS OF ACCOUNTS. 6.2 ACCORDINGLY THE ASSESSING OFFICER HELD THAT THE WHOLE TRANSACTION IS SHAM TRANSACTION ENTERED INTO FOR THE PURPOSE OF ASSISTI NG JVSL AND NOT FOR PURPOSE OF BUSINESS OF ASSESSEE COMPANY. ITA NO. 1310 & 701 KAMSHET INVESTMENT P LTD 5 7 ON APPEAL THE CIT(A) HAS CONCURRED WITH THE FINDI NGS OF THE ASSESSING OFFICER ON THE POINT THAT THE SALE PURPOSE OF WHOLE TRANSAC TION IS NOT TO CARRY ON ANY BUSINESS ACTIVITY EITHER OF SUPPLY OF MS SLAB OR TR ADING IN SHARES; BUT THE SOLE PURPOSE OF PURCHASE OF SHARE OF JSVL WAS TO HELP THE SAID C OMPANY TO COMPLY WITH THE CONDITIONS PUT FORTH BY ICICI LTD. HOWEVER, THE CIT (A) HAS OBSERVED THAT THOUGH IN THE CURRENT YEAR I.E. ASSESSMENT YEAR 2001-02, THER E IS NO TAX IMPACT BECAUSE OF THIS ISSUE; BUT FOR THE PURPOSE OF COMPUTATION OF CAPITA L GAIN/LOSS IN SUBSEQUENT YEAR, THE ASSESSING OFFICER IS FREE TO ADOPT THE COST PRICE KEEPING IN VIEW THE PREVAILING MARKET PRICE ON THE DATE OF PURCHASE. 8 FOR THE ASSESSMENT YEAR 2002 03, THE ASSESSEE S OLD THESE 1,40,00,000 SHARES OF JVSL AT ` 7.25 PER SHARE AND CLAIMED LONG TERM CAPITAL LOSS O F ` . 4,53,96,552/-. IN VIEW OF THE FINDINGS OF CIT(A) FOR THE ASSESSMENT Y EAR 2001-02, THE ASSESSING OFFICER ADOPTED THE PURCHASE PRICE OF THESE SHARES AT ` . 5.80 PER SHARE FOR THE PURPOSE OF COMPUTING LONG TERM CAPITAL GAIN. CONSEQUENTLY, THE ASSESSING OFFICER DETERMINED LONG TERM CAPITAL GAIN AT ` . 1,63,00,000/- AGAINST LONG TERM CAPITAL LOSS CLAI MED BY THE ASSESSEE. 8.1 ON APPEAL THE CIT(A) UPHELD THE ACTION OF THE A SSESSING OFFICER IN ADOPTING THE PURCHASE PRICE AT ` . 5.80 PER SHARE AND DETERMINED THE LONG TERM CAPIT AL GAIN. 9 WE HAVE HEARD THE LEARNED D.R AND CAREFULLY PERUS ED THE RELEVANT MATERIAL ON RECORD. THE LD DR HAS RELIED UPON THE ORDERS OF THE ASSESSING OFFICER AND CIT(A) AND SUBMITTED THAT THE FACTS AND CIRCUMSTANCES OF T HE CASE CLEARLY SHOW THAT THE TRANSACTION OF RECEIVING AN ADVANCE OF ` . 14 CRORE FROM A GROUP CONCERN VSPL AND THE SAID MONEY WAS ALLEGEDLY INVESTED IN THE SHARES OF JVSL ON PRIVATE PLACEMENT IS A SHAM AND CIRCULAR TRANSACTION BECAUSE ORIGINALLY THE SAID AMOUNT OF ` 14 CRORES ITA NO. 1310 & 701 KAMSHET INVESTMENT P LTD 6 WAS GIVEN BY JVSL TO VSPL AND IN TURN, VSPL GAVE TH E SAME TO ASSESSEE BEING ADVANCE FOR PURCHASE OF MS SLABS. 9.1 THE LEARNED DR HAS FORCEFULLY CONTENDED THAT TH E MONEY WAS ORIGINALLY MOVED FROM THE JVSL AND FINALLY REACHED TO JVSL AS APPLICATION MONEY THROUGH VSPL AND THE ASSESSEE. THE PURPOSE OF THE ENTIRE TR ANSACTION WAS TO ASSIST JVSL TO COMPLY WITH THE CONDITIONS OF MINIMUM CAPITAL FOR G ETTING FINANCIAL ASSISTANCE FROM ICICI LTD. THE LEARNED DR HAS FURTHER CONTENDED THA T THE REAL NATURE OF TRANSACTION IS NOT WHAT WAS SHOWN; BUT IT WAS ACCOMMODATING TRANSA CTION WHEREBY THE SHARES OF THE JVSL WAS SHOWN AS PURCHASED AT INFLATED RATE AT ` . 