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II. Direct Tax Case laws:
1. CIT vs. N. Tarika Properties Investment
Pvt. Ltd., ITA No. 2080/2010, Date of Order : 28.11.2013, Delhi High Court
Whether
the order of the Tribunal ignoring
and nor dealing with the factual findings recorded by he assessing officer is
perverse?
Held
Yes
The
Tribunal has failed to take holistic view and has relied upon neutral and
general evidence in respect of share capital money received without noticing
other evidence, which are :
a)
The Respondent Assessee is a private
limited company.
b)
The subscribers were unknown persons, not related or friends.
c)
The subscribers bank account statements furnished were forged and fabricated.
d)
There were corresponding cash deposits in the bank accounts before issue of
share application cheques.
e)
The subscriber companies it has been shown were carrying on effective and day
to day
business
or were angle investors.
f)
The subscribers did not bother and ensure protection of their investment.
In
view of the above, we are of the view that the Assessee has not discharged the
onus satisfactorily and the additions made by the Assessing Officer was justified
and sustainable and the order of the Tribunal ignoring and nor
dealing with the factual findings recorded by the assessing officer is perverse.
(Please
click here to view the Judgment).
2. CIT vs. M/s Orient Instrument P. Ltd., ITA No. 112/2000, Date of Order : 20.11.2013, High Court of Delhi.
Whether loss from shares dealing cannot be deemed to be from “speculation”
under explanation to s. 73 if company is not engaged in the “business”
of shares dealing.
Held Yes
The assessee,
engaged in the business of trading of crafts paper etc claimed a loss of Rs.
5.53 lakhs arising on account of a transaction whereby it
purchased and sold shares. The AO held that under the Explanation to s. 73, the
said loss was deemed to be arising from a speculation business and could not be
set off against other business profits. However, the CIT(A) and Tribunal
allowed the assessee’s claim on the basis that the assessee was not engaged in
the “business of purchase and sale of shares” so as to fall into the
mischief of the Explanation to s. 73. The
Hon’ble Delhi High Court held that, The
assessee was engaged in the business of trading of crafts paper, installation,
job work, consultancy and commission. By all means, the transaction whereby it purchased the shares and incurred loss on account of the
fall in the value of the share was a solitary one. The findings of the Tribunal
that the transaction did not constitute the business carried on by the company,
cannot be termed as perverse or unreasonable.
(Please
click here to view the Judgment)
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