DCIT CEN CIR 9, MUMBAI v. GTL TECHNOLOGY INVESTMENT LTD, MUMBAI

ITA 4420/MUM/2014 | 2004-2005
Pronouncement Date: 28-11-2017 | Result: Allowed

Appeal Details

RSA Number 442019914 RSA 2014
Assessee PAN AAACG8945F
Bench Mumbai
Appeal Number ITA 4420/MUM/2014
Duration Of Justice 3 year(s) 5 month(s) 4 day(s)
Appellant DCIT CEN CIR 9, MUMBAI
Respondent GTL TECHNOLOGY INVESTMENT LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 28-11-2017
Appeal Filed By Department
Tags No record found
Order Result Allowed
Bench Allotted G
Tribunal Order Date 28-11-2017
Date Of Final Hearing 07-04-2017
Next Hearing Date 07-04-2017
First Hearing Date 07-04-2017
Assessment Year 2004-2005
Appeal Filed On 24-06-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH MUMBAI BEFORE SHRI R.C.SHARMA AM & SHRI RAM LAL NEGI JM ITA NO. 4420 / MUM/20 14 ( ASSESSMENT YEAR : 2004 - 05 ) DCIT CEN CIR 9 9 TH FLOOR OLD CGO ANNEXE BUILDING M.K. ROAD MUMBAI - 400 0 20 VS. M/S.GTL TECHNOLOGY INVESTMENT LTD. NOW MERGED WITH M.S. GTL LTD. 412 JANMABHOOMI CHAMBERS 29 W.H. MARG BALLARD ESTATE MUMBAI 400 038 PAN/GIR NO. AAACG8945F APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI MANISH SHAH R EVENUE BY SHRI M.V. RAJGORE DATE OF HEARING 01 / 09 /201 7 DATE OF PRONOUNCEME NT 28 / 11 /201 7 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) - 4 MUMBAI DATED 21/04/2014 FOR A.Y.2004 - 05 I N THE MATTER OF ORDER PASSED U/S.143(3) OF THE IT ACT. 2. THE FOLLOWING GROUNDS HAVE BEEN TAKEN BY REVENUE: - (I) 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) HAS ERRED IN ALLOWING CAPITAL LOSS OF RS. 5 24 72 454/ - WITHOUT APPRECIATING THE FACT THAT NO EVIDENCE WAS FURNISHED BY THE ASSESSEE IN RESPECT OF PURCHASE AS WELL AS SALE OF SHARES OF M/S. THINK HARBOR CONSULTING INDIA (P) LTD AND AN INTERNET ARCHITECH (I) PVT LTD. AND THE LOSS CLAIMED BY THE ASSESSEE ON SALE OF SUCH SHARES OUGHT NOT TO HAVE BEEN ALLOWED BY THE CIT(A).' ITA NO. 4420/MUM/2014 M/S.GTL TECHNOLOGY INVESTMENT LTD. 2 (II) 'WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 35 25 000/ - TREATED AS UNEXPLAINED CASH CREDIT AS THE ASSESSEE COU LD NOT FURNISH ANY DOCUMENTARY EVIDENCE REGARDING THE SOURCE OF THIS CREDIT' 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. 4. FACTS IN BRIEF ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF TRADING IN SHARES AND INVESTMENT. THE ASSE SSEE COMPANY FURNISHED ITS RETURN OF INCOME FOR A.Y.2004 - 05 ON 04.10.2004 DECLARING TOTAL INCOME (LOSS) OF ( - )RS. 1 70 260/ - . THE LAO COMPLETED THE ASSESSMENT ON 09.10.2006 UNDER SEC. 143(3) OF THE ACT ASSESSING TOTAL INCOME OF RS. NIL AFTER ADJUSTING BROU GHT FORWARD LOSSES. AGAINST THE SAID ASSESSMENT ORDER THE ASSESSEE HAD PREFERRED AN APPEAL BEFORE CIT(A) - 4 MUMBAI ON 17/11/2006 WHICH WAS DECIDED IN ASSESSEE S FAVOUR VIDE APPELLATE