The High Court disposed of an income tax appeal filed under Section 260A. The court held that no substantial question of law was involved as the ITAT's order relied on concurrent findings and relevant documentary evidence.
The appeal filed under Section 260A of the Income Tax Act was dismissed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR
D.B. Income Tax Appeal No. 13/2020
Principal Commissioner Of Income Tax-I, New Central Revenue Building, Statue Circle, Jaipur (Raj)
Versus
Shri Gaurav Bagaria, 100-101, Hari Nagar, CBI Colony, Jagatpura, Jaipur
----Respondent
For Appellant(s) : Mr. Anuroop Singhi, Adv.
HON'BLE MR. JUSTICE PRAKASH GUPTA HON'BLE MR. JUSTICE SAMEER JAIN
Order
09/05/2022
Present appeal is filed under Section 260A of the Income Tax Act, 1961 against the order dated 10.07.2019 passed by the Division Bench of the Income Tax Appellate Tribunal (for short “ITAT”), Jaipur Bench, Jaipur in ITA No. 550/JP/2019 for assessment year 2014-15.
By the present IT appeal substantial question of law
proposed:-
“I) Whether on the facts and in the circumstances of the case, the Learned ITAT was justified in deleting the addition of Rs. 7593444/- made on account of unexplained credit u/s 68 of the Act when the assessee was unable to justify equity trading by picking the shares of specific companies with poor net worth?
II) Whether on the facts and in the circumstances of the case, the Learned ITAT, Jaipur was justified in deleting the addition of Rs. 7593444/- by holding the transaction as genuine because transaction is through
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[ITA-13/2020]
Stock Exchange and payment is by cheque, completely ignoring the cact that such masquerade is used methodically to provide accommodation entries in order to show the sham transaction as genuine?
III) Whether on the facts and in the circumstances of the case, the Learned ITAT, Jaipur was justified in deleting the addition of Rs. 151869/- being commission paid to acquire such accommodation entry?
IV) Whether on the facts and in the circumstances of the case, the Learned ITAT, Jaipur was justified in rejecting the Revenue's apeal without considering the case on merit where the additions were made by the AO on the basis of corroborative information received from Investigation Wing, Kolkata given that the case fails under exception as per para 10(e) of CBDT circular no. 03/2018 dated 20-08-2018?”
It is submitted by the learned counsel for the Revenue that even though the amending tax involved in the matter is below the prescribed monetary limit, but the case falls under the exceptions laid down in Circular No. 23/2019 dated 06.09.2019.
On perusal of the record of the appeal, submissions made by the revenue counsel and on consideration of relied upon judgments, this court is of the view that in the instant matter there is concurrent findings arrived at by the CIT appeals, learned ITAT in terms of the order dated 03.01.2019 and 10.07.2019.
On perusal of findings arrived at by the learned ITAT, reproduce as under:-
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[ITA-13/2020]
Tribunal has also followed the decision of Hon’ble Jurisdictional High Court in case of CIT vs. Smt. Pooja Agarwal (supra) wherein the Hon’ble High Court has also upheld the finding of the ld. CIT (A) and this Tribunal when the assessee produced all the relevant details and evidence in support of the transaction of purchase and sale of shares. Accordingly, in view of the facts and circumstances as discussed above, when the assessee has produced all the relevant documentary evidences to establish the genuineness of the transaction and there is no contrary evidence to doubt the correctness of the evidences produced by the assessee then treating the transaction of purchase and sale as sham by the AO is not justified. The assessee has also produced the financial statements of M/s. Kailash Auto Finance Ltd. to show that the company has earned a handsome profit. Further, the alleged SEBI order was also subsequently revoked. Therefore, all these facts established the genuineness of the transaction. Hence we do not find any error or illegality in the order of the ld. CIT (A) in deleting the addition made by the AO under section 68 of the IT Act by treating the Long Term Capital Gain on sale of shares as unexplained cash credit. The addition of Rs. 1,51,869/- being the deemed commission for taking the accommodation entry, is consequential to the main issue. Hence, the same is also not sustainable.”
we are of the view that the present appeal does not involve any substantial question of law. Learned ITAT has specifically held that the assessee has produced all the relevant documentary evidence to establish genuineness of the transaction and there is no contrary evidence to doubt the correctness of the evidences produced by the assessee and therefore treating the transaction of purchase and sale as sham is not justified. Further, learned ITAT has also relied upon the decision of the jurisdictional High Court reported in 2018 (99) taxmann.com 451 (Raj.) titled as Commissioner of Income Tax, Jaipur Vs. Smt. Pooja Agarwal, wherein learned ITAT has relied upon the judgment of Division Bench involving the same facts wherein the Division Bench has dismissed the appeal filed by the Revenue.
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In the light of above facts, this Court is of the view that the order of learned ITAT requires no interference and therefore, the appeal is dismissed.
(SAMEER JAIN),J
(PRAKASH GUPTA),J
Pooja/24
3 issues framed by the court
Whether the ITAT was justified in deleting addition under section 68 due to lack of contrary evidence despite inability to justify equity trading via poor net worth companies.
Whether the transaction through Stock Exchange and cheque payment was genuine and not masquerading as an accommodation entry.
Whether the substantial question of law is involved given concurrent findings by lower authorities.
Colour shows how this judgement treated each authority
Commissioner of Income Tax, Jaipur Vs. Smt. Pooja AgarwalReferred¶28
2018 (99) taxmann.com 451 (Raj.)
2 provisions across 1 enactments
Principal Commissioner Of Income Tax-I
Shri Gaurav Bagaria
Prakash Gupta
Sameer Jain
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