10 PER SHARE WHEREAS THE MARKET RATE OF THE SHARERS WAS ` 5.80 TO ` . 2.06 PER SHARE. THUS, THE LEARNED DR HAS SUBMITTED THAT IT WAS ONLY AN ARRANGEMENT BETWEEN T HE 3 COMPANIES TO HELP OUT JVSL. IT IS CLEAR THAT THE ALLEGED INVESTMENT IN THE SHARES OF JVSL WAS NOT FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE AS THE INTENTIO N OF THE ASSESSEE WAS NOT TO ENHANCE THE VALUE OF INVESTMENT OVER A PERIOD OF TI ME OR TO HAVE CONTROLLING INTEREST IN THE COMPANY WHOSE SHARES WERE PURCHASED; BUT THE ENTIRE PURPOSE WAS TO ASSIST THE GROUP COMPANY. 9.2 HE HAS FURTHER POINTED OUT THAT THIS FACT OF SH AM TRANSACTION HAS BEEN STRENGTHENED BY THE FACT THAT IN THE SUBSEQUENT YEA R THE ASSESSEE SOLD THESE SHARES AT THE RATE OF ` . 7.25 PER SHARE TO ANOTHER GROUP COMPANY NAMELY JI NDAL TRACT TEBAL POWR CO LTD AND INCURRED LOSS OF ` . 3.85 CRORES. AFTER INDEXATION THE CAPITAL LOSS WA S CLAIMED AT ` 4,53,96,552/-FOR THE ASSESSMENT YEAR 2002 03. TH E LEARNED D.R HAS SUBMITTED THAT THE ASSESSEE PAID PURCHASE PRICE OF ` . 10/- PER SHARE; WHEREAS ON THE DATE OF TRANSACTION, THE MARKET PRICE OF THE SH ARES WAS ` 5.80 TO ` 6/- PER SHARE THEREFORE, THE ASSESSING OFFICER HAS RIGHTLY TAKEN THE COST OF PURCHASE OF THE SHARES ITA NO. 1310 & 701 KAMSHET INVESTMENT P LTD 7 AT ` . 5.80 FOR THE PURPOSE OF COMPUTING THE LONG TERM C APITAL GAIN FOR THE ASSESSMENT YEAR 200 2-03. 10 AFTER CONSIDERING THE SUBMISSIONS OF THE LEARNED DR AS WELL AS RELEVANT MATERIAL ON RECORD, WE NOTE THAT THE ASSESSEE HAS N OT BROUGHT OUT ANY MATERIAL ON RECORD TO CONTROVERT THE FACTS RECORDED BY THE AUTH ORITIES BELOW THAT ON THE DATE OF PURCHASE OF SHARES OF JVSL AT THE RATE OF ` .10/- PER SHARE, THE MARKET PRICE OF THE SHARE WAS BETWEEN ` . 5.80 TO ` . 6/-PER SHARE. THE ASSESSEE HAS ALSO NOT DISPUTED THIS FACT THAT THE ASSESSEE IS NOT IN THE BUSINESS OF SU PPLY OF MS SLABS RATHER THE ASSESSEE HAS ADMITTED THIS FACT THAT THE SHARES OF JVSL WERE PURCHASED ON PRIVATE PLACEMENT BASIS IN ORDER TO SATISFY THE CONDITIONS PUT BY ICI CI LTD FOR FINANCING THE PROJECT THAT THE PROMOTERS OF THE COMPANY ALSO CONTRIBUTE TO INC REASE THE SHARE CAPITAL OF THE COMPANY AND THE ASSESSEE IS ONE OF THE PROMOTERS OF JVSL. THE ASSESSING OFFICER HAS CLEARLY BROUGHT ON RECORD AND ESTABLISHED THAT THE SAID AMOUNT OF ` 14 CRORE TRAVELLED FROM JVSL BEING ADVANCE GIVEN TO VSPL AN D FURTHER GIVEN TO THE ASSESSEE BEING ADVANCE FOR SUPPLY OF MS SLABS WHICH WAS USED BY THE ASSESSEE FOR PURCHASE OF SHARES OF JVSL. IT IS ALSO UNDISPUTED FACT THAT THE ASSESSEE MADE NO EFFORT TO SUPPLY MS SLABS AND THE MOVEMENT OF MONEY STARTED FROM JVS L AND FINALLY REACHED TO THE SAME COMPANY ROOTED THROUGH VSPL AND ASSESSEE. 