DY.COMM OF INCOME TAX CC 5(2) CENTRAL RG. -5, MUMBAI vs. PARSHVANATH COMTRADE LLP, MUMBAI

This appeal is filed by the Dy. Commissioner of Income Tax, Central Circle 5(2), Mumbai (the learned Assessing Officer) against the appellate order passed by The Commissioner of Income-tax (Appeals)-53, Mumbai [The learned CIT (A)] for A.Y. 2019-20 dated 13thMay, 2022, wherein the appeal filed by the assessee against the assessment order passed under Section 143(3) of the Income-tax Act, 1961 (The Act) dated 28th September, 2021, was allowed.

On the facts and circumstances of the case and in law, whether the Ld. CIT(A) is justified in deleting the addition made under provisions of sec. 56(2)(x) of I Tax Act 1961, ignoring the statement of Shri Anil Gupta, Partner of assessee LLP recorded during the course of survey proceedings which has immense evidentiary value and cannot be disregarded or overlooked or contradicted at later stage without any authentic evidence.

On the facts and circumstances of the case and in law, whether the Ld. CIT(A) is justified in stating that the date of purchase is 06.04.2018 on the basis of so called share purchase agreement however the same is found to be not authentic and not valid in the eyes of Apparently, filing of such unauthentic agreement appears to be afterthought with intention to evade tax.”

In the rejoinder, the learned Departmental Representative heavily relied on the decision of the Hon'ble Bombay High Court in case of Dr. Dinesh Jain Vs. ITO [2014] 45 taxmann.com 442 (Bombay) which states that where loose papers found in survey showed receipts in hands of assessee and assessee admitted same as his undisclosed income but in assessment retracted from the admission and if fails to furnish the evidence to justify his stand the above receipt can be taxed as undisclosed income of the assessee. Therefore, in the present case, the statement was made during the course of survey and certain documents were found, therefore, the above

We have carefully considered the rival contentions, perused the orders of the lower authorities, paper book filed before us and the adjudication order under the provision of Benami Properties and Prohibition Act. We find that the fact shows that the assessee has purchased 2.50 crore shares of a company based on the Memorandum of Understanding dated 27th March, 2018. Consequent to the MoU, on 6th April, 2018, the share purchase agreement was signed, wherein the price per share was agreed at ₹ 40 per share. This was the prevailing market price of the share as on 6th April, 2018. Immediately, thereafter 12th on April, 2018 the above shares were transferred to the Demat Account of the assessee. Therefore, now dispute is whether the date of

On careful perusal of the facts it is apparent that assessee has purchased 2,50,00,000 shares of responsive industries Ltd, through a registered share purchase agreement with Fairpoint trade, LLP on 6 April 2018 at a consideration of ₹ 40 per share. Such shares were also transferred in the Demat account of the assessee pursuant to the above share purchase agreement. Thus according to the assessee, the date of transaction of the share is 6th of April 2018 only. The learned AO considered that the shares of responsive industries Ltd were traded on stock exchange on 12/4/2014 at ₹ 73.35 per share. Further the intimation given to the securities and exchange board of India is by responsive industries Ltd based on that the Demat data of share registrar. As the shares were transferred in the Demat account of the assessee on 12 April 2018, that date was

Further, the decisions relied upon by the learned departmental representative with respect to the validity of the statement recorded during the course of search does not come to the rescue of the revenue, for the simple reason that the documents

No infirmities were pointed out by the learned DR in the order of the learned CIT – A. We also do not find any infirmity in the order of the learned CIT – A, as it followed the circular issued by the CBDT in deleting the above addition. In fact, the learned assessing officer should also not have made the addition because it is contrary to the circular of the CBDT. Needless to say, that the circulars of the board are binding on the assessing authorities.

Accordingly, we confirm the order of the learned CIT – A. Accordingly, appeal of the learned assessing officer is dismissed.