The ACIT, Circle -5,, Ahmedabad v. R.J. Tradelinks Pvt.Ltd.,, Ahmedabad

ITA 1715/AHD/2012 | 2008-2009
Pronouncement Date: 15-11-2019 | Result: Dismissed

Appeal Details

RSA Number 171520514 RSA 2012
Assessee PAN AADCR7885G
Bench Ahmedabad
Appeal Number ITA 1715/AHD/2012
Duration Of Justice 7 year(s) 3 month(s) 12 day(s)
Appellant The ACIT, Circle -5,, Ahmedabad
Respondent R.J. Tradelinks Pvt.Ltd.,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 15-11-2019
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 15-11-2019
Date Of Final Hearing 23-09-2019
Next Hearing Date 23-09-2019
Last Hearing Date 19-06-2017
First Hearing Date 19-08-2019
Assessment Year 2008-2009
Appeal Filed On 03-08-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: SHR I RAJPAL YADAV JUDICIAL MEMBER AND SHRI AMARJIT SINGH ACCOUNTANT MEMBER THE ACIT CIRCLE - 5 AHMEDABAD (APPELLANT) VS R.J. TRADELINKS PVT. LTD. B1 - 6 - 7 MODERN FLATS B/H - NID PALDI AHMEDABAD - 380007 PAN: AADCR7885G (RESPONDENT) REVENUE BY : S H RI JAGDISH CIT - D . R. ASSESSEE BY: SHRI ASEEM L. THAKKAR A.R. DATE OF HEARING : 23 - 09 - 2 019 DATE OF PRONOUNCEMENT : 15 - 11 - 2 019 / ORDER P ER : AMARJIT SINGH ACCOUNTANT MEMBER : - THIS REV ENUE S APPEAL FOR A.Y. 2008 - 09 ARI SES FROM ORDER OF THE CIT(A) - XI AHMEDABAD DATED 04 - 05 - 2 012 IN PROCEEDINGS UNDER SECTION 1 4 3(3) OF THE INCOME TAX ACT 1961; IN SHORT THE ACT . 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - I) THE COMM ISSIONER OF INCOME TAX (A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.6 75 00 000/ - MADE U/S 68 OF THE ACT ON ACCOUNT OF UNEXPLAINED CREDITORS EVEN WHEN THE EXPLANATION OF THE ASSESSEE THAT THE SAID I T A NO . 1715 / A HD/20 12 A SS ESSMENT YEAR 2008 - 09 I.T.A NO. 1715 /AHD/20 12 A.Y. 2008 - 09 PAGE NO ACIT VS. R J TRAKELINKS PVT. LTD. 2 CREDIT PERTAINED TO M/S RADHARAMANA HOL DINGS PVT LTD IN LIEU OF PURCHASE OF SHARES FROM THEM WAS FOUND TO BE INCORRECT. II) WITHOUT PREJUDICE TO THE GROUND (I) THE COMMISSIONER OF INCOME TAX (A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.6 75 00 000/ - MADE IN RESPECT OF THE CEASED LIABILITY U/S 41(1) OF THE ACT EVEN WHEN THE CREDITOR M/S RADHARAMANA HOLDINGS PVT LTD WHOSE NAME WAS APPEARING IN THE BALANCE SHEET OF THE ASSESSEE HAD DENIED HAVING MADE ANY TRANSACTION WITH THE ASSESSEE IMPLYING THAT THE LIABILITY OF M/S RADHARAMAN HOLDINGS PVT LTD NO LONGER EXISTED. II I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. COMMISSIONER OF INCOME TAX (A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. IV) IT IS THEREFORE PRAYED THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (A) MAY BE SET - ASIDED ARID THAT OF THE ASSESSING OFFICER BE RESTORED. 