2024 (6) TMI 1068 - HC - Income Tax

Validity of appeal filed u/s 260A - Bogus LTCG - whether any substantial question of law has arisen for consideration? - reexamining appellant's additional documents obtained through the Right to Information Act - as argued Tribunal has failed to consider the report of the Securitisation and Exchange Board of India in its proper perspective HELD THAT - CIT(A) brought out the modus operandi and has recorded finding as to how the claim for long-term capital gain is a bogus claim. The conclusion arrived at by the Tribunal has also been supported by various decisions of the courts including of this Court in the case of Swati Bajaj 2022 (6) TMI 670 - CALCUTTA HIGH COURT As the appellant would strenuously contend that certain documents were not available with the assessee at the relevant point of time and subsequently on being advised, applications were made under the Right to Information Act and information was sought for from several people and documents have been obtained which have been enclosed in the stay petition - As submitted by the appellant that these documents should be permitted to be placed before the learned Tribunal or before the CIT(A) so that the factual aspects can be re-examined and a correct conclusion can be arrived at. Unfortunately, such exercise cannot be done by this Court in an appeal filed u/s 260A of the Act. Be that as it may, the reliance placed on the order passed by the adjudicating authority of the Securities and Exchange Board of India (SEBI) is thoroughly misplaced since the said order does not examine the specific transaction done by the assessee with respect to the shares of Sulabh Engineers Services Ltd. Therefore, placing reliance on the said order passed by the SEBI in no manner, improve the case of the assessee. Be it noted that this Court exercising jurisdiction under Section 260A of the Act is required to consider as to whether any substantial question of law has arisen for consideration and this Court cannot be converted into an appellate Tribunal to examine the factual issue which was never placed by the assessee before the Assessing Officer or before the CIT(A) or before the Tribunal. No grounds to interfere with the order passed by the Tribunal and as we find no substantial question of law arises for consideration, the appeal is dismissed.

Summary

Issues:
1. Justification of Tribunal's decision regarding binding precedent and applicability of previous decisions.
2. Consideration of factual differences in the present case compared to previous judgments.
3. Evaluation of SEBI report and its impact on the case.

Analysis:
1. The appellant raised substantial questions of law challenging the Tribunal's decision to uphold the order passed by CIT(A) based on the absence of binding precedents in favor of the appellant. The Tribunal referred to previous decisions like Shyam Sunder Bajaj and Swati Bajaj to support its ruling for the assessment year 2015-16. The appellant contested this justification, questioning the legal validity of the Tribunal's decision.

2. Another issue raised was the alleged failure of the Tribunal to recognize the factual distinctions between the present case and previous judgments, specifically mentioning the case of Bajaj and others. The appellant argued that the circumstances in Swati Bajaj, involving off-market transactions, were not applicable to the current scenario. This discrepancy in factual analysis formed a crucial point of contention in the appeal.

3. The evaluation of the SEBI report played a significant role in the case. The appellant emphasized that the report did not implicate them directly and supported their claim of being a mere investor without involvement in colluding activities with entry operators. However, the Court dismissed the relevance of the SEBI report, stating that it did not specifically address the transactions related to the shares in question. This dismissal impacted the overall assessment of the case.

In the final judgment, the Court thoroughly examined the arguments presented by both parties. Despite the appellant's efforts to introduce additional documents obtained through the Right to Information Act, the Court highlighted its limited scope in re-examining factual aspects in appeals under Section 260A of the Income Tax Act. The Court emphasized that its role was not to act as an appellate tribunal to reassess factual issues not previously raised before the relevant authorities. Consequently, as no substantial question of law was found to warrant interference, the Court dismissed the appeal. Additionally, the Court also rejected the stay application filed by the appellant.