Smt.Sabrina Gev Khergamwala , Bangalore V. The Income Tax Officer Ward-6(3)(2), Bangalore

MA 105/BANG/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 3725 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 9 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-11-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 31-08-2020

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, BANGALORE BEFORE SHRI. N. V. VASUDEVAN, VICE PRESIENT AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER [ M P NO. 10 5 /B ANG /20 20 (IN ITA NO.1254/BANG/2017)] (ASSESSMENT YEAR: 20 1 2 - 1 3 ) SMT. SABRINA GEV KHERGAMWALA, PROP: COLOUR INTERNATIONAL, X FLOOR, MANTRI ALTIUS, #17, RAJ BHAVAN ROAD, BENGALURU 560 001. APPLICANT VS. ITO, WARD 6[3][2], BENGALURU. RESPONDENT APPLICANT BY : SHRI. V. SRINIVASAN, ADVOCATE REVENUE BY : SMT. R. PREMI, JCIT DATE OF HEARING : 0 6 / 1 1 /20 20 DATE OF PRONOUNCEMENT : 09 / 1 1 /20 20 O R D E R PER A. K. GARODIA, ACCOUNTANT MEMBER: THIS MISCELLANEOUS PETITION (MP) IS FILED BY THE ASSESSEE AND IT IS CONTENDED IN THE SAME THAT THIS WAS THE ARGUMENT OF THE ASSESSEE BEFORE THE TRIBUNAL THAT THE AO AND CIT(A) HAVE NOT DOUBTED THE GENUINENESS OF THE SALE OF SHARES BY THE ASSESSEE AND THEY HAVE ONLY DOUBTED THE CLAIM OF SHARE PREMIUM PAID BY THE PETITIONER FOR ACQUISITION OF THE SHARES. THE ONLY TWO BASISES FOR DOUBTING THE SAME IS THE STATEMENT OF SHRI. K. R. KRISHNA, MANAGING DIRECTOR OF LVK BABYWEAR PVT. LTD. AND THIS FACT THAT NO VALUATION REPORT WAS FILED. IT IS ALSO STATED IN THE MP FILED BY THE MP NO. 105/BANG/2020 (IN ITA NO.1254/BANG/2017) PAGE 2 OF 5 ASSESSEE THAT THE ASSESSEE HAS PLACED IN THE PAPER BOOK FILED DURING THE COURSE OF HEARING OF APPEAL, THE AFFIDAVIT OF SHRI. K. R. KRISHNA, MANAGING DIRECTOR OF LVK BABYWEAR PVT. LTD., EXPLAINING HIS EARLIER STATEMENT THAT NO PREMIUM WAS PAID. IT IS STATED IN PARA 6 OF THE MP THAT THIS ARGUMENT OF THE ASSESSEE WAS NOT CONSIDERED BY THE TRIBUNAL AND THEREFORE, THIS TRIBUNAL ORDER IS CONTAINING AN APPARENT MISTAKE WHICH SHOULD BE RECTIFIED UNDER SECTION 254(2) OF THE INCOME TAX ACT, 1961. 2. IN COURSE OF HEARING OF THE MP, LEARNED AR OF THE ASSESSEE APPEARED AND REITERATED THE SAME CONTENTIONS WHICH ARE RAISED BY THE ASSESSEE IN THE MP AS NOTED ABOVE. AS AGAINST THIS, LEARNED DR SUBMITTED THAT THERE IS NO APPARENT MISTAKE IN THE TRIBUNAL ORDER AND THEREFORE, THE MP FILED BY THE ASSESSEE SHOULD BE DISMISSED. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT IN PARA 5 OF THE IMPUGNED TRIBUNAL ORDER, THE ISSUE IN DISPUTE WAS DECIDED BY THE TRIBUNAL AND FOR THE SAKE OF READY REFERENCE, WE REPRODUCE THIS PARA, WHICH READS AS UNDER: 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT BOTH THE AO AND CIT (A) HAVE GIVEN SEVERAL REASONS FOR REJECTING THE CLAIM OF THE ASSESSEE ABOUT PAYMENT OF SHARE PREMIUM. IT IS STATED BY THE LEARNED CIT (A) IN THE IMPUGNED ORDER THAT THE MD OF THE CONCERNED COMPANY IN THE STATEMENT RECORDED ON OATH ON 05.03.2015 HAD STATED THAT THE SHARES WERE ALLOTTED @ RS. 10/- PER SHARE AND THE NET WORTH MP NO. 105/BANG/2020 (IN ITA NO.1254/BANG/2017) PAGE 3 OF 5 OF THE COMPANY WAS IN NEGATIVE WHEN THE ASSESSEE PURCHASED THE SHARES AND THEREFORE, THE CLAIM OF PAYMENT OF SHARE PREMIUM IS NOT ACCEPTABLE PARTICULARLY IN THE ABSENCE OF ANY VALUATION REPORT SUPPORTING PAYMENT OF PREMIUM AND THIS FACT THAT WITHIN A SPAN OF 12 MONTHS, THE SHARES WORTH RS. 3 CRORES FACE VALUE WERE SOLD FOR ONLY