ORDER NO. CIT(A) - 4/ITO.2(L)(4)/IT.16/2006 - 07 DATED 05/11/2009. THE AO FI LED THE APPEAL WITH THE HON'BLE ITAT AGAINST THE SAID ORDER ON 03/02/2010. HON'BLE ITAT G BENCH MUMBAI .IN ITA NO. 879/MUM/2010(A.Y. 2004 - 05) DATED 16.05.2012 HAS SET ASIDE THE ORDER OF LD. CIT(A) AND RESTORED ENTIRE MATTER TO HIS FILE BECAUSE THE APPEA L MEMO IN FORM NO. 35 VERIFICATION AND ITS GROUNDS OF APPEAL FILED BY THE ASSESSEE BEFORE THE LD. CIT(A) WERE SIGNED BY THE BY. COMPANY SECRETARY. THE SECTION 140 OF THE ACT DOES NOT AUTHORIZE DY. COMPANY SECRETARY TO SIGN THE APPEAL MEMO. HON'BLE ITAT ' G ' BENCH MUMBAI DIRECTED THE LD. CIT(A) TO GIVE OPPORTUNITY TO THE ASSESSEE TO RECTIFY THE SAID DEFECT AND THEN TO DISPOSE OFF THE APPEAL O N MERIT AS PER PROVISIONS ITA NO. 4420/MUM/2014 M/S.GTL TECHNOLOGY INVESTMENT LTD. 3 OF LAW AS ADMITTEDLY WHEN THE SAID APPEAL WAS DECIDED IT WAS NOT FILED BY THE PERSON AUTHOR IZED UNDER SECTION 140 OF THE ACT. 5. IN THE SET ASIDE PROCEEDINGS THE CIT(A) RECTIFIED TECHNICAL MISTAKE AFTER OBSERVING AS UNDER: - RESPECTFULLY FOLLOWING THE PRINCIPLES APPROVED BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. INDO - ADEN SALT WORKS CO. REPORTED IN (1959) 36 ITR 429 (BOAA) AND IN THE LIGHT OF SPECIFIC DIRECTIONS OF HON' BLE ITAT VIDE ITA NO. NO. 879/M UM/2010(A.Y. 2004 - 05) IN THE APPELLANT'S OWN CASE DATED 16.05.2012 THE APPELLANT WAS GIVEN OPPORTUNITY TO RECTIFY THE DEFECT IN FORM NO. 35. THE APPELLANT HAS RECTIFIED THE DEFECT IN FORM NO. 35 AND NOW FORM NO. 35 HAS BEEN SIGNED BY THE CHAIRMAN AND MANAGING DIRECTOR OF THE APPELLANT COMPANY AND HE HAS ALSO VERIFIED THE SAID FORM NO.35. THEREFORE DIRECTIO NS OF HON'BLE ITAT HAVE BEEN COMPLIED WITH. SECONDLY THE SAME GROUNDS OF APPEAL IN THE CASE OF THE SAME APPELLANT AND FOR THE SAME ASSESSMENT YEAR HAVE ALREADY BEEN ADJUDICATED BY MY LEARNED PREDECESSOR CIT(A) VIDE APPEAL NO. CITM - 4/RRA2FLX4)/IT.I6/2006 - 07 DATED 05/11/2009 RESPECTFULLY FOLLOWING THE DECISION OF MY LEARNED PREDECESSOR AND UPHOLDING THE PRINCIPLES OF JUDICIAL CONSISTENCY THE PRESENT APPEAL IS TREATED AS A COVERED MATTER SQUARELY COVERED BY THE DECISION OF CITM - 4. MUMBA I IN THE CASE OF T HE SAME APPELL ANT. FOR THE SAME ASSESSMENT YEAR AND FOR THE SAME GROUNDS OF APPEAL. THEREFORE THIS SET ASIDE APPEAL IS ALLOWED BY TREATING THIS APPEAL AS A COVERED MATTER ON MERITS OF THE CASE. 6. ON MERITS OF THE ADDITION SO DELETED THE CIT(A) FOLL OWED THE ORDER OF ITS PREDECESSOR SINCE THERE IS NO COMMENT BY THE TRIBUNAL IN THE FIRST ROUND WITH REGARD TO THE MERIT OF THE ADDITIONS DELETED BY CIT(A) THE CIT(A) FOLLOWED THE EARLIER ORDER OF PREDECESSOR AND CONFIRMED THE DELETION SO MADE. 7. FROM TH E RECORD WE FOUND THAT IN RESPECT OF LOSS ON TRANSFER OF SHARES OF INTERNET ARCHITECT (L) PVT. LTD. THE ASSESSEE FURNISHED 4 SHARE