Case Law Details
Radhika Roy Vs DCIT (ITAT Delhi)
Conclusion: Enhancement of assessee’s income on account of difference between the purchase price of the shares of NDTV limited at Rs 4 per share and the market price of those shares quoted on recognized stock exchange at Rs. 140 per share was a benefit taxable u/s 56 (2)( vii) as assessee could not justify that there was no motive of tax evasion in the same.
Held: Assessee had purchased shares of NDTV limited at the rate of Rs 4/- per share from M/S RRPR Holdings private limited whereas the market price of the share was INR 140/- per share at National stock exchange and Bombay stock exchange. Therefore, AO made an addition to the income of the assessee under section 69/69B of INR 136/– per share to the number of shares sold. CIT – A analysed the addition made by AO and noted that the provisions of section 56 (2)( vii) enables the taxation of such a scenario on deemed basis. He thus confirmed the addition under section 56 (2)( vii) . It was held as assessee has failed to explain by credible evidence any reason of buying the shares of the above company at Rs. 4/- per share when the quoted price of the share on the recognized stock exchange is INR 140/– per share. As the motive itself of assessee was not demonstrated at all with credible evidences, assessee could not say that there was no motive of tax evasion. Even otherwise the provisions of section 56 (2) deems certain differences/receipts of the transaction as income. There was no infirmity in the order of CIT – A in enhancing the income of the assessee by invoking the provisions of section 56 (2)(vii) on account of difference between the purchase price of the shares of NDTV limited and the market price of those shares quoted on recognized stock exchange.
FULL TEXT OF THE ITAT JUDGEMENT
1. These are the six appeals of two assesses namely, Mr. Dr. Prannoy Roy [ Dr. Roy] and Mrs. Radhika Roy, emanating from transactions of purchase and sale of shares of NDTV Limited entered in to by both of them with M/s RRPR Holdings Pvt Ltd [ RRPR, Company] and also issues of income from house properties pertaining to two assessment years. Shri Sachit Jolly, Ld Advocate on behalf of assessees and Shri Girish Dave, Ld Advocate, special counsel for revenue put extensive, erudite arguments. Thus, all these appeals were heard together on various dates fixed at the convenience and request of both the parties’ i.e. On 29/10/2018, 29/01/2019, 05/03/2019, 06/3/2019, and 19/3/2019 excluding request for adjournments moved. On 19/3/2019, bench asked certain details to be filed which were ultimately filed on 26/3/2019 and finally hearing was concluded on that date. Assessee has filed paper books and both the parties filed written notes. Further, both the parties relied up on several judicial precedents, which would be considered at the relevant point of time. All these appeals are heard together and therefore, disposed of by this common order.
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