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TMI Blog2019 (7) TMI 936X X X X Extracts X X X X X X X X Extracts X X X X ..... arising out of I.T.(SS)A. No. 39/KOL/2018] - - - Dated:- 17-7-2019 - Shri P.M. Jagtap, Vice-President (KZ) And Shri A.T. Varkey, Judicial Member For the Assessee : Shri R.Choudhury, A.R. For the Department : Shri Radhey Shyam. CIT, D.R. ORDER PER SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ):- This appeal is preferred by the Revenue against the order of ld. Commissioner of Income Tax (Appeals)-21, Kolkata dated 16.02.2018 and the same is being disposed of along with the Cross Objection filed by the assessee being C.O. No. 75/KOL/2018. 2. The assessee in the present case is a Non-Banking Finance Company, which filed its return of income for the year under consideration regularly on 25.09.2009 declaring total income of ₹ 8,04,560/-. In the assessment originally completed under section 143(3) vide an order dated 07.09.2011, the total income of the assessee was determined by the Assessing Officer at ₹ 1,28,40,560/- after making two additions of ₹ 1,05,36,000/- and ₹ 15,00,000/- on account of expenditure on purchase of shares and Keyman Insurance resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Grounds raised by the Revenue in its appeal read as under:- (1) The ld. CIT(A) erred in law as well as on facts in deleting the disallowance of ₹ 15,02,247/- on account of payment made for Keymans Insurance Policy for the Directors, without appreciating the fact that the person for whom the policy was taken is not a key person of the company and is only an authorized signatory. (2) The ld. CIT(A) erred in law as well as on facts in deleting the disallowance of ₹ 1,05,36,000/- incurred in relation to purchase of shares without appreciating the fact that the purchase of shares were not on the contract date being 29.08.2008 as alleged by the assessee, and the sale consideration was received by M/s. Puskar Banijya only as late as on 17.03.2009, and the shares were transferred to de mat account immediately thereafter on 20.03.2009, and that the loss incurred thereon is not adjustable with income as laid down in the decision of Hon ble Supreme Court in the case of Maddi Venkataraman Co. Pvt. Ltd. reported in 229 ITR 534 (SC) . 5. Grounds raised by the assessee in its Cross Objection read as under:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n judicial consistency since the issues relating to the said additions made in the assessment originally completed under section 143(3) were pending before the Tribunal in the appeal filed by the Department. Against the order passed by the Assessing Officer under section 153A/143(3), an appeal was preferred by the assessee before the ld. CIT(Appeals) disputing the said two additions and before the said appeal could be heard by the ld. CIT(Appeals), the appeal filed by the Department against the order of the ld. CIT(Appeals) deleting the similar additions made in the assessment originally completed under section 143(3) came to be disposed of by the Tribunal and the relief allowed by the ld. CIT(Appeals) on these two issues was upheld by the Tribunal vide its order dated 03.08.2016 passed in ITA No. 1429/KOL/2012 for the following reasons given in page nos. 10 11 as well as on page nos. 16 to 19 of the impugned order of the ld. CIT(Appeals):- From page nos. 10 11 11. We have heard rival contentions and perused the materials available on record. We find that AO disallowed the payment of KIP premium on the ground that the directors of asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase stock of share was very much available in the demat account of MPB as evidenced in the demat account of MPB which is placed on page 45 of the paper book, We also find that a notice was issued to MPB u/s 133(6) of the Act for confirming the aforesaid transactions in its books of account, We find that MPB has duly reflected the transactions with the assessee in its books of account and in support of its claim, the balance-sheet along with other documents and bank e/c are placed on pages 42 to 64 of the paper book, We further find that aforesaid shares were sold subsequently in the financial year 2009-10 and the details of the same is placed on pages 68 to 81 of the paper book, We also find that in the similar facts, co-ordinate Bench decided the same issue in favour of assessee in ITA No, 1595/Kol/2012 dated 30-01-2015 in the case of ITO v, Kiran Consortium Trade CP) Ltd, The relevant extract is reproduced below:- 5. We have heard rival contentions and gone through facts and circumstances of the case. We find from the facts that the assessee purchased these shares from Beejay Investments and Financial Consultants P. Ltd (in short BIFC) and consequently, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 132 of the Act. It was found that large number of shares were traded between the Company and the said group of persons at off-market transactions. Such off market transactions were entered by the company with other unrelated assesses also. The assessing officer carried a belief that such transactions were not genuine, in the sense that the same would have taken place with anterior dates in the opinion of the assessing officer, this was done to contrive loss in the hands of some of the assessee who in turn transferring the profits in the hands of other assessees. This was done to ensure that the assessees who had sizable profits from sale of shares could claim such losses as set off. The assessing officer questioned the assessee company in detail. The assessing officer in the order of assessment formed a belief that full details were not made available with respect to such transactions. The sales were not at market price. The amounts were not paid, but only account entries were made. The shares were also not transferred in the name of the purchasers. On such basis, the assessing officer concluded that the transactions were not genuine and applying t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee-company found to be treated in off market share transactions with its related group of persons as well as with unrelated groups of persons. AO disallowed losses on impugned transactions on the ground that transactions were not genuine as assessee carried off market transactions by simple purchase bills or sales bills ignoring market rates. This was done to avoid tax. Moreover neither any amount was paid nor any shares were transferred in the name of purchasers, only account entries were made. Held-:Necessary entries were made in the account books of both sides, i.e, purchaser and seller and delivery receipts were also passed demonstrating contemporaneous sale and purchase of the shares. It was not even the case of the Revenue that such off market transactions were not permissible. When off market transactions were permitted in law, and there was no evidence to suggest that artificially they were sold at rates lower than the prevailing market rates and AO could not bring on record any material to show that the transactions were not genuine, the findings of CIT(A) as well as Tribunal that impugned transactions were genuine, called for no interference. From ..... X X X X Extracts X X X X X X X X Extracts X X X X
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