CERTIFICATES OF 24 LAKH SHARES. THE A.O. HAS NOTED THAT THESE SHARES ARE ITA NO. 4420/MUM/2014 M/S.GTL TECHNOLOGY INVESTMENT LTD. 4 IN THE NAME OF INTERNET HOLDING GLOBAL LTD. WHICH IS THE OLD NAME OF THE COMPANY. HE HAS FURTHER STATED THAT NO DOCUMENTARY EVIDENCE REGARDING ALLOTMENT OF ABOVE SHARES RATE PER SHARE SHARE PREMIUM ETC. WAS FURNISHED IN SUPPORT OF THE ABOVE ENTRIES. THE A.O. HAS FURTHER NOTED THAT ON PERUSAL OF COPIES OF BANK STATEMENT IT IS SEEN THAT FOR THE MONTH OF SEPTEMBER 2003 CLOSING BALANCE WAS RS.17 247/ - . IN THE BANK STATEMENT FOR THE MONTH OF NOVEMBER 2003 THERE WAS OPENING BALANCE OF RS.29 35 776/ - BELOW IT THERE WAS A HAND WRITTEN REMARK (INCLUDING RS.29 25 000/ - ) BEING CHEQUE RECEIVED FROM M/S. AN INTERNET ARCHITECT (I) PVT. LTD. NO STATEMENT FOR THE MONTH OF OCTOBER 2003 WAS FILED. HOWEVER NO DETAILS TO PROVE THE GENUINENESS OF THE TRANSACTION WERE FILED BY THE ASSESSEE. ACCORDINGLY THE A.O. HELD THAT THE ASSESSEE COMPANY HAD NOT PURCHASED ANY SHARES OF THE ABOVE COMPANY AND THE CLAIM OF CAPITAL LOSS ON SALE OF THESE SHARES CANNOT BE ALLOWED. ACCORDING TO HIM SALE OF 24 LAKH SHARES OF M/S. AN INTERNET ARCHITECT (I) PVT. LTD. IS NOTHING BUT BOGUS TRANSAC TION. HENCE THE CLAIM OF CAPITAL LOSS OF . RS.5 24 72 454/ - WAS DISALLOWED ALONG WITH LOSS ON SALE OF SHARES OF THINK HARDWARE CONSULTING AMOUNTING TO RS.95 78 628/ - . SO THE TOTAL LOSS OF RS.6 20 61 082/ - WAS DISALLOWED. 8 . WE FOUND THAT VIDE ORDER DATED 21/04/2014 THE CIT(A) HAS DELETED THE ADDITION AFTER OBSERVING AS UNDER: - 5. I HAVE DULY CONSIDERED THE SUBMISSIONS OF THE A.R. AND I FIND THAT THE A.R. HAS SHOWN THAT THE ASSESSEE HAS INDEED PURCHASED THE SHARES AND SHOWN THEM IN THE BALANCE - SHEET. THE A SSESSEE HAS ALSO BEEN ABLE TO SHOW THE TRANSFER OF FUNDS THROUGH THE BANK PASSBOOK ENTRIES . THE ASSESSEE HAS CLAIMED CAPITAL LOSS WHICH CANNOT BE ITA NO. 4420/MUM/2014 M/S.GTL TECHNOLOGY INVESTMENT LTD. 5 DISALLOWED ON THE GROUND THAT THE PURCHASE AND SALE OF SHARES IS FICTITIOUS WHEN THE MOVEMENT OF FUNDS IS REAL LY VISIBLE FROM BANK STATEMENT AND THE AUDITED BALANCE - SHEET OF THE APPELLANT COMPANY. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE A.O. IS DIRECTED TO ALLOW THE CLAIM OF CAPITAL LOSS AND DELETE THIS ADDITION. THIS GROUND OF APPEAL IS ALLOWED. 6. IN GR OUND NO. 2 THE ASSESSEE IS AGGRIEVED BY ACTION OF THE A.O. IN TREATING A SUM OF RS.32 25 000/ - AS UNEXPLAINED CASH CREDIT. IN THE ASSESSMENT ORDER THE A.O. HAS NOTED THAT THE ASSESSEE HAS CLAIMED LOSS ON SALE OF SHARES OF THINK HARBOR CONSULTING (I) PVT. LTD. AND AN INTERNET ARCHITECT (I) PVT. LTD. THE ASSESS EE HAS ALSO RECEIVED SALE CONSIDERATION OF RS.3 LAKH. THIS SALE CONSIDERATION WAS TREATED AS CASH CREDIT AS THE A.O. HAS TREATED THE TRANSACTION OF SALE OF SHARES AS BOGUS TRANSACTION AS ACCORDING