3. THE TWO GROUNDS OF APPEAL OF THE REVENUE ARE INTER - CONNECTED TO THE ISSUE OF DELETING THE ADDITION OF RS. 6 75 0000/ - MADE U/S. 68 OF THE ACT ON ACCOU NT OF UNEXPLAINED CREDITORS AND DELETING THE SAME ADDITION MADE IN RESPECT OF THE CEASED LIABILITY U/S. 41(1) OF THE THEREFORE FOR THE SAKE OF CONVENIENCE BOTH THESE GROUNDS OF APPEAL ARE ADJUDICATED TOGETHER. 4. T HE FACT IN BRIEF IS THAT THE ASSES SEE HAS FILED RETURN OF INCOME DECLARING TOTAL INCOME AT RS. 23 01 498/ - ON 6 TH APRIL 2009. THE CASE OF THE ASSESSEE WAS SUBJECT TO SCRUTINY ASSESSMENT AND NOTICE U/S. 143(2) OF THE ACT ISSUED ON 24 TH SEP 2010. AT THE TIME OF ASSESSMENT THE ASSESSIN G OFFICER NOTICED THAT ASSESEE HAS SHOWN AN AMOUNT OF RS. 6 52 96 614/ - UNDER THE HEAD CURRENT LIABILITIES WHICH ALSO INCLUDED SUNDRY CREDITORS OF RS. 6 49 51 200/ - . THE ASSESSEE WAS ASKED TO FURNISH THE CONFIRMATION OF THE SUNDRY CREDITORS. THE ASSESSEE HAS FURNISHED COPY OF ITS ACCOUNT IN THE BOOKS OF RADHARAMAN HOLDING PVT. LTD. CHANDIGARH SHOWING OUTSTANDING BALANCE OF RS. 6 49 51 200/ - AS ON 31 ST MARCH 2008. THE ASSESSING OFFICER HAS ALSO REPRODUCED COPY OF ACCOUNT OF THE ASSESSEE IN THE BOOKS OF THE AFORESAID PARTIES AS UNDER: - I.T.A NO. 1715 /AHD/20 12 A.Y. 2008 - 09 PAGE NO ACIT VS. R J TRAKELINKS PVT. LTD. 3 DATE PARTICULARS CH.NO. DR.AMOUNT CR. AMOUNT BALANCE. BILL NO.BSE - 0708151 4 16 28 330 4 16 28 330 01/1 1/2007 BILL NO.BSE - 0708152 2 58 71 669 6 75 00 000 02/11/2007 BEING AMT. RECEIVED 64794 10 00 000 6 65 00 000 11/02/2008 BEING AMT. RECEIVED 64795 5 00 000 6 60 00 000 14/02/2008 BEING AMT. RECEIVED 64797 3 00 000 6 57 00 000 15/02/2008 BEING AMT. RECEIVED 648002 7 48 800 6 49 51 200 31/03/2008 BALANCE C/D 000405 6 49 51 200 CARRIED OVER 6 75 00 000 6 75 00 000 THE ASSESSEE HAS ALSO FURNISHED UNDATED CONFIRMATION LETTER OF THE ABOVE PARTY CONFIRMING THE OUTSTANDING BALANCE OF RS. 6 4 9 51 2 00 / - RECEIVABLE FROM THE ASSESSEE. THE ASSESSEE HAS FURNISHED COPIES OF PURCHASE BILL FOR PURCHASE OF 5 LAC SHARES OF PARSOLI CORPORATION LTD. FROM THE RADHARAMAN HOLDING PVT. LTD. FOR A SUM OF R S. 6. 