RS. 10,000/-. IN OUR CONSIDERED OPINION, IN THE LIGHT OF VARIOUS FACTS AND REASONS NOTED BY BOTH THE LOWER AUTHORITIES WHICH COULD NOT BE CONTROVERTED BY THE LEARNED AR OF THE ASSESSEE, NO INTERFERENCE IS CALLED FOR. IN FACT, WE FEEL THAT EVEN THE LOSS OF RS. 299.90 LACS ALLOWED BY THE AO IS ALSO NOT PROPER BECAUSE IT IS QUITE ABNORMAL THAT ANY PERSON WILL SALE SHARES WORTH CRORES FOR A PALTRY SUM OF RS. 10,000- EXCEPT FOR STOPPING FURTHER LOSS. IN THE PRESENT CASE, FURTHER LOSS CAN BE MAXIMUM RS. 10,000/- BEING THE SALE PROCEEDS SAID TO HAVE BEEN REALIZED AND TO STOP THIS SMALL AND NEGLIGIBLE LOSS, NO NORMAL PERSON WILL SALE SHARES HAVING FACE VALUE OF RS. 3 CRORES AND STATED COST OF RS. 740,24,974/- FOR RS. 10,000/- WHICH IS MERELY ABOUT 0.3% OF THE FACE VALUE OF THE SHARES SOLD. HENCE THE SALE ITSELF IS NOT BEYOND DOUBT. BUT THE APPELLANT CANNOT BE WORSE OF AT THE TRIBUNAL AND HENCE, WE CANNOT REDUCE THE AMOUNT OF LOSS ALLOWED BY THE AO BUT IN VIEW OF ABOVE DISCUSSION, WE DECLINE TO INTERFERE IN THE ORDER OF CIT (A). 3. FROM THE ABOVE PARA REPRODUCED FROM THE TRIBUNAL ORDER, IT IS SEEN THAT THIS FACT IS VERY MUCH NOTED AND DISCUSSED BY THE TRIBUNAL THAT MD OF THE CONCERNED COMPANY IN THE STATEMENT RECORDED ON 05.03.2015 HAS STATED THAT THE SHARES ARE ALLOTTED @ RS.10/- PER SHARE AND THE NET WORTH OF THE COMPANY WAS IN NEGATIVE WHEN THE ASSESSEE PURCHASED THE SHARES . THE TRIBUNAL HAS NOTED THIS ASPECT ALSO THAT BOTH THE AO AND CIT(A) HAS GIVEN SEVERAL REASONS FOR REJECTING THE CLAIM OF THE ASSESSEE ABOUT PAYMENT OF SHARE PREMIUM. IT IS ALSO STATED BY THE TRIBUNAL IN THE SAME PARA THAT IN THE OPINION OF THE TRIBUNAL AND IN THE LIGHT OF MP NO. 105/BANG/2020 (IN ITA NO.1254/BANG/2017) PAGE 4 OF 5 VARIOUS FACTS AND REASONS NOTED BY BOTH THE LOWER AUTHORITIES WHICH COULD NOT BE CONTROVERTED BY THE LEARNED AR OF THE ASSESSEE, NO INTERFERENCE IS CALLED FOR. HENCE, IT IS SEEN THAT THE PRIMARY DECISION OF THE TRIBUNAL IS ON THE SAME BASIS ON WHICH CLAIM OF THE ASSESSEE WAS REJECTED BY THE LOWER AUTHORITIES. AFTER HOLDING SO, THE TRIBUNAL HAS PROCEEDED FURTHER TO DEAL WITH THIS ARGUMENT OF THE LEARNED AR OF THE ASSESSEE THAT THE SALE OF SHARES BY THE ASSESSEE FOR A PARTLY SUM OF RS.10,000/- AS AGAINST THE COST OF ACQUISITION OF RS.300 LAKHS WAS FOR THIS REASON THAT THE ASSESSEE WANTED TO STOP LOSS AND ON THIS ASPECT ALSO, THE TRIBUNAL HELD THAT THE SALE ITSELF IS NOT BEYOND DOUBT BUT EVEN AFTER OBSERVING THIS, THE TRIBUNAL OBSERVED THAT THE ASSESSEE CANNOT BE WORSE OF AT THE TRIBUNAL AND HENCE, THE TRIBUNAL CANNOT REDUCE THE AMOUNT OF LOSS ALLOWED BY THE AO. HENCE IT IS SEEN THAT THIS IS NOT THE BASIS OF THE TRIBUNAL ORDER IN THE PRESENT CASE THAT THE SALE IS IN DOUBT. THE PRIMARY BASIS OF THE TRIBUNAL ORDER IS THIS THAT IN THE LIGHT OF VARIOUS FACTS AND REASONS NOTED BY BOTH THE LOWER AUTHORITIES WHICH COULD NOT BE CONTROVERTED BY THE LEARNED AR OF THE ASSESSEE, NO INTERFERENCE IS CALLED FOR IN THE ORDER OF CIT(A). IN VIEW OF THESE FACTS, WE FIND NO APPARENT MISTAKE IN THE IMPUGNED TRIBUNAL ORDER. MP NO. 105/BANG/2020 (IN ITA NO.1254/BANG/2017) PAGE 5 OF 5 4. IN THE RESULT, MISCELLANEOUS PETITION OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- SD/- ( N. V. VASUDEVAN ) VICE PRESIDENT (A. K. GARODIA) ACCOUNTANT MEMBER PLACE : BANGALORE DATED : 09/11/2020 /NS/* COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A)-II BANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL BANGALORE