TO THE A.O. THE ASSESSEE NOT PRODUCE ANY DOCUMENTARY EVIDENCE OF HAVING ACQUIRED THE SHARES IN ITS POSSESS ION. T HE A.R. SUBMITTED THAT THE A.O. HAS IGNOR ED THE INVESTMENT A/C. AND COPIE S OF BANK STATEMENT FURNISHED BY THE APPELLANT WHICH PROVES THAT THE AMO UNT OF RS.29 25 000 AND RS.3 LAKH WERE RECEIVED TOWARDS SALE CONSIDERATION. THE A.O. HAS ALSO IGNORED THE ACCOUNTING ENTRIES IN THE AUDITED BALANCE - SHEET FROM YEAR TO YEAR COPIES OF THE SHARE CERTIFICATES HANK STATEMENT AND HANK HOOK SUBMITTED DURING THE COURSE OF ASSESSMENT. HENCE IT IS REQUESTED THAT THE ADDITION ON ACCOUNT OF UNEXPLAINED CASH CREDIT SHOULD BE DELETED. 8. I HAVE DULY CONSIDERED THE SUBMISSIONS OF THE A.R. AND I FIND THAT THE ASSESSEE HAS SHOWN BANK STATEMENT AND AUDITED BALANC E - SHEET TO PROVE THAT THIS AMOUNT OF RS.3 LAKH WAS RECEIVED TOWARDS SALE CONSIDERATION OF SHARES. THE ASSESSEE'S BALANCE - SHEET ALSO SHOWS THE ENTRIES OF PURCHASE AND SALE. EVEN THE A O. LIAR NOTED THAT THE ASSESSEE FURNISHED 4 SHARE CERTIFICATES OF 2 4 LAKH WHICH ARE IN THE NAME OF INTERNET HOLDING GLOBAL LTD. WHICH IS THE OLD NAME OF THE COMPANY. HENC E THE TRANSACTION HAS TO BE TREATED AS GENUINE TRANSACTION A S THE ASSESSEE HAS PROVED TRANSFER OF FUNDS THROUGH BANKING CHANNELS. THE A.O. IS DIRECT ED TO DELETE THIS ADDITION. HENCE THIS GROUND OF APPEAL IS ALLOWED. 9 . NOW THE REVENUE IS BEFORE US CHALLENGED THE ORDER OF CIT(A) DELETING THE ADDITION SO MADE BY AO. 10. WE HAVE CONSIDERED RIVAL CONTENTI ONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND THAT I N RESPECT OF SHARES OF ITA NO. 4420/MUM/2014 M/S.GTL TECHNOLOGY INVESTMENT LTD. 6 THINK HARBOR CONSULTING INDIA P. LTD. THE ASSESSEE HAS SHOWN SALE CONSIDERATION OF RS.3 00 000/ - AND INDEXATION COST OF RS.98 78 628/ - RESULTING INT O CAPITAL LOSS OF RS.95 78 628/ - . IN RESPECT OF SHARES OF AN INTERNET ARCHITECT (I) PVT. LTD. THE ASSESSEE HAS SHOWN SALE CONSIDERATION OF RS.29 25 000/ - AND INDEXATION COST OF RS.5 53 97 454/ - RESULTING INTO CAPITAL LOSS OF RS. 5 24 72 4547 - . 11 . IN ORD ER TO VERIFY THE GENUINENESS OF THE ASSESSEE'S CLAIM THE ASSESSEE COMPANY WAS REQUESTED BY AO VIDE ORDER SHEET NOTI NGS DATED 9.5. 20 06 17.5. 20 06 & 13.6.2006 TO FURNISH THE DOCUMENTARY EVIDENCES REGARDING SAL E AND PURCHASE OF SHARES ALONGWI TH COPIES OF CON TRACT NOTES DEMAT ACCOUNT AND BANK STATEMENTS REFLECTING THE TRANSACTION. THE ASSESSEE HAS SUBMITTED THE FOLLOWING DOCUMENTS IN SUPPORT OF ITS CLAIM. A. COPY OF BANK STATEMENT B. COPY OF THE LEDGER ACCOUNT C. COPIES OF CHEQUE RECEIVED FO R RS.29 25 000 & RS.3 00 000/ - (COMPRIS I NG OF 6 CHEQUES) BEING SALE CONSIDERATION RECEIVED. D. COPIES OF SHARE CERTIFICATES FOR THE SHARES PURCHASED. 