75 CRORE. IN THE PURCHASE BIL L THE PAN OF THE ABOVE PARTY W AS SH OWN AS AILBG7832K AND ON VERIFICATION TH E ASSESSING OFFICER FOUND THAT PAN MENTIONED ON THE BILL WAS BOGUS. THE RE FORE THE ASSESSING OFFICER HAS ISSUED NOTICE U/S. 133(6) OF THE ACT TO M/S. RADHARAMAN HOLDING PVT. LTD. CHANDIGARH . I N ITS REPLY THE AFORESAID PARTY HAS DECLINED OF HAVING ANY T RANSACTION MADE WITH THE ASSESSEE DURING THE PREVIOUS YEAR RELEVANT TO THE YEAR UNDER CONSIDERATION . THE RE FORE THE ASSESSING OFFICER VIDE LETTER DATED 27 TH DECEMBER 2010 ASKED THE ASSESSEE TO EXPLAIN WHY NOT SUM OF RS. 6.75 CRO RE MAY NOT B E ADDED TO ITS INCOME . THE I.T.A NO. 1715 /AHD/20 12 A.Y. 2008 - 09 PAGE NO ACIT VS. R J TRAKELINKS PVT. LTD. 4 ASSESSEE HAS EXPLAINED THAT IT HAS PURCHASED FIVE LAC SHARES OF PARSOLI CORPORATION LTD. F R O M RADHARAM A N HOLDING P VT. LTD. WHICH WERE DULY CREDITED IN THE DEMAT ACC OUNT OF THE ASSESSEE COMPANY OUT OF WHICH IT HAD ALREADY SOLD 4200 SHARES AS R EFLEC TED IN THE DEM AT ACCOUNT. IT WA S FURTHER E X P L AINED THAT THE SALE CONSIDERATION RECEIVED ON SALE OF AFORESAID SHARES WAS ALSO REFLECTED IN THE BANK STATEMENT AND SHORT TERM CAPITAL GAIN ARISING OUT OF THE SALE OF SUCH SHARES AMOUNTING TO RS. 2182462/ - WAS DULY OFFERED FOR TAXATION IN THE INCOME TAX RETURN. IT IS FURTHER SUBMITTED THAT ASSESSEE HAS ALSO MADE PAYMENT TO RADHARMAN HOLDING PVT. LTD. FOR PURCHASE OF THE SHARES WHICH WAS ALSO REFLECTED IN THE BANK STATEMENT OF THE ASSESSEE COMPANY AND THE B ALANCE OUTSTANDING AMOUNT OF RS. 6 49 51 200/ - WAS STILL PAYABLE TO THE SAID PARTY. IN ORDER TO VERIFY THE ASSESSEE S CLAIM OF HAVING MADE PART PAYMENT TO RADHARAMAN HOLING PVT. LTD. THE ASSESSING OFFICER HAS ISSUED NOTICE U/S. 13 3(6) TO THE ASSESSEE S BANK AND AS PER THE INFORMATION RECEIVED FROM THE AXIS BANK T HE ASSESSING OFFICER HAD NOTICED THAT NONE OF T HE CHQUES WERE PAYABLE TO M/S. RADHA RAMAN HOLDING PVT. LTD. AND CHEQUE NO. 64697 WAS ISSUED IN THE NAME OF THE ASSESSEE ITSELF AND OTHER CHEQUES N O S . 64794 AND 64795 WERE ISSUED IN FAVOUR OF PARSOLI CORPORATION LTD. IN VIEW OF THE ABOVE THE ASSESSING OFFICER OBSERVED THAT ASSESSEE HAS NOT MADE ANY PARTIAL PAYMENT TO RADHA RAMAN HOLDING PVT. LTD. THE ASSESSING OFFICER HAS ALSO OBSERVED THAT RADHA RAMAN HOLDING PVT. LTD. TO WHOM THE ASSESSEE HAS SHOWN OUTSTANDING BALANCE OF RS. 6 49 51 200/ - PAYABLE WILL HAVE AN EFFECT OF CESSATION OF LIABILITY TOWARDS ASSESSEE AS THE SAID PARTY HAS DENIED OF RECEIVING ANY SUCH AMOUNT FROM THE ASSESSEE. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES THE ASSESSING OFFICER HAS TREATED THE AMOUNT OF R S. 6.75 CRORE CREDITED IN THE BOOKS OF THE ASSESSEE AS INCOME I.T.A NO. 1715 /AHD/20 12 A.Y. 2008 - 09 PAGE NO ACIT VS. R J TRAKELINKS PVT. LTD. 5 OF THE ASSESSEE U/S. 68 OF THE ACT. THE ASSESSING OFFICER HAS ALSO TREATED THE SAME AS CESSATION OF LIABILIT Y BY INVOK ING THE PROVISION OF SECTION 41(1) OF THE ACT AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 5. AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A). T HE LD. CIT(A) HAS ALLOWED THE APPEAL OF THE ASSESSEE. THE RELEVANT PART OF THE DECISION OF LD. CIT(A) IS REPRODUCED AS UNDER: - 4.5 I HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS. I HAVE ALSO PERUSED THE EVIDENCES FURNISHED BY THE APPELLANT DURING THE APPELLATE PROCEEDINGS AND CASE LAWS RELIED UPON BY THE APPELLANT. THE CONT ENTS OF THE REMAND REPORT SUBMITTED BY THE A.O. IS ALSO TAKEN INTO ACCOUNT FOR ADJUDICATING THIS GROUNDS OF APPEAL. IT IS SEEN THAT THE APPELLANT HAS PURCHASED 5 LAC SHARES OF PARSOLI CORPORATION LTD. FOR A CONSIDERATION OF RS. 6 75 00 000/ - DURING THE YE AR UNDER CONSIDERATION. AS PER BOOKS OF ACCOUNTS OF THE APPELLANT THESE SHARES WER E PURCHASED FROM M/S. RADHARAMAN HOLDINGS PVT. LTD. OUT OF T HESE SHARES 4200 SHARES WERE SOLD DURING THE YEAR UNDER CONSIDERATION AND THE APPELLANT HAS DECLARED SHORT TERM CA PITAL GAIN OF RS. 21 82 462/ - ON THE SALE OF THESE SHARES. SINCE THESE SHARES WERE CREDITED IN THE DEMAT ACCOUNT OF THE APPELLANT AND PART OF THESE SHARES WERE SOLD THROUGH DEMAT ACCOUNT ACCORDINGLY THE PURCHASE OF THESE SHARES CANNOT BE DENIED. TO THIS F ACT THE A.O. HAS ALSO AGREED. HOWEVER DURING THE ASSESSMENT PROCEEDINGS THE A.O. HAD REACHED TO A CONCLUSION THAT THESE SHARES WERE NOT PURCHASED FROM RADHARAMANA HOLDINGS PVT. LTD. AND THE CREDIT SHOWN IN THE NAME OF RADHARAMANA HOLDINGS PVT. LTD. OF RS . 6 49 51 200/ - WAS ALSO FOUND TO BE NON - EXISTENT AS M/S. RADHARAMANA HOLDINGS PVT. LTD. HAD DENIED THESE TRANSACTIONS. IN VIEW OF THESE FINDINGS THE A.O. HAD MADE DISALLOWANCE OF RS. 6 75 00 000/ - WHICH CORRESPONDS TO THE PURCHASE COST OF 5 LAC SHARES OF PARSOLI CORPORATION LTD. HOWEVER DURING THE APPELLATE PROCEEDINGS THE APPELLANT CONTENDED THAT THESE TRANSACTIONS WERE NOT DONE THROUGH RADHARAMANA HOLDINGS PVT. LTD. BUT 5 LAC SHARES OF M/S. PARSOLI CORPORATION LTD. WAS PURCHASED THROUGH PARSOLI CORPORAT ION LTD. WHO IS ALSO A REGISTERED SHARE BROKER WITH BSE. IT WAS ALSO CONTENDED THAT THIS TRANSACTION WAS NOT TRUTHFULLY DECLARED IN THE BOOKS OF ACCOUNTS AS ONE OF THE DIRECTORS OF THE APPELLANT COMPANY IS A RELATIVE OF DIRECTOR OF PARSOLI CORPORATION LTD . AND BY RECORDING THIS TRANSACTION TRUTHFULLY THE PARTIES WERE APPREHENSIVE OF ACTION FROM SEBL. FOR THIS REASON THE NAM E OF M/S. RADHARAMANA HOLDINGS PVT. LTD. WAS INSERTED IN THE BOOKS OF ACCOUNTS. 