THE PRINCIPAL COMMISSIONER OF INCOME TAX-3 vs. R J TRADELINKS PVT LTD

C/TAXAP/207/2020 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 207 of 2020 ========================================================== THE PRINCIPAL COMMISSIONER OF INCOME TAX-3 Versus R J TRADELINKS PVT LTD ========================================================== Appearance: MRS MAUNA M BHATT(174) for the Appellant(s) No. 1 for the Opponent(s) No. 1 ========================================================== CORAM: HONOURABLE THE CHIEF JUSTICE MR. VIKRAM NATH and HONOURABLE MR. JUSTICE J.B.PARDIWALA

Date : 17/09/2020

ORAL ORDER (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA)

This appeal under Section 260-A of the Income Tax Act, 1961 (for short “the Act, 1961) is at the instance of the Revenue and is directed against the order passed by the Income Tax Appellate Tribunal, Ahmedabad Bench dated 15-11-2019 in the ITA No.1715/Ahd/2012 A.Y. 2008-09. The Revenue has proposed the following substantial questions of law for the consideration of this Court:- “[A] Whether the Appellate Tribunal was correct in law and on facts in upholding the order of CIT(A) deleting the addition made under section 68 of the Act and alternate addition under section 41(1) of the Act of Rs.6,75,00,000/- even though the alleged creditor, Radharamana Holdings Pvt. Ltd. had denied Page 1 of 4

C/TAXAP/207/2020 ORDER transaction of sales of shares to the assessee?” [B] Whether the Appellate Tribunal was correct in law and on facts in holding that 5 lakh shares of Parsoli Corporation Ltd. were purchased through Parsoli Corporation Ltd, even though these transactions were not declared in audited books of accounts of the assessee and these transactions were also to circumvent SEBI Rules” We take notice of the fact that the Tribunal has recorded a finding of fact with regard to the transactions of the assessee with the Parsoli Corporation ltd. We quote the relevant portion as under:- “It is also submitted that there is no cessation of liability u/s. 41(1) of the act since the correct position was confirmed by the Parsoli Corporation ltd. The assessee has furnished actual evidences in the name of correct party i.e. Parsoli Corporation Ltd before CIT(A) for admitting as additional evidences under Rule 14(6A) of the I.T. rule 1961 stating that the said additional evidences were required to be admitted to decide the issue on the basis of correct fact of the case. It was also submitted that the assessing officer has made inquiry only in the last two weeks prior to the limitation period and issued a show cause to the company on the basis of denial of Radharaman Holding Pvt. Ltd. vide their rely dated 27th December, 2010. Therefore,the assessee could not place the correct facts and evidences before the assessing officer in the short available period of three days. In view of the above facts, the assessee has contended before the ld. CIT(A) that it was prevented by sufficient cause for producing the aforesaid facts and Page 2 of 4

C/TAXAP/207/2020 ORDER evidences before the assessing officer and requested to admit the same as per provision of rule 46 of the IT Rule 1962. Therefore, the ld. CIT(A) has admitted such evidences for the sake of substantial justice to decide the issue on merit. The ld. CIT(A) has called remand report from the assessing officer. The content of the remand report submitted by the assessing officer are elaborated at page no. 22 to 25 in the order of CIT(A). In the remand report, the assessing officer has submitted that in view of the facts and circumstances, the matter may be decided on merits as the facts during the assessment was contrary to the appellate proceedings. Considering the above facts and findings of ld. CIT(A), it is undisputed fact that assessee has purchased 5 lacs of shares of Parsoli Corporation for a consideration of Rs. 6.75 crore through Parsoli Corporation Ltd. who is also a registered share broker with the BSE and out of these shares 4200 were sold during the year under consideration and the assessee has declared short term capital gain of Rs. 21,82,462 on the sale of these shares. The ld. CIT(A) has categorically established in his findings that these shares issued were not purchased from Radharaman Holding Pvt. Ltd. but 5 lacs shares of Parsoli Corporation Ltd. was purchased through Parsoli Corporation Ltd. and these transactions were not correctly declared in the books of account of the assessee as one of the directors of the assessee company was a relative of the director of Parsoli Corporation Ltd. for the reason of apprehension of action from SEBI. Considering the fact and circumstances, we do not find any reason to interfere in the finding of ld. CIT(A), therefore, the appeal of revenue is dismissed.”

Having heard Mr. M.R.Bhatt, the learned Senior Counsel appearing with Ms. Mauna Bhatt, the learned Senior Standing Counsel for the Revenue and having gone through the findings recorded by the Tribunal, we are of the Page 3 of 4

C/TAXAP/207/2020 ORDER view that the question proposed cannot be termed as a substantial question of law. In the result, this appeal fails and is hereby dismissed. (VIKRAM NATH, CJ) (J. B. PARDIWALA, J) NAIR SMITA V./Radhan Page 4 of 4