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TMI Blog2019 (5) TMI 357X X X X Extracts X X X X X X X X Extracts X X X X ..... d strong prima-facie opinion that this is a case of contrived loss. In other words, the loss as claimed by the Petitioner for set off, is not genuine. We do not think that the Petitioner can avoid recovery of tax by offering to pay a mere 20% of the disputed amount. At the same time, recovering entire tax pending appeal would also be harsh. The CBDT circular dated 31/07/2017 gives sufficient discretion to the departmental authorities to govern the situation pending appeal. Nevertheless, such discretion cannot be exercised in an unjust manner. Considering the facts and circumstances of the case, on one hand looking to the strong prima-facie case against the Petitioner and on the other hand the fact that the Petitioner's first appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner had filed return of income declaring total income of ₹ 13.03 Crores (rounded of). In such return, the Petitioner had claimed right off of loss of ₹ 22.28 Crores (rounded of) which was recoverable from one M/s. N. S. Broking Pvt. Ltd., a share-broker through whom the Petitioner had executed certain sale and purchase transactions. The Assessing Officer passed order of assessment under Section 143(3) of the Income Tax Act, 1961 on 29/1/2018 rejecting the claim of set off. This gave rise to tax demand of ₹ 10.35 Crores (rounded of). 4. The Petitioner has filed appeal against the order of assessment. Pending such appeal, he applied to the departmental authorities for stay against the recovery of the tax dues. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in this company as on date. (ii) Mr. Bharat Patel had incurred a reversal loss of ₹ 2.17 cr in his transactions with N. M. Impex Pvt. Ltd. on March 5, 2015. It is also noted that Equitable Financial Consultancy Services Pvt. Ltd., the company in which he holds directorship position, has received funds amounting to ₹ 2.40 crores from N. M. Impex Pvt. Ltd. on 9th March, 2015. Therefore, the losses shown to have been incurred by Mr. Bharat Patel due to his reversal transactions with counterparty Sureshine Vintrade Pvt. Ltd. have been reverted to the account of Equitable Financial Consultancy Services Pvt. Ltd. (iii) Mr. Bharat Pate had incurred a reversal loss of ₹ 8.83 crore in his transactions with S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m has been used to generate fictitious losses arising out of fictitious reversal trades. I note, from the material available on record that the Noticees have not produced significant arguments / submission or documents to migrate the allegations mentioned in the interim order. Thus, the findings in the interim order against Noticees cannot be modified or revoked at this stage. 6. In view of such prima-facie material on record, we do not think that the Petitioner can avoid recovery of tax by offering to pay a mere 20% of the disputed amount. At the same time, recovering entire tax pending appeal would also be harsh. The CBDT circular dated 31/07/2017 gives sufficient discretion to the departmental authorities to govern the situa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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