6. ON VERIFICATION OF THE ABOVE DOCUMENTS THE FOLLOWING DISCREPANCIES WERE OBSERVED BY AO WHICH AR E NARRATED IN RESPECT OF THE SALE OF SHARES OF EACH COMPANY. M/S. THINK HARBOR CONSULTING INDIA PVT. LTD. IT IS OBSERVED THAT THE SHARE CERTIFICATES REPRESENTING 9999 SHARES WERE FOUND IN THE NAME OF POONIMA JAYRAJ SIMILARLY SHARE CERTIFICATE REPRESENTING 10 000 NO OF SNARES WERE IN THE NAME OF GLOBAL TECHNOLOGY VENTURES LTD. REGARDING BALANCE SHARES NO DETAILS HAVE BEEN FURNISHED - BY THE ASSESSEE. 6.1. THE ASSESSEE WAS THEREFORE ASKED VIDE THIS OFFICE LETTER DATED 17.8.2006 TO JUSTIFY ITS CLAIM OF LOSS O N ACCOUNT OF ABOVE SHARES WHICH WERE NOT IN THE NAME OF THE ITA NO. 4420/MUM/2014 M/S.GTL TECHNOLOGY INVESTMENT LTD. 7 COMPANY. ON PERUSAL OF THE COPIES OF SHARE CERTIFICATES IT IS OBSERVED THAT THE REVERSE SIDE OF THE SHARE CERTIFICATE IS TOTALLY BLANK INSTEAD OF COLUMNS INDICATING TRANSFEREE'S NAME IF ANY AS T E THE NORMAL PRACTICE. EVEN THE BANK STATEMENTS OF NOVA SCOTIA BANK OBTAINED FROM THE BANK IT IS REVEALED THAT A PAY ORDER OF RS.65 00 000/ - DT. 13.12.2002 WAS ISSUED IN FAVOUR OF M/S. GLOBAL TECHNOLOGY VENTURE LTD. AND NOT IN FAVOUR OF M/S. THINK HARBOR CONSULTING INDIA PVT. LTD THUS IT WILL BE SEEN THAT THE ASSESSEE COMPANY HAS NOT PURCHASED ANY SHARES OF M/S. THINK HARBOR CONSULTING INDIA PVT. LTD. AS HAS BEEN CLAIMED BY THE ASSESSEE COMPANY. FURTHER ASSESSEE COMPANY WAS ALSO REQUESTED TO EXPLAIN WHY THE SALE CONSIDERATION RECEIVED OF RS.3 00 000/ - SHOULD NOT BE TREATED AS UNEXPLAINED CASH CREDIT AS THE ASSESSEE COMPANY COULD NOT ESTABLISH THE GENUINENESS OF THE TRANSACTION WITH SUPPORTING DOCUMENTS. 6.2 THE ASSESSEE COMPANY VIDE ITS LETTER DATED 25.3 .2006 STATED THAT THEY IN THE PROCESS OF LOCATING THE COPIES OF SHARE CERTIFICATES ATONGWITH THE TRANSFER DEED.. REGARDING THE SALE CONSIDERATION RECEIVED THE ASSESSEE COMPANY HAS SUBMITTED 6 CHEQUES RECEIVED FROM DIFFERENT PARTIES WHICH WERE DRAWN FROM THE FORT BRANCH OF SYNDICATE BANK. IN THE ABSENCE OF ANY TRANSFER DEED OR OTHER CONFIRMATION REGARDING THE ACTUAL TRANSFER OF SHARES IT CART NOT BE SAID THAT THE CHEQUES RECEIVED ARE IN RESPECT OF THE SALE OF SHARES. THE ASSESSEE WAS THEREFORE GIVEN ONE M ORE OPPORTUNITY VIDE THIS OFFICE LETTER DATED 13.9.2006 TO EXPLAIN THE GENUINENESS OF THIS TRANSACTION WITH SUPPORTING DOCUMENTARY EVIDENCE OF HAVING HELD THESE SHARES IN POSSESSION. HOWEVER THE ASSESSEE NEITHER ATTENDED NOR SUBMITTED ANY EXPLANATION ABOU T THE GENUINENESS OF THE TRANSACTION AS ALSO THE NATURE OF AMOUNT RECEIVED BY WAY OF SALE CONSIDERATION CREDITED IN THE ACCOUNT. THUS IT IS PROVED THAT THE ASSESSEE COMPANY HAD NOT PURCHASED ANY SHARES OF THE ABOVE COMPANY AND THEREFORE THE CLAIM OF CAPITA L LOSS ON SALE OF THOSE SHARES CAN NOT BE ALLOWED. IN THE CIRCUMSTANCES IT IS ESTABLISHED THAT THE ENTIRE EXERCISE OF PURCHASE AND SALE OF 29999 SHARES OF THINK HARBOR CONSULTING PVT. LTD. IS NOTHING