2017 (3) TMI 1058 - HC - Income Tax

Sale proceeds of shares of Karuna Cables - income from other sources OR STCG shown by the assessee - ITAT deleted addition - Held that - Tribunal after recording the facts particularly the remand report of the Assessing Officer accepting the claim of the respondent-assesesee found no reason to upset the order passed by the CIT(A). Thus the impugned order of the Tribunal has also on facts found that the sale proceeds received on sale of KCL shares to be genuine. In view of the concurrent finding of facts by the CIT(A) and the Tribunal, the question of law as proposed does not give rise to any substantial question of law

Summary

Issues:
1. Challenge to order of Income Tax Appellate Tribunal regarding Assessment Year 2005-06.
2. Dispute over the nature of receipt of ?1.48 crores - genuine sale proceeds or undisclosed income.
3. Appeal against deletion of addition as income from other sources by Commissioner of Income Tax (Appeals).
4. Tribunal's decision based on facts and acceptance of claim by respondent assessee.

Analysis:
1. The appeal challenges the order of the Income Tax Appellate Tribunal (Tribunal) for Assessment Year 2005-06. The main question raised is whether the Tribunal was justified in confirming the deletion of ?1.48 crores made by the Assessing Officer on the sale proceeds of shares of Karuna Cables as income from other sources, instead of Short Term Capital Gain shown by the assessee through a potentially bogus transaction to generate artificial gains.

2. The core dispute revolves around whether the receipt of ?1.48 crores represents genuine sale proceeds of shares of Karuna Cables Ltd. or undisclosed income of the respondent-assessee. The respondent-assessee submitted additional evidence in the form of affidavits before the Commissioner of Income Tax (Appeals), leading to a remand report from the Assessing Officer who accepted the contention that the sale proceeds were genuinely from the sale of shares of KCL. Consequently, the CIT(A) deleted the addition as income from undisclosed sources and recognized it as short term capital gain.

3. The Revenue, dissatisfied with the CIT(A)'s decision, appealed to the Tribunal. However, the Tribunal, after considering the facts and the remand report accepting the respondent-assessee's claim, upheld the CIT(A)'s order. The Tribunal found no reason to overturn the CIT(A)'s decision, concluding that the sale proceeds from the shares of KCL were genuine.

4. Given the consistent factual findings of both the CIT(A) and the Tribunal, the proposed question of law was deemed not to present any substantial issue warranting consideration, as it was not shown to be erroneous. Consequently, the appeal was dismissed, with no order as to costs.