PRINCIPAL COMMISSIONER OF INCOME TAX - I vs. M/S J.V.S. FOODS PVT. LTD.

Facts

The Principal Commissioner of Income Tax-I, Jaipur (Revenue) filed an appeal against an order dated 16.07.2018 passed by the Income Tax Appellate Tribunal (ITAT), Jaipur Bench. The ITAT had allowed the appeal filed by the respondent/assessee, M/s J.V.S. Foods Pvt. Ltd. The assessment year(s) are not explicitly stated. The dispute pertains to the deletion of an addition of Rs. 2,65,27,020/- made by the Assessing Officer (AO) and confirmed by the Commissioner of Income Tax (Appeals) (CIT(A)). This addition was on account of alleged bogus Long Term Capital Gain (LTCG) arising from the purchase of shares.

Held

The High Court held that no substantial question of law arose in the appeal. The Court noted that the issue involved in the present appeal was squarely covered by its own previous judgment dated 11.09.2017 in ITA No. 385/2011, Commissioner of Income Tax Vs. Smt. Pooja Agarwal. In that prior judgment, the issues were answered in favour of the assessee and against the department. Therefore, following the precedent, the present appeal was also decided in favour of the assessee. The Court did not provide specific reasoning on the genuineness of share transactions or payment methods, as it relied on the earlier judgment. The operative direction was to dismiss the appeal. No issues were expressly left undecided.

Key Issues

The Tribunal had to decide the following substantial questions of law: 1. Whether the ITAT was justified in deleting the addition of Rs. 2,65,27,020/- made on account of bogus Long Term Capital Gain, given that there was no evidence regarding the date of purchase of shares, thus questioning the genuineness of the transactions. 2. Whether the ITAT was justified in deleting the addition of Rs. 2,65,27,020/- when the assessee could not prove the genuineness of the payment for share purchase, as the bills indicated cash payment and no banking channels were used. The Revenue argued that the issue was covered by this court's judgment dated 11.09.2017 in ITA No. 385/2011, Commissioner of Income Tax Vs. Smt. Pooja Agarwal, which was decided in favour of the assessee. The Revenue requested that this appeal be decided in view of that precedent. The Assessee's arguments are not recorded in the judgment.