BUT BOGUS TRANSACTION AS THE ASSESSEE COULD NOT FURNISH ANY DOCUMENTARY EVIDENCE OF HAVING ACQUIRED THE SHARES IN ITS POSSESSION. THEREFORE THE ASSESSEE'S CLAIM FOR CAPITAL TOSS OF RS.95 78 628/ - IS DISALLOWED AND THE SUM OF RS. 3 00 000/ - ALLEGED TO HAVE RECEIVED BY WAY OF SALE CONSIDERATION IS TREATED AS UNEXPLAINED CASH CREDIT AND ACCORDINGLY ADDED TO THE INCOME OF THE ASSESSE E. PENALTY PROCEEDINGS U/S.271(1 )(C) ARE INITIATED SEPARATELY FOR FURNISHING INACCURATE PARTICULARS OF INCOME. 7. AN INTERNET ARCHITECT F N PVT. LTD. IN THIS CASE THE ASSESSEE HAS F URNISHED COPIES OF 4 SHARE CERTIFICATES OF 24 L ACS SHARES. ON PERUSAL OF THE SAME IT I S SEEN THAT THESE ARE IN THE NAME OF INTENET HOLDI NG GLOBAL LTD. THE OLD NAME OF THE COMPANY . THE REVERSE SIDE OF THESE CERTIFICATES WERE TOTALLY BLAN K INSTEAD OF COLUMNS INDICATING TRANSFEREE'S NAME IF ANY AS IN THE NORMAL PRACTICE. FURTHER IT IS ALSO OBSERVED THAT THERE IS A SIGNATURE WITH THE REMARK 'RECEIVED ORIGINAL FOR SELLING AS PER MANAGEMENT DECISION'. IT IS ALSO NOT DEAR AS TO WHO HAS PUT THIS REMARK THE REFORE IT CAN NOT BE CONCLUDED THAT THESE SHARES WERE IN FACT TRANSFERRED TO SOME OTHER PARTY. THE ASSESSEE COMPANY ALSO COULD NOT FURNISH ANY DOCUMENTARY EVIDENCE REGARDING THE SATE OF SHARES. 7. 1 FURTHER ON VERIFICATION OF THE LEDGER ACCOUNT FOR INVEST MENT IN M/S. AN INTERNET ARCHITECT (I) PVT. LTD. IT IS SEEN THAT THERE ARE 4 ENTRIES IN THE LEDGER ACCOUNT FOR PAYMENT OF RS.4 CRORES TOWARDS THE SHARE APPLICATION MONEY AND ONLY 1 ENTRY EXISTS FOR PAYMENT OF RS. 90 LACS PAID TO M/S. AN INTERNET ARCHITECT (I) PVT. LTD. TOWARDS THE SUBSCRIPTION OF 20 LAC SHARES OF RS. 1 PER SHARE AT A PREMIUM OF RS. 3.50 PER SHARE. NO DOCUMENTARY EVIDENCE REGARDING ALLOTMENT OF ABOVE SHARES RATE PER SHARE SHARE PREMIUM ETC . HAS BEEN FILED SO FAR IN SUPPORT OF THE ABOVE . ENTRIES. IT IS ALSO NOT UNDERSTOOD FROM THE 4 ENTRIES STATED ABOVE (FOR RS. 4 CRORES) THAT HOW MANY SHARES WERE PURCHASED I N ALL WITH THE RATE PER SHARE AND THE PREMIUM PER SHARE. ITA NO. 4420/MUM/2014 M/S.GTL TECHNOLOGY INVESTMENT LTD. 8 7.2 ON PERUSAL OF THE B/S. FOR THE EARLIER YEARS IT IS REVEALED THAT THE A SSESSEE HAS DEBITED A SUM OF RS.4. 9 CRORES AS DIMINISHING VALUE OF 24 LAC SHARES AND THEREBY INVESTMENT I S SHOWN AT NIL. DURING THE YEAR THE ASSESSEE COMPANY HAS SOLD THESE SHARES FOR RS.29 25 000/ - AND CLAIMED LONG TERM CAPITAL LOSS OF RS. 5 24 72 454/ - . THIS AMOUNT WAS CLAIMED TO HAVE BEEN RECEIVED BY CHEQUE DRAWN ON STANDARD CHARTERED BANK 2 - 3 BASANT LOK BASANT VIHAR DELHI. 