C/TAXAP/207/2020 ORDER IN HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 207 of 2020 PRINCIPAL COMMISSIONER OF INCOME TAX-3 Versus R J TRADELINKS PVT LTD Appearance: MRS MAUNA M BHATT(174) for Appellant(s) No. 1 for Opponent(s) No. 1 CORAM:HONOURABLE 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 Income Tax Act, 1961 (for short Act, 1961) is at instance of Revenue and is directed against order passed by Income Tax Appellate Tribunal, Ahmedabad Bench dated 15-11-2019 in ITA No.1715/Ahd/2012 A.Y. 2008-09. Revenue has proposed following substantial questions of law for consideration of this Court:- [A] Whether Appellate Tribunal was correct in law and on facts in upholding order of CIT(A) deleting addition made under section 68 of Act and alternate addition under section 41(1) of Act of Rs.6,75,00,000/- even though alleged creditor, Radharamana Holdings Pvt. Ltd. had denied Page 1 of 4 Downloaded on : Tue Sep 22 11:51:51 IST 2020 C/TAXAP/207/2020 ORDER transaction of sales of shares to assessee? [B] Whether 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 assessee and these transactions were also to circumvent SEBI Rules We take notice of fact that Tribunal has recorded finding of fact with regard to transactions of assessee with Parsoli Corporation ltd. We quote relevant portion as under:- It is also submitted that there is no cessation of liability u/s. 41(1) of act since correct position was confirmed by Parsoli Corporation ltd. assessee has furnished actual evidences in name of correct party i.e. Parsoli Corporation Ltd before CIT(A) for admitting as additional evidences under Rule 14(6A) of I.T. rule 1961 stating that said additional evidences were required to be admitted to decide issue on basis of correct fact of case. It was also submitted that assessing officer has made inquiry only in last two weeks prior to limitation period and issued show cause to company on basis of denial of Radharaman Holding Pvt. Ltd. vide their rely dated 27th December, 2010. Therefore,the assessee could not place correct facts and evidences before assessing officer in short available period of three days. In view of above facts, assessee has contended before ld. CIT(A) that it was prevented by sufficient cause for producing aforesaid facts and Page 2 of 4 Downloaded on : Tue Sep 22 11:51:51 IST 2020 C/TAXAP/207/2020 ORDER evidences before assessing officer and requested to admit same as per provision of rule 46 of IT Rule 1962. Therefore, ld. CIT(A) has admitted such evidences for sake of substantial justice to decide issue on merit. ld. CIT(A) has called remand report from assessing officer. content of remand report submitted by assessing officer are elaborated at page no. 22 to 25 in order of CIT(A). In remand report, assessing officer has submitted that in view of facts and circumstances, matter may be decided on merits as facts during assessment was contrary to appellate proceedings. Considering above facts and findings of ld. CIT(A), it is undisputed fact that assessee has purchased 5 lacs of shares of Parsoli Corporation for consideration of Rs. 6.75 crore through Parsoli Corporation Ltd. who is also registered share broker with BSE and out of these shares 4200 were sold during year under consideration and assessee has declared short term capital gain of Rs. 21,82,462 on sale of these shares. 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 books of account of assessee as one of directors of assessee company was relative of director of Parsoli Corporation Ltd. for reason of apprehension of action from SEBI. Considering fact and circumstances, we do not find any reason to interfere in finding of ld. CIT(A), therefore, appeal of revenue is dismissed. Having heard Mr. M.R.Bhatt, learned Senior Counsel appearing with Ms. Mauna Bhatt, learned Senior Standing Counsel for Revenue and having gone through findings recorded by Tribunal, we are of Page 3 of 4 Downloaded on : Tue Sep 22 11:51:51 IST 2020 C/TAXAP/207/2020 ORDER view that question proposed cannot be termed as substantial question of law. In result, this appeal fails and is hereby dismissed. (VIKRAM NATH, CJ) (J. B. PARDIWALA, J) NAIR SMITA V./Radhan Page 4 of 4 Downloaded on : Tue Sep 22 11:51:51 IST 2020 Principal Commissioner of Income-tax-3 v. R J Tradelinks Pvt. Ltd