2011 (6) TMI 742 - HC - Income Tax

Summary

Issues involved: Assessment under Section 143(1), Addition under Section 68, Addition under Section 69B, Admissibility of evidence under Rule 46A, Interpretation of Section 50C.

Assessment under Section 143(1): The assessee declared income for the assessment year 2005-06, which was later scrutinized by the Assessing Officer resulting in an addition under Section 68 of the Income Tax Act. The CIT(Appeals) partly allowed the appeal, but the Income Tax Appellate Tribunal deleted the entire addition made by the Assessing Officer. The Tribunal found that the shares were duly purchased, evidenced by the broker's notes, and paid for using Account Payee Cheques. The Tribunal also noted that the shares were routed through a D-Mat Account and listed on the Calcutta Stock Exchange. The Tribunal emphasized that the Assessing Officer's addition was based on assumption and presumption, and the burden of proof had shifted to the Revenue to show that the shares were not received against consideration. The Tribunal concluded that the assessee had discharged its onus, and there was no infirmity in the Tribunal's decision.

Addition under Section 69B: The Assessing Officer made an addition under Section 69B for an unexplained investment in a property. The Tribunal, however, held that the provisions of Section 50C were not applicable to the purchaser. Citing relevant findings, the Tribunal emphasized that there was no ambiguity in Section 50C and no scope for applying it to the purchaser. Consequently, the Tribunal deleted the addition made under Section 69B.

Admissibility of evidence under Rule 46A: The Tribunal addressed the issue of admitting a confirmatory letter from a shares broker as evidence, which was contrary to the broker's earlier stand. The Tribunal found that the broker's notes and evidence presented by the assessee supported the legitimacy of the transactions, leading to the deletion of the addition under Section 68.

Interpretation of Section 50C: The Tribunal clarified that the provisions of Section 50C were not applicable to the purchaser, and the Appellate Authority had no right to alter the law unless there was scope for interpretation. As there was no ambiguity in Section 50C, the Tribunal deleted the addition made under Section 69C.

In conclusion, the Tribunal's decisions on all issues were found to be well-reasoned and legally sound, warranting no interference. The appeal was dismissed based on the Tribunal's thorough analysis and interpretation of the relevant legal provisions.