Shri Brijesh Kumar Anand, New Delhi V. Assistant Commissioner of Income Tax, Central Circle, Panaji

ITA 8/PAN/2022

AI Insights

The case involves Shri Brijesh Kumar Anand, who appealed against the order of the CIT(A)-2, Panaji, which confirmed the assessment made by the Assessing Officer for the assessment year 2011-12. The assessment was based on a search and seizure operation under section 132 of the Income Tax Act, 1961, conducted on 24.10.2017. It was found that the assessee had purchased shares of M/s. Advantage Software Pvt. Ltd. at a face value significantly lower than their fair market value, as determined by their Net Asset Value (NAV). The CIT(A) and the Assessing Officer concluded that these transactions were intended to convert unaccounted cash into legitimate income, thus attracting tax under section 56(2)(vii) of the Act.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 136818 (ITAT-PANAJI)
• Duration Of Justice: 1 year(s) 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2023
• Appeal Filed By: Assessee
• Order Result: DismissedDismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 09-03-2022
• Other Referred Cases: CIT vs. Durga Prasad More, Sumati Dayal vs. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Search and seizure; Fair market value
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH : PANAJI (THROUGH VIRTUAL HEARING) BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA.No.08/PAN./2022 Assessment Year 2011-2012 Shri Brijesh Kumar Anand, T-5, Second Floor, Green Park Main, Delhi-110016 PAN AGLPA4141K vs. The ACIT, Central Circle, Pundalik Niwas, Rue documentary evidence Ourem, Panaji, Goa. PIN – 403 001 (Appellant) (Respondent) For Assessee : -None- For Revenue : Shri Badrinath Yamaji Chavan Date of Hearing : 18.08.2023 Date of Pronouncement : 22.08.2023 ORDER PER INTURI RAMA RAO, A.M. : This assessee’s appeal for assessment year 2011-12, arises against the CIT(A)-2, Panaji, Panaji’s Order Appeal No. CIT(A)-2/PNJ/10176/2018-19, dated 24.01.2022, involving proceedings u/s. 143(3) r.w.s. 147 of the Income Tax Act, 1961 (in short “the Act”). 2. Briefly the facts of the case are as under : The assessee-appellant is an individual, filed his return of income for the assessment year 2011-12 on 21.01.2012 declaring total income of Rs.65,390/-. Subsequently, a search and seizure action u/s.132 of the Act 2 I.T.A.No.08/PAN./2022 was carried-out in the case of assessee-appellant on 24.10.2017. During the course of investigation, it was found that the assessee-appellant had purchased shares of M/s. Advantage Software Pvt. Ltd., along with his family members for cash consideration at face value of Rs.10/- per share on 18.10.2010. The Assessing Officer was of the opinion that the Net Asset Value [NAV] of the each share of the said company stood at Rs.634.52 as on 31.03.2010 and Rs.634/- as on 31.03.2011. The working of the NAV was furnished by the Assessing Officer vide page no.7 of the assessment order. Therefore, based on this information, the Assessing Officer concluded that the shares of the company were purchased for a consideration which is less than the fair market value of the shares. Since the difference is more than Rs.50,000/-, the transaction is hit by the provisions of sec.56(2)(vii) of the Act. Accordingly, the Assessing Officer brought to tax a sum of Rs.1,56,25,000/-. 2.1. Being aggrieved by the above assessment order, the assessee-appellant filed an appeal before the CIT(A) who vide impugned order dated 24.01.2022 held that it was a perfect example of a façade created to convert unaccounted money by way of shell companies and putting them into a series of transactions to give a legitimate colour of converting of unaccounted cash available with the individuals. The Ld. 3 I.T.A.No.08/PAN./2022 CIT(A) confirmed the order of the Assessing Officer placing reliance on the decisions of Hon’ble Supreme Court in the case of CIT vs. Durga Prasad More 82 ITR 540 (SC) and Sumati Dayal vs. CIT 214 ITR 801 (SC) by applying the test of human probability. 3. Being aggrieved by the order of the Ld. CIT(A), the assessee-appellant is in appeal before the Tribunal. When the appeal was called on, none appeared for the assessee despite service of notice of hearing. We, therefore, proceed to decide the appeal on merits, after hearing the Learned DR. 4. We have gone through the orders of the lower authorities and the material available on record. We find that the Ld. CIT(A) has discussed the factual matrix of the case in great detail vide para 7.1 of his order. For the sake of brevity, the facts are not repeated/discussed herein. From the perusal of the CIT(A)'s order, it is clear that the appellant had nowhere contested the applicability of the provisions of sec.56(2)(vii)(b) of the Act to the transactions. The only challenge was with regard to the year of purchases of the shares. This was rightly dislodged by the Ld. CIT(A) as well as the Assessing Officer by bringing the cogent material on record to show that the assessee-appellant had purchased the shares during the year under consideration. The assessee also had failed to controvert the findings of the lower authorities that it is a device adopted 4 I.T.A.No.08/PAN./2022 to bring into books the unaccounted money of the assessee- appellant. Thus, we do not see any reason to interfere with the orders of the lower authorities. Accordingly, the order of the Ld. CIT(A) is confirmed on this issue. Ordered accordingly. 5. In the result, appeal of the assessee is dismissed. Order pronounced in the open Court on 22.08.2023. Sd/- Sd/- [PARTHA SARATHI CHAUDHURY] [INTURI RAMA RAO] JUDICIAL MEMBER ACCOUNTANT MEMBER Pune, Dated 22 nd August, 2023 VBP/- Copy to 1. The applicant 2. The respondent 3. The CIT(A)-2, Panaji, Goa 4. The Pr. CIT (Central), Bangalore. 5. D.R. ITAT, Panaji Bench, Panaji 6. Guard File. //By Order// Assistant Registrar, ITAT, Pune Benches, Pune.