4.6 DURING THE APPELLATE PROCEEDINGS THE APPELLANT HAS FURNISHED COPY OF BILLS WHICH EVIDENCES PURCHASE OF SHARES OF M/S. PARSOLI CORPORATION LTD. FROM M/S. PARSOLI CORPORATION LTD. ITSELF. THE APPELLANT HAS ALSO FILED CONFIRMATION TORN PARSOLI CORPORATION LTD. WHO HAS CONFIRMED THAT THE APPELLANT WAS A SUNDRY DEBTOR OF RS. 6 49 51 200/ - AS ON 31/3/2008. THESE EVIDENCES WERE FORWARDED TO THE OFFICE OF THE A.O. AND HE HAD MADE NECESSARY INVESTIGATIONS TO ASCERTAIN THESE FACTS. THE A.O. HAD FOUND PURCHASE OF 5 LAC SHARES OF M/S. PARSOLI CORPORATION LTD. FRO M M/S. PARSOLI CORPORATION LTD. ITSELF GENUINE. THE A.O. HAD REACHED TO THIS CONCLUSION AFTER TAKING THE FOLLOWING FACTS IN VIEW: - (A) IN RESPONSE TO INQUIRY LETTERS ISSUED BY THE A.O. U/S.133(6) OF I.T. ACT M/S. PARSOLI CORPORATION LTD. VIDE THEIR LE TTER DATED 7/4/2012 HAD CONFIRMED THESE TRANSACTIONS M/S. PARSOLI CORPORATION HAD SHOWN M/S. R.J.TRADELINKS PVT. LTD. AS A SUNDRY DEBTOR OF RS.6 49 51 200/ - AS ON 31/3/2008. (B) TO SUBSTANTIATE THESE TRANSACTIONS M/S. PARSOLI CORPORATION LTD. HAD ALSO SENT THE STATEMENT OF ACCOUNT EXTRACTS FROM BOOKS OF ACCOUNTS BILLS OF THE IMPUGNED SHARE TRANSACTIONS AND PROOF OF PAYMENT SUPPORTED BY BANK STATEMENT. I.T.A NO. 1715 /AHD/20 12 A.Y. 2008 - 09 PAGE NO ACIT VS. R J TRAKELINKS PVT. LTD. 6 (C) THE A.O. HAD ALSO SURFED MINISTRY OF CORPORATE AFFAIRS WEBSITE AND DOWNLOADED THE SHARE HOLDI NG REGISTER/SHARE HOLDING PATTERN OF M/S. PARSOLI CORPORATION LTD. IN THE SHARE HOLDING REGISTER OF PARSOLI CORPORATION LTD. M/S \ PARSOLI CORPORATION LTD. HAS SHOWN THE APPELLANT I.E. R.J. TRADELINK PVT. LTD. AS SHARE HOLDER HOLDING 5 45 400 SHARES. (D) THESE SHARES WERE TRANSFERRED THROUGH DEMAT ACCOUNT AND ACCORDINGLY THE PHYSICAL PRESENCE OF THESE SHARES CANNOT BE DENIED. THE ABOVE FACTS MAKE IT ABUNDANTLY CLEAR THAT THE APPELLANT HAD PURCHASED 5 LAC SHARES OF PARSOLI CORPORATION LTD. FROM M/S. PARSO LI CORPORATION LTD. ITSELF FOR A CONSIDERATION OF RS. 6 75 00 000/ - . ONCE THE PURCHASE OF SHARES FOR A CONSIDERATION OF RS. 6 75 00 000/ - IS ESTABLISHED IT WILL ONLY TO BE APPROPRIATE AND LOGICAL TO ALLOW CREDIT OF PURCHASE OF THESE SHARES TO THE APPELLAN T. ACCORDINGLY I HOLD THAT THE APPELLANT HAD PURCHASED 5 LAC SHARES OF PARSOLI CORPORATION LTD. FOR A CONSIDERATION OF RS. 6 75 00 000/ - AND THE APPELLANT IS ENTITLED TO CLAIM PURCHASE EXPENSES AGAINST THESE PURCHASES. ACCORDINGLY ADDITION MADE BY THE A. O. OF RS. 6 75 00 0007 - IS DELETED. 