10.1 FOR THE ASSESSMENT YEAR 2000 2001, THE ASSESSI NG OFFICER TREATED THE SAID TRANSACTION AS SHAM THOUGH, THE SAME WAS REVENUE NE UTRAL FOR THE SAID ASSESSMENT YEAR. HOWEVER, FOR THE ASSESSMENT YEAR 2001 02 W HEN THE ASSESSEE CLAIMED TO HAVE SOLD THESE SHARES TO ANOTHER GROUP COMPANY AT THE RATE OF ` 7.25 PER SHARE AND SHOWN AS CAPITAL LOSS, THE ASSESSING OFFICER AD OPTED THE PURCHASE PRICE OF SHARES THAT ` . 5.80 AS THE SAME WAS PREVAILING MARKET PRICE AT THE TIME OF PURCHASE ITA NO. 1310 & 701 KAMSHET INVESTMENT P LTD 8 BY THE ASSESSEE. ACCORDINGLY, THE ASSESSING OFFICER COMPUTED THE CAPITAL GAIN INSTEAD OF CAPITAL LOSS ADMITTED BY THE ASSESSEE. I T IS MANIFEST FROM THE RECORD THAT THE INVESTMENT IN QUESTION WAS MADE BY THE ASSESSEE TO HELP OUT THE GROUP COMPANY IN AVAILING THE FINANCIAL ASSISTANCE FROM I CICI LTD FOR EXPANSION OF PROJECT AND IT WAS A PRECONDITION OF ICICI LTD THAT JVSL SH OULD BRING SOME MORE CAPITAL. THEREFORE, TO SATISFY THE CONDITIONS FOR AVAILING T HE FINANCIAL ASSISTANCE, THIS TRANSACTION WAS ARRANGED BETWEEN THE GROUP COMPANIE S. 10.2 THE ONLY ASPECT, WHICH IS MATERIAL AND AFFECTI NG THE INTEREST OF THE PARTIES, IS THE PURCHASE PRICE AT WHICH THE ASSESSEE PURCHASED THE SHARES. THE INFLATED PRICE PAID BY THE ASSESSEE OVER AND ABOUT THE MARKET PRIC E OF THE SHARES IS ONLY TO ASSIST AND HELP THE GROUP CONCERN AND NOT FOR ANY WISE INV ESTMENT BASED ON A PRUDENT BUSINESS DECISION. THE ENTIRE CHAIN OF EVENTS CLEAR LY ESTABLISHED THAT THE ASSESSEE HAS PURPOSEFULLY PURCHASED THE SHARES AT A HIGHER PRICE THAN THE MARKET RATE AVAILABLE ON THE DATE OF PURCHASE AND THEREAFTER SOLD THE SHA RES BY INCURRING LOSS. THE PURPOSE AND INTENTION BEHIND THESE TRANSACTIONS IS SO APPAR ENT AND OBVIOUS THAT WHAT IS SHOWN BY THE PARTIES IS NOT THE REAL. THE FACTS AND CIRCUMSTANCES AS WELL AS THE RELEVANT MATERIAL CAN LEAD TO ONLY ONE CONCLUSION T HAT ALL THESE EXERCISE OF PURCHASE OF SHARERS WAS MEANT TO ASSIST THE GROUP C OMPANY IN ORDER TO SATISFY THE CONDITIONS FOR AVAILING THE FINANCE FROM THE ICICI LTD. 11 IN VIEW OF THE ABOVE DISCUSSION AND FACTS AND CI RCUMSTANCES OF THE CASE, WE CONCUR WITH THE VIEW OF THE LOWER AUTHORITIES. HENC E THE IMPUGNED ORDERS OF CIT(A) ARE UPHELD. ITA NO. 1310 & 701 KAMSHET INVESTMENT P LTD 9 12 IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE D ISMISSED ORDER PRONOUNCED IN THE OPEN COURT ON THE 18 TH , DAY OF JULY 2012. SD/- SD/- ( G E VEERABHADRAPPA ) PRESIDENT ( VIJAY PAL RAO ) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 18 TH , JULY 2012 RAJ* COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI