This income tax reference appeal challenged the ITAT's decision allowing exemption on bogus share transactions and deleting specific additions. The High Court found no substantial question of law as the ITAT ordered was reasoned and supported by evidence, dismissing the appeal.
Appeal dismissed as no substantial question of law arises.
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. 60/2021
Principal Commissioner Of Income-I, New Central Revenue Building, Statue Circle, Jaipur (Raj.)
----Appellant
Versus
Ajay Agarwal, 237, Shree Ramesharam, Sonkhiyon Ka Rasta, Kishanpole Bazar, Jaipur.
----Respondent
For Appellant(s) : Mr. Anuroop Singhi, Adv.
HON'BLE MR. JUSTICE PRAKASH GUPTA HON'BLE MR. JUSTICE SAMEER JAIN
Order
10/05/2022
Present appeal is filed under Section 260A of the Income Tax Act, 1961 (for short, ’the Act’) against the order dated 18.11.2020 passed by the Division Bench of the Income Tax Appellate Tribunal (for short “ITAT”), Jaipur Bench, Jaipur in ITA No. 123/JP/2020 for assessment year 2014-15, on following substantial questions of law:-
“I) Whether on the facts and in the circumstances of the case and in law the Learned ITAT is justified in allowing exemption of Rs. 11083850/- claimed by the assessee u/s 10(38) of the I.T. Act, 1961, which was disallowed by the A.O. on the basis of evidence received from investigation wing treating sale of shares of M/s Sunrise Asian Ltd., as bogus and thereby considering the same as income from other sources?
II) Whether on the facts and in the circumstances of the case and in law the Learned ITAT is justified in deleting the addition made by the A.O. on account of notional commission of Rs. 230757/-, which was paid
(2 of 4)
[ITA-60/2021]
for obtaining accommodation entry in form of exempted long term capital gain u/s 10(38)?
III) Whether on the facts and in the circumstances of the case and in law the Learned ITAT is justified in deleting the addition made by the A.O. on account of interest expenses of Rs. 1377391/- as the assessee failed to etablish the nexus that the interest bearing funds have been utilized in the partnership firms?”
(3 of 4)
[ITA-60/2021]
assessee and therefore the claim of manipulation and for treating the transaction in question is as sham and bogus were not proven and hence untenable.
Ors.:2017 (349) E.L.T 193 (SC), wherein the question of admission of an appeal, on substantial question of law was considered and it was held as under:-
“(i) The question raised must involve a substantial question of law which has not been answered or, on which, there is a conflict of decisions necessitating a resolution.
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[ITA-60/2021]
is a possible conclusion, the same must be allowed to rest even if this Court is inclined to take another view of the matter.
(iii) The Tribunal had acted in gross violation of the procedure or principles of natural justice occasioning a failure of justice.
Appeal No. 22/2021 titled as Pr. Commissioner of Income Tax, Jaipur-2, Jaipur Vs. Shri Sanjay Chhabra , in the similar facts and circumstances has already taken a view that in the appeal at hand under Section 260A of the Act no substantial question of law arises.
(SAMEER JAIN),J
(PRAKASH GUPTA),J
Pooja /16
3 issues framed by the court
Whether the ITAT was justified in allowing exemption under Section 10(38) for shares of M/s Sunrise Asian Ltd. treated as bogus by the AO.
Whether the ITAT was justified in deleting additions for notional commission and interest expenses.
Whether a substantial question of law arises in this appeal under Section 260A of the Income Tax Act, 1961.
Colour shows how this judgement treated each authority
Suman Poddar Vs. ITODistinguished¶23
Suman Poddar Vs. ITO: 112 taxmann.com 329 (Delhi)
Commissioner of Income Tax, Jaipur Vs. Smit Pooja AgarwalReferred¶24
Commissioner of Income Tax, Jaipur Vs. Smit Pooja Agarwal: 2018 (99) taxmann.com 451 (Raj.)
Steel Authority of India Ltd. Vs. Designated AuthorityFollowed¶26
Steel Authority of India Ltd. Vs. Designated Authority, Directorate General of Anit Dumping & Allied Duties and Ors.:2017 (349) E.L.T 193 (SC)
Pr. Commissioner of Income Tax, Jaipur-2 vs. Shri Sanjay ChhabraReferred¶34
D. B. IT Appeal No. 22/2021 titled as Pr. Commissioner of Income Tax, Jaipur-2, Jaipur Vs. Shri Sanjay Chhabra
2 provisions across 1 enactments
Principal Commissioner Of Income-I
Ajay Agarwal
Prakash Gupta
Sameer Jain
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