7.3 ON PERUSAL OF THE COPIES OF BANK STATEMENTS SUBMITTED BY THE ASSESSEE N RESPECT OF THE ABOVE TRANSACTION. IT IS SEEN THAT FOR THE MONTH OF SEPTEMBER 2003 THE CLOSING BALANCE WAS RS.17 247/ - . IN TH E BANK STATEMENT FOR THE MONTH OF NOVEMBER 2003 THE RE WAS AN OPENING BALANCE OF RS.29 35 776/ - . BELOW THE STATEMENT THERE 'WAS A HAND WRITTEN REMARK '(INCLUDING RS.29 25 000/ - BEI NG CHEQUE RECEIVED FROM M/S. AN INTERNET ARCHITECT (I) PVT. LTD.)' NO STATEMENT FOR THE MONTH OF SEPTEMBER 2003 WAS FILED BY THE ASSESSEE INSP I TE OF REPEATED REQUEST FOR THE SAME. THEREFORE THE NATURE OF AMOUNT CREDITED CAN NOT BE ASCERTAINED. 7.4 THE ASSE SSEE WAS THEREFORE GI VEN ONE MORE OPPORTUNITY VIDE THIS OFFICE L ETTER DATED 13 9.2006 TO EXPLAIN THE GENUINENESS OF THIS TRANSACTION WITH SUPPORTING DOCUMENTARY EVIDENCE OF HAVING HELD THESE SHARES IN POSSESSION. HOWEVER THE ASSESSEE NEITHER ATTENDED NOR SUBMITTED ANY EXPLANATION ABOUT THE GENUINENESS OF THE TRANSACTION AS ALSO TH E NATURE OF AMOUNT RECEIVED BY W AY OF SALE CONSIDERATION CREDITED IN THE ACCOUNT. THUS IT IS PROVED THAT THE ASSESSEE COMPANY HAD NOT PURCHASED ANY SHARES OF THE ABOVE COMPANY AN D THEREFORE THE CLAIM OF CAPITAL TOSS ON SATE OF THOSE SHARES CAN NOT BE ALLOWED. IN THE CIRCUMSTANCES IT IS ESTABLISHED THAT THE ENTIRE EXERCISE OF PURCHASE AND SATE OF 24 LACS SHARES OF M/S. AN INTERNET ARCHITECT (I) PVT. LTD. IS NOTHING BUT BOGUS TRANSA CTION AS THE ASSESSEE COULD NOT FURNISH ANY DOCUMENTARY EVIDENCE OF HAVING ACQUIRED THE SHARES IN ITS POSSESSION. THEREFORE THE ASSESSEE'S CLAIM FOR CAPITAL LOSS OF RS. 5 24 72 454/ - IS DISALLOWED AND THE SUM OF RS. 29 25 000/ - ALLEGED TO HAVE RECEIVED BY WAY OF SALE CONSIDERATION IS TREATED AS UNEXPLAINED CASH CREDIT AND ACCORDINGLY ADDED TO THE INCOME OF THE ASSESSEE. PENALTY PROCEEDINGS U/S.271(L)(C) ARE INITIATED SEPARATELY FOR FURNISHING INACCURATE PARTICULARS OF INCOME. 8 TO SUMMARISE THE CAPITAL LO SS CLAIMED BY THE ASSESSEE COMPANY AMOUNTING TO RS.6 20 51 082/ - (RS 95 78 628 + RS.5 24 72 454/ - ) IS DISALLOWED AND SUM OF RS.32 25 000 ( RS.3 00 000 + RS.29 25 000) IS TREATED AS UNEXPLAINED CASH CREDIT BROUGHT IN THE BOOKS OF ACCOUNTS AND ACCORDINGLY A SUM OF RS.32 25 000 IS DISALLOWED U/S.68 OF THE IT ACT. ' 12.IT APPEARS FROM THE ORDER OF THE AO THAT SHARES OF THINK HARBOR CONSULTING INDIA (P) LTD . WERE NOT TRANSFERRED IN THE NAME OF THE ASSESSEE COMPANY. EVEN THE PAYMENT SHOWN BY THE ASSESSEE IN T HE BANK STATEMENT WAS NOT IN FAVOUR OF THINK HARBOR CONSULTING INDIA (P) LTD . EVEN THE ASSESSEE COULD NOT FURNISH ANY REASON FOR SUBSTANTIAL ITA NO. 4420/MUM/2014 M/S.GTL TECHNOLOGY INVESTMENT LTD. 9 DECLINE OF SHARE PRICE FROM RS.95 78 628/ - TO RS.3 00 000/ - . FURTHERMORE ANY PROOF OF THE ALLEGED SALES PRICE CLAI MED BY THE ASSESSEE WAS NEITHER BEFORE THE AO NOR BEFORE THE CIT(A). ACCORDIN GLY A LOSS OF RS.95 78 628/ - S O CLAIMED BY THE ASSESSEE REMAIN UNCORROBORATED. 