2017 (6) TMI 406 - HC - Income Tax

Unaccounted share purchase - Held that - Revenue has been unable to show that the factual finding of the ITAT that the shareholders register maintained by ICPL as well as the returns filed by it with the Registrar of Companies showed that the shares were in fact transferred to WDPL and not to any of the individual Assessees is perverse. The Court, therefore, declines to frame any substantial question of law on this issue. Unaccounted receipt from contractors - Held that - In the statement recorded under Section 132(4) Assessee pointed out that this was not an amount paid to him in his individual capacity but the company of which he was Director and which is a separately assessed. The CIT (A) held that was no document had been placed on record by the AO to show that the said sum was in fact received by the Assessee. This factual finding has been affirmed by the ITAT. Since there are concurrent findings of facts against the Revenue and in favour of the Assessee, the Court is not inclined to frame any substantial question of law in this regard. Unexplained payment in cash as a result of the family settlement - Held that - Here again, the ITAT has deleted the additions on account of the cheques not having been encashed and the shares not being transferred. Therefore, no substantial question of law arises from this issue as well

Summary

Issues:
1. Common question in appeals by Revenue against a common order for Assessment Year 2011-12.
2. Additions made by Assessing Officer regarding 'unaccounted share purchase'.
3. Allegations of unaccounted share purchase by individual Assessees.
4. Documents showing shares purchased by M/s Integrated Caps Pvt. Ltd. (ICPL) and M/s Windsor Durobuild Pvt. Ltd (WDPL).
5. ITAT's findings on shares transferred to WDPL, not individual Assessees.
6. Revenue's inability to challenge ITAT's factual findings.
7. Issues related to Mr. S.K. Jaipuria's income additions based on seized document Annexure-A9.
8. CIT(A) and ITAT's findings against Revenue on income additions.
9. Alleged unexplained payment in cash due to family settlement among Mr. Chander Kant Jaipuria, Mr. Surya Kant Jaipuria, and R.K. Jaipuria.

Analysis:
The High Court dealt with appeals by the Revenue against a common order for Assessment Year 2011-12. The central issue revolved around the Assessing Officer's additions concerning 'unaccounted share purchase'. The Revenue claimed that shares of ICPL were bought by individual Assessees at ?0.01 per share, supported by documents indicating WDPL as the purchaser. However, these documents were not examined by the AO or CIT (A). The ITAT found that shares were transferred to WDPL, not individual Assessees, and the Revenue failed to challenge this finding, leading the Court to reject framing any substantial question of law on this matter.

Regarding Mr. S.K. Jaipuria, income additions based on Annexure-A9 seized from his premises were disputed. The AO alleged receipt of ?7.50 lakhs from a contractor, seeking to add ?34.75 lakhs to Mr. Jaipuria's income. However, the CIT(A) and ITAT ruled against the Revenue, stating no evidence proved the sum was received by Mr. Jaipuria individually. As there were concurrent factual findings favoring Mr. Jaipuria, the Court declined to address any substantial legal question here.

The third issue involved an alleged unexplained cash payment due to a family settlement among Mr. Chander Kant Jaipuria, Mr. Surya Kant Jaipuria, and R.K. Jaipuria. The ITAT dismissed the additions as cheques were not encashed and shares were not transferred. Consequently, no substantial legal question arose from this issue, leading to the dismissal of the appeals.