4.7 THE A.O. HAD ALSO TAKEN ALTERNATE PLEA THAT THE LIABILITY SHOWN BY THE APPELLANT IN THE NAME OF M/S. RADHARAMANA HOLDINGS PVT. LTD. DOES NOT EXIST AND ACCORDINGLY ADDITION OF RS. 6 75 00 000/ - BE MADE AS PER THE PROV ISIONS OF SEC.41(1) OF THE I.T.ACT. SINCE THE ADDITION HAS BEEN PROPOSED AS PER THE PROVISIONS OF SEC.41(1) IT WILL BE APPROPRIATE TO DISCUSS THE PROVISIONS OF THIS SECTION. THE PROVISIONS OF SEC.41 (1) CAN BE INVOKED IF THE FOLLOWING CONDITIONS ARE FULF ILLED : - (I) IN THE ASSESSMENT OF AN ASSESSEE AN ALLOWANCE OR DEDUCTION HAS BEEN MADE IN RESPECT OF ANY LOSS EXPENDITURE OR TRADING LIABILITY INCURRED BY HIM. (II) (A) ANY AMOUNT IS OBTAINED IN RESPECT OF SUCH LOSS OR EXPENDITURE OR (B) ANY BEN EFIT IS OBTAINED IN RESPECT OF SUCH TRADING LIABILITY BY WAY OF REMISSION OR CESSATION THEREOF. (III) SUCH AMOUNT OR BENEFIT IS OBTAINED BY THE ASSESSEE; AND (IV) SUCH AMOUNT OR BENEFIT IS OBTAINED IN A SUBSEQUENT YEAR. TO INVOKE PROVISIONS OF SEC.41 (1) THE A.O. HAS TO PROVE THAT ANY AMOUNT IS OBTAINED BY THE APPELLANT IN RESPECT OF SUCH LOSS OR EXPENDITURE OR ANY BENEFIT IS OBTAINED IN RESPECT OF TRADING LIABILITY BY WAY OF REMISSION OR CESSATION. THERE IS NOTHING ON RECORD TO INDICATE THAT THE APPEL LANT HAD OBTAINED ANY BENEFIT IN RESPECT OF SUCH TRADING LIABILITY BY WAY OF REMISSION OR CESSATION. IN FACT IT IS PROVED BY COGENT EVIDENCES THAT LIABILITY OF RS. 6 49 51 200/ - EXISTS AS ON 31/3/2008 AND THIS LIABILITY EXISTS IN THE NAME OF M/S. PARSOLI C ORPORATION LTD. IN VIEW OF THESE FACTS I AM OF THE CONSIDERED VIEW THAT PROVISIONS OF SECTION 41(1) CANNOT BE INVOKED IN THIS CASE AND ACCORDINGLY I DO NOT AGREE WITH THE ALTERNATE PLEA OF THE A.O. 4.8 IN VIEW OF ABOVE DISCUSSION I AM OF THE CONSIDERED VIEW THAT ADDITION OF RS. 6 75 00 000/ - IS NOT TENABLE AND ACCORDINGLY SAME IS HEREBY DELETED. THIS GROUND OF APPEAL IS ALLOWED. 6. WE HAVE HEARD THE RIVAL CONTENTION AND PERUSED THE MATERIAL ON RECORD. DURING THE COURSE OF ASSESSMENT THE ASSESS ING OFFICER HAS NOTICED THAT ASSESSEE HAS SHOWN OUTSTANDING LIA BILITY OF SUNDRY CREDITORS OF RS . 6 49 51 200/ - . ON VERIFICATION THE ASSESSING OFFICER HAS NOTICED THAT ASSESSEE HAS SHOWN THE AFORESAID AMOUNT OF SUNDRY CREDITORS PAYABLE TO MR. RADHARAMAN H OLDING PVT. LTD. CHANDIGARH FROM WHICH IT HAS PURCHASED 5 LAC SHARES OF PARSOLI CORPORATION LTD. FOR A SUM OF RS. 6.75 CRORE. THE ASSESSING OFFICER HAS ISSUED NOTICED U/S. 133(6) TO THE AFORESAID PARTY AND THE I.T.A NO. 1715 /AHD/20 12 A.Y. 2008 - 09 PAGE NO ACIT VS. R J TRAKELINKS PVT. LTD. 7 SAID PARTY HAS DENIED OF HAVING ANY SUCH TRA NSACTION AND OUTSTANDING BALANCE RECEIVABLE FROM THE ASSESSEE. THE ASSESSING OFFICER HAS ALSO MADE VERIFICATION FROM THE BANK OF THE ASSESSEE REGARDING THE PART PAYMENT MADE BY THE ASSESSEE AND NOTICED THAT ASSESSEE HAS ISSUED TWO CHEQUES IN FAVOUR PARSOL I CORPORATION LTD. AND ONE CHEQUE WAS ISSUED IN THE NAME OF THE ASSESSEE ITSELF. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES THE ASSESSING OF FICER HAS TREATED AN AMOUNT OF R S. 6.75 CRORE FOUND CREDITED IN THE BOOKS OF THE ASSESSEE AS INCOME OF THE ASSES SEE U/S. 68 OF THE ACT AS THE EXPLANATION OFFERED BY THE ASSESSEE WAS NOT FOUND TO BE CORRECT AND SIMULTANEOUS TREATED THE SAME AS CESSATION OF LIABILITY U/S. 41(1) OF THE ACT AS M/S RADHAMAN HOLDING HAS DENIED ANY LIABILITY PAYABLE BY THE ASSESSEE. ON A PPEAL BEFORE LD. CIT(A) THE ASSESSEE HAS SUBMITTED ADDITIONAL EVIDENCE UNDER RULE 46A OF THE I.T. RULE THAT THE ASSESSEEE COMPANY DURING THE YEAR UNDER CONSIDERATION HAS IN FACT PURCHASED 5 LACS SHARES OF PARSOLI CORPORATION LTD. THROUGH PARSOLI CORPORATI ON LTD. ITSELF AND NOT THROUGH THE BROKER RADHARAMN HOLDING PVT. LTD. IN THIS REGARD THE ASSESSEE HAS ALSO SUBMITTED THAT THE PARTICULAR S OF SHARE PURCHASED THROUGH PARSOLI CORPORA TION LTD. I S AS UNDER: - DATE NO. OF SHARES BILL NO. AMOUNT (RS.) 27/11/2007 190000 BW/169/11038 2 70 21 857.00 27/11/2007 310000 BW/169/11038 4 04 78 143.00 --------------------- 6 75 00 000.00 --------------------- THE ASSESSEE HAS ALSO FURNISHED THE ACTUAL BILL ISSUED BY THE B ROKER VIZ. PARSOLI CORPORATION LTD . ALONG WITH OTHER EVIDENCES F OR PURCHASE OF PARSOLI CORPORATION LTD. WHICH WAS OF F MARKET TRANSACTION. IT IS ALSO SUBMITTED THAT ONE OF THE DIRECTORS OF THE ASSESSEE COMPANY WAS A RELATIVE OF DIRECTOR OF THE COMPANY PARS OLI CORPORATION LTD. THEREFORE TO AVOID ANY ACTION FROM SEBI THE TRANSACTION WAS SHOWN IN THE NAME OF RADHARAMAN PVT. LTD. AND I.T.A NO. 1715 /AHD/20 12 A.Y. 2008 - 09 PAGE NO ACIT VS. R J TRAKELINKS PVT. LTD. 8 CONFIRMATION WAS ALSO FURNISHED IN THE NAME OF RADHARAMAN HOLDING PVT. LTD. ACCORDINGLY THE OUTSTANDING LIABILITY WAS SHOWN IN THE NAME OF RADHARAMAN HOLDING PVT. LTD. INSTEAD OF ACTUAL BROKER I.E. PARSOLI CORPORATION LTD. IT IS SUBMITTED THAT THE CORRECT FACTS WERE DULY SHOWN IN THE BOOKS OF PARSOLI CORPORATION LTD AND THE ASSESSEE COMPANY WAS SHOWN AS DEBTOR IN THE BOOKS OF PARSOLI CORPORATION LTD. WITH THE OUTSTANDING AMOUNT OF RS. 6 49 51 200/ - AFTER CONSIDERING THE PART PAYMENT OF RS. 25 48 800/ - MADE BY THE ASSESSEE COMP ANY TOWARDS PURCHASE OF SHARES. I N VIEW OF THE ABOVE FACTS THE OUTSTANDING BALANCE WAS WRONGLY SHOWN IN THE NAME OF RADHARAMAN PVT. LTD. IN THE BOOKS OF THE ACCOUNT OF THE ASSESSEE COMPANY. THE ASSESSEE HAS ALSO SUBMITTED THE DULY CONFIRMED COPY OF ACCOUNT OF THE ASSESSEE COMPANY FROM THE BOOKS OF PARSOLI CORPORATION LTD. FOR THE YEAR UNDER