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2025 (2) TMI 454 - HC - Income TaxBogus purchases - purchase as well as the sale of shares was a colorable device adopted by the Assessee in order to avoid tax - HELD THAT - The three authorities have considered the submissions and have arrived at the conclusion of the transfer being colourable device to avoid tax. This Court cannot reconsider the said findings of facts which are based upon the records filed before the authorities. In light of the concurrent findings of fact by all the three authorities in our view whether the transaction is a colourable device to avoid tax does not raise any substantial question of law but is purely a finding of fact which has been arrived at concurrently by the three authorities. The evidence on record backs this crucial finding. Adequacy of evidence is usually not examined in such appeals dealing with substantial questions of law. In any case this is also not a matter where the evidence could be said to be inadequate. Belated contention that even without the colourable device the assessee could have advanced a loan and claimed deductions is purely hypothetical. The effect of such a course cannot be envisioned. Such an issue does not arise. In any case findings of fact that are backed by the material on record cannot be interfered based on such a contention. Appeal dismiised.
ISSUES PRESENTED and CONSIDERED:
- Whether the Tribunal was right in passing an order after more than 10 months of concluding the hearing? - Whether the Tribunal was right in law in dismissing the appeal without considering/dealing with any of arguments urged by the Appellant? - Whether the Tribunal was right in law in holding that the purchase as well as the sale of shares of Trends Pharma Pvt. Ltd., was a colorable device adopted by the Assessee in order to avoid tax? ISSUE-WISE DETAILED ANALYSIS: Issue (a): Timeliness of Tribunal's Order- No detailed analysis provided in the judgment. Issue (b): Tribunal's Consideration of Appellant's Arguments- Relevant legal framework and precedents: Section 260-A of the Income-tax Act.- Court's interpretation and reasoning: The assessing officer, Commissioner (Appeals), and Tribunal all considered and evaluated the appellant's submissions before concluding that the transaction was a sham.- Key evidence and findings: The assessing officer observed the transaction as a tax avoidance measure, leading to the disallowance of short-term capital loss.- Application of law to facts: The authorities analyzed the transaction details and concluded it was a sham to evade taxes.- Treatment of competing arguments: Appellant argued that the transaction was valid, but the authorities found it to be a colorable device.- Conclusions: The Court found that all three authorities had considered the appellant's arguments, and no substantial question of law arose from this issue. Issue (c): Colorable Device to Avoid Tax- Relevant legal framework and precedents: Income-tax Act provisions on tax avoidance.- Court's interpretation and reasoning: The Tribunal, as a final fact-finding authority, determined the transaction as a colorable device to avoid tax.- Key evidence and findings: All authorities concluded that the transaction was a sham to generate losses and avoid tax.- Application of law to facts: The Court upheld the findings of the authorities based on the evidence presented.- Treatment of competing arguments: Appellant's contention on alternative scenarios was deemed hypothetical.- Conclusions: The Court dismissed the appeal as no substantial question of law was found in the determination that the transaction was a colorable device to avoid tax. SIGNIFICANT HOLDINGS: - The Court found that all three authorities had considered the appellant's arguments, and no substantial question of law arose from the issue of the Tribunal's consideration of the appellant's arguments. - The Court upheld the finding that the transaction of buying and selling shares was a colorable device adopted by the appellant to avoid tax, based on the evidence and concurrent findings of the authorities. - The Court dismissed the appeal as it did not raise any substantial question of law based on the findings that the transaction was a colorable device to avoid tax.
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