13. WITH REGARD TO THE SALE OF SHARE OF M/S. INTERNET ARCHITECH (I) PVT LTD. THE ASSESSEE COUL D NOT FURNISH ANY DOCUMENTARY EVIDENCE FOR SALE OF THE SHARES. ON VERIFICATION OF LEDGER ACCOUNT TO FIND OUT INVESTMENT IN M/S. INTERNET ARCHITECH (I) PVT LTD. AO FOUND THAT THERE ARE FOUR ENTRIES IN THE LEDGER ACCOUNT FOR PAYMENT OF RS.4 CRORES TOWARDS S HARE APPLICATION MONEY AND ONE ENTRY FOR PAYMENT OF RS.90 LAKHS TOWARDS SUBSCRIPTION OF RS.20 LAKH SHARES OF RS.1 PER SHARE AT A PREMIUM OF RS. 3.50 PER SHARE. AO OBSERVED THAT N O DOCUMENTARY EVIDENCE REGARDING ALLOTMENT OF ABOVE SHARES RATE PER SHARE SHARE PREMIUM ETC. HAS BEEN FILED BY THE ASSESSEE INSPITE OF GIVING SPECIFIC OPPORTUNITY. AO HAS ALSO OBSERVED THAT ASSESSEE HAS DEBITED A SUM OF RS.4.90 CRORES AS DIMINISHING VALUE OF 24 LAC SHARES AND THEREBY INVESTMENT I S SHOWN AT NIL. HOWEVER D URING THE YEAR THE ASSESSEE COMPANY HAS SOLD THESE SHARES FOR RS.29 25 000/ - ON WHICH LONG TERM CAPITAL LOSS OF RS. 5 24 72 4 54/ - WAS CLAIMED . NO DOCUMENTARY EVIDENCE TO SUBSTANTIAL DRASTIC DECLINE IN VALUE OF SHARES WAS FURNISHED BY THE ASSESSEE. WE FOUND THAT WITHOUT CONTROVERTING DETAILED FINDING SO RECORDED BY THE AO THE CIT(A) HAS DELETED THE ADDITION MERELY BY OBSERVING THAT ASSESSEE WAS IN RECEIPT OF SALE PROCEEDS IN RESPECT OF SHARES SO SOLD THROUGH CHEQUE . WHILE ACCEPTING ASSESSEES CLAIM OF HUGE LOSS O N SALE OF SHARES JUSTIFIABLE REASON FOR ITA NO. 4420/MUM/2014 M/S.GTL TECHNOLOGY INVESTMENT LTD. 10 DECLINE IN SHARE PRICES VALUATION R EPORT OF SHARES OF CLOSELY HELD C OMPANY AS ON THE DATE OF SALE ETC. IS REQUIRED TO BE FURNISHED IN THE ABSENCE OF WHICH LOSS SO CLAIMED CAN NOT BE ALLOWED. EVEN THE EVIDENCES AS KED BY AO TO PROVE THE GENUINENESS OF TRANSACTION WAS NOT DEALT WITH BY CIT(A) TO JUSTIFY THE CLAIM OF LOSS . NO REASON MUCH LESS THAN A COGENT REASON WAS ASSIGNED BY CIT(A) FOR ALLOWING HUGE LOSS ON SALE OF SHARES. 14. IN VIEW OF THE ABOVE WE DO NOT FIND ANY MERIT IN THE ORDER PASSED BY THE CIT(A) AND WE SET ASIDE THE SAME AND RESTORE THE MATTER BACK TO THE FILE OF THE AO FOR DECIDING AFRESH AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. ASSESSEE IS DIRECTED TO FURNISH THE DOCUMENTARY EVIDENCE TO THE PROVE THE GENUINENESS OF THE TRANSACTION OF PURCHASE AND SALE WHEREIN ASSESSEE HAS CLAIMED LOSS OF RS. 6 20 51 082/ - . IT IS PERTINENT TO MENTION THAT REASON S FOR SUBSTANTIAL DECLINE IN SHARE PRICE IS ALSO REQUIRED TO BE FURNISHED WITH DOCUMENTARY EVIDENCE. WE DIRECT ACCORDINGLY. 15. IN THE RESULT APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 28 / 11 /2017 SD/ - ( RAM LAL NEGI ) SD/ - ( R.C.SHARMA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 28 / 11 /201 7 KARUNA SR. PS ITA NO. 4420/MUM/2014 M/S.GTL TECHNOLOGY INVESTMENT LTD. 11 COPY OF THE ORDER FORWARDED TO : BY ORDER ( ASSTT. REGISTRAR) ITAT MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) MUMBAI. 4. CIT 5. DR ITAT MUMBAI 6. G UARD FILE. //TRUE COPY//