9911796707
TMI Blog2003 (4) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... ative, i.e., in favour of the Department and against the assessee. - - - - - Dated:- 29-4-2003 - Judge(s) : S. H. KAPADIA., J. P. DEVADHAR. JUDGMENT The judgment of the court was delivered by S.H. KAPADIA J.-The assessee is a finance company. It is a public limited company carrying on business of leasing, financing hire purchase, dealing in shares and other financial activities. We are concerned with the financial year ending March 31, 1991, relevant to the assessment year 1991-92 in this appeal preferred by the assessee. The assessee has acquired 1,00,000 equity shares of Rs. 10 each at par from the promoters' quota out of total capital consisting of 10,00,000 shares of ITC Agro-Tech Limited on May 13, 1988. The said shares wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ell the shares on March 18, 1991, when the procedure for listing was pending before the Calcutta Stock Exchange. That the shares obtained were from the promoters' quota and they were listed on the Calcutta Stock Exchange on June 10, 1991. Therefore, the Assessing Officer took the sale price at the rate of Rs. 54 per share and made an addition of Rs. 35.10 lakhs. This finding was confirmed by the Tribunal. Hence, the assessee has come by way of appeal under section 260A of the Income-tax Act. Question to be answered by the court: "Whether, on the facts and in the circumstances of the case and in law, addition of Rs. 35.10 lakhs, being the difference between the sale price of the shares in question at the rate of Rs. 18.90 per share on 18 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s or evidence suggest that the transaction was entered into as a device for tax evasion. In this connection, she relied upon the judgments of the Supreme Court and the High Court in various matters which lay down that even in cases of sale of quoted shares, the receipt of sale price cannot be ignored and that the assessee cannot be taxed on notional income unless the sale was held to be a sham transaction or a device for tax evasion. She contended that, in the present case, there is no such finding. She contended that, in the present case, the sale was a transaction at arm's length. That, there is no finding of fact recorded by the Assessing Officer in this case that the transaction was between interconnected parties. She contended that, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t recorded by the authorities below that the shares were obtained through the promoters' quota which had a lock-in period. There is a concurrent finding of fact recorded by the authorities below that the income which belonged to the assessee had been earned by some other person. In this connection, it is important to note that the sale took place through the contract note. When we read that sentence in the finding of the Tribunal, we inquired from the assessee as to why the sale had been effected in favour of the broker, Vinod Baid and Co. It is interesting to note that no particulars have been given by the assessee with regard to this particular sale. Who paid the consideration for the shares has also not been disclosed. If the shares were ..... X X X X Extracts X X X X X X X X Extracts X X X X
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