2018 (9) TMI 1177 - HC - Income Tax

Allowability of share loss - genuineness of claim - assessment u/s 158BD/158BC - Held that - It appears that the share loss and the whole transactions were supported by contract notes, bills and were carried out through recognized stockbroker of the Calcutta Stock Exchange and all the payments made to the stockbroker and all the payments received from stockbroker through account payee instruments, which were also filed in accordance with the assessment. It appears from the facts and materials placed before the Tribunal and after examining the same the Tribunal came to the conclusion and allowed the appeal filed by the assessee. In doing so, the Tribunal held that the transaction fully supported by the documentary evidences could not be brushed aside on suspicion and surmises. However, it was held that the transactions of share are genuine. Therefore, we do not find that there is any reason to hold that there is any substantial question of law involved in this matter. Deplicate

Summary

Issues: Condonation of delay in filing appeal, assessment proceedings under Income Tax Act, authenticity of share transactions, Tribunal's decision on appeal.

Condonation of Delay in Filing Appeal:
The High Court of Calcutta, in the judgment, expressed satisfaction with the grounds presented in the petition for condonation of delay in filing the appeal. Consequently, the delay was condoned, and the application (GA No.2589 of 2008) was allowed, leading to its disposal.

Assessment Proceedings under Income Tax Act:
The case involved a search and seizure operation at the office premises of a company, during which certain documents were found and seized. Subsequently, assessment proceedings were initiated under sections 158BD/158BC[c]/143[3] of the Income Tax Act. The Assessing Officer relied on a statement made by an individual during the search, disregarding later contradictory statements made under cross-examination. The first appellate authority upheld the AO's decision, leading the assessee to file an appeal before the High Court.

Authenticity of Share Transactions:
The Tribunal extensively examined the facts and materials related to the share transactions in question. It was noted that the transactions were supported by contract notes, bills, and were conducted through a recognized stockbroker of the Calcutta Stock Exchange. All payments to and from the stockbroker were made through account payee instruments, which were duly filed during the assessment proceedings. After thorough examination, the Tribunal concluded that the transactions were genuine, supported by documentary evidence, and could not be dismissed based on suspicion or conjecture.

Tribunal's Decision on Appeal:
Upon reviewing the facts and materials, the Tribunal allowed the appeal filed by the assessee, emphasizing that the transactions were fully supported by documentary evidence and should not be doubted without valid reason. The Tribunal specifically stated that the share transactions were genuine. Consequently, the High Court found no substantial question of law involved in the matter and dismissed the appeal (ITA No.620 of 2008).

In conclusion, the High Court's judgment addressed the issues of delay in filing the appeal, the authenticity of share transactions supported by documentary evidence, and the Tribunal's decision on the appeal based on a thorough examination of the facts and materials presented.