CONSIDERATIO N SHOWING OUTSTANDING BALANCE OF RS. 6 49 51 200/ - IN THE NAME OF THE ASSESSEE COMPANY. BEFORE THE LD. CIT(A) THE ASSESSEE HAS ALSO SUBMITTED THAT BECAUSE OF THE FOLLOWING REASONS THE TRANSACTIONS CANNOT BE CONSIDERED AS IN GENUINE : - (I) THE TRANSACTIO NS ARE REAL TRANSACTIONS AND NOT MERELY BOOK/PAPER ENTRIES AS ALLEGED OR ASSUMED BY THE A.O. (II) THE DELIVERIES HAVE BEEN ROUTED THROUGH THE DEMAT ACCOUNT. (III) THE PART PAYMENT MADE TOWARDS PURCHASE OF SHARES HAS BEEN MADE THROUGH BANKING CHANNELS. SIMI LARLY THE SALE CONSIDERATION ON SALE OF SOME OF THE SHARES HAS ALSO BEEN RECEIVED THROUGH BANKING CHANNELS. (IV) THE CONFIRMATION OF THE ACTUAL PARTY THROUGH WHOM THE PURCHASE OF SHARES OF PARSOLI CORPORATION LTD. HAS BEEN MADE IS FURNISHED. THE NAME OF THE APPELLANT COMPANY IS THUS REFLECTED AS A DEBTOR IN THE BOOKS OF THE BROKER COMPANY. (V) MARKET QUOTATIONS IN SUPPORT OF PRICE OF SHARES ON THE DATE OF PURCHASE AND SALE ARE FURNISHED WHICH ESTABLISHES THAT THE TRANSACTIONS ARE WITHIN THE MARKET RANGE. 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 A SSESSEE HAS FURNISHED ACTUAL EVIDENCES IN THE NAME OF CORRECT PARTY I.E. I.T.A NO. 1715 /AHD/20 12 A.Y. 2008 - 09 PAGE NO ACIT VS. R J TRAKELINKS PVT. LTD. 9 PARS OLI 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 WE RE REQUIRED TO BE ADMITTED TO DECIDE THE ISSUE ON THE BASIS OF CORRECT FACT OF THE CASE. IT WAS A LSO 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 27 TH DECEMBER 2010 . T HE RE FORE 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 SUFFICIE NT CAUSE FOR PRODUCING THE AFORESAID FACTS AND EVIDENCES BEFORE THE ASSESSING OFFICER AND REQUESTED TO AD MIT THE SAME AS PER PROVISION OF RULE 46 OF THE IT RULE 1962. T HEREFORE THE LD. CIT(A) HAS ADMITTED SUCH EVIDENCES FOR THE SAKE OF SUBSTANTIAL JUSTIC E 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 U NDISPUTED FACT THAT ASSESSEE HAS PURCHASED 5 LACS OF SHARES OF P ARSOLI 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 Y EAR 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 I.T.A NO. 1715 /AHD/20 12 A.Y. 2008 - 09 PAGE NO ACIT VS. R J TRAKELINKS PVT. LTD. 10 THAT THESE SHAR ES ISSUED WERE NOT PURCHASED FRO M RADHARAMAN HOLDING PV T. 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 O F 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. 7. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSED . ORDER PR ONOUNCED IN THE OPEN C OURT ON 15 - 11 - 201 9 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 15 /11 /2019 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER/ /