Case Law Details

Case Name : CIT Vs Atma Ram Tulsyan and Others (Allahabad High Court)
Appeal Number : Income Tax Appeal Defective No. 232 of 2009
Date of Judgement/Order : 10/05/2011
Related Assessment Year :
Courts : All High Courts (3785) Allahabad High Court (206)

CIT Vs Atma Ram Tulsyan and Others (Allahabad High Court) – AO was of the view that the possibility of appreciation in the price of shares of lesser known companies in such short period appears to be remote. On this premise, the benefit of capital gains was denied. Evidently, in the absence of any contrary material, it is but obvious that the assessment order was framed on presumptions and assumptions. The other aspect of the case is that at no stage, except doubting the sale transactions, the Department doubted the documents which were produced by the assessee to substantiate his claim with regard to capital gains. This being so, the Tribunal on appreciation of evidence has rightly found that the transactions in question are genuine transactions. It is a finding of fact based on appraisal of evidence. We do not find that any substantial question of law is involved in the appeal. The appeal has no merit.

HIGH COURT OF JUDICATURE AT ALLAHABAD

Chief Justice’s Court

1. Case :- INCOME TAX APPEAL DEFECTIVE No. 232 of 2009

Petitioner :- Commissioner Of Income Tax

Respondent :- Atma Ram Tulsyan

Petitioner Counsel :- S.S.C./Shambu Chopra

Respondent Counsel :- S.D. Singh

2. Case :- INCOME TAX APPEAL DEFECTIVE No. – 233 of 2009

Petitioner :- Commissioner Of Income Tax

Respondent :- Subhash Chand Tulsyan

3. Case :- INCOME TAX APPEAL DEFECTIVE No. – 136 of 2009

Petitioner :- The Commissioner Of Income Tax And Another

Respondent :- Smt.Neelam Devi Tulsyan

4. Case :- INCOME TAX APPEAL DEFECTIVE No. – 135 of 2009

Petitioner :- The Commissioner Of Income Tax And Another

Respondent :- Smt.Sushila Devi Tulsyan

5. Case :- INCOME TAX APPEAL DEFECTIVE No. – 132 of 2009

Petitioner :- The Commissioner Of Income Tax And Another

Respondent :- Sh.Mukesh Kumar Tulsyan

6. Case :- INCOME TAX APPEAL No. – 213 of 2009

Petitioner :- The Commissioner Of Income Tax And Another

Respondent :- Smt.Kamlesh Devi Tulsyan

7. Case :- INCOME TAX APPEAL DEFECTIVE No. – 231 of 2009

Petitioner :- Commissioner Of Income Tax

Respondent :- Pawan Kumar Tulsyan

Petitioner Counsel :- S.S.C./Shambu Chopra

Respondent Counsel :- S.D. Singh

JUDGEMENT

Hon’ble Ferdino Inacio Rebello,Chief Justice

Hon’ble Prakash Krishna,J.

The above appeal has been filed against the order dated 24th December, 2008 passed by the Income Tax Appellate Tribunal, Allahabad Bench, Allahabad (the Tribunal) in Income Tax Appeal No. 495/ALL/2007. The Tribunal by a common order has disposed of ten appeals.

All these appeals were heard together and are being disposed of by a common order. The Income Tax Appeal Defective No. 232 of 2009 is the leading case. The facts of the said appeal are noticed herein.

The matter relates to the assessment year 2004-05. The assessee respondent filed its return of income disclosing agricultural income, salary income and income from capital gains from sale of shares of Indian Companies. The assessing officer rejected the claim of the assessee so far as capital gain is concerned. The said order was confirmed in appeal by the Commissioner of Income Tax (Appeals) [hereinafter referred to as the ‘CIT (A)’]. The Tribunal by the order under appeal has set aside both the order and accepted the claim of the assessee respondent with regard to the capital gains.

Before the assessing officer, the assessee furnished copies of contract notes, stock-holding statement, instruction to depository participant and copy of bank account in support of genuineness of transactions with regard to the capital gains. These documents were not disputed by the assessing officer. The Department did not accept the transactions as genuine transactions because the assessee failed to furnish the identity of the alleged purchaser of shares. The Tribunal has found that the assessee has filed relevant evidence such as purchase bills, contract notes, delivery instructions to DP M/s. Karvy Consultants Ltd., demat account with M/s. NSDL with holding statement, bank statements regarding sales, bills of brokers for purchase of shares, copies of accounts of assessee in books of brokers and the details about the valuation of the shares on the date of the transfer through Calcutta Stock Exchange, which establishes the assessee’s case.

Challenging the findings of the Tribunal, the learned standing counsel for the Department submits on the basis of some letter given by the Calcutta Stock Exchange that these transactions are not genuine transactions.

The Tribunal has examined the matter in great depth and has found that the brokers appeared before the CIT (A) confirmed the transactions with the assessee.

We have considered the respective submissions of the counsel for the parties and also gone through all the three orders.

We find that as a matter of fact, the shares were acquired by the assessee in the preceding years 2002-03 and 2003-04. The Department did not dispute the purchase of these shares in the aforesaid years. Noticeably, the assessee did produce all the possible documentary evidence before the assessing officer to substantiate his claim with regard to capital gains. A bare perusal of the assessment order would show that the assessing officer was obsessed with a view that the shares of M/s P.K. Leasing were purchased on 17th of August, 2002 at the rate of Rs.2.72 per share and were sold on 18th of September, 2003 at the rate of Rs.75.92 per share. Similarly, the shares of M/s Mohan Finance Ltd. which were purchased in the month of September, 2001 at the rate of varrying between Rs.3.02 to 4.52 per share and were sold at the rate of varrying from Rs.54.45 to Rs.40.14 per share. He was of the view that the possibility of appreciation in the price of shares of lesser known companies in such short period appears to be remote. On this premise, the benefit of capital gains was denied. Evidently, in the absence of any contrary material, it is but obvious that the assessment order was framed on presumptions and assumptions. The other aspect of the case is that at no stage, except doubting the sale transactions, the Department doubted the documents which were produced by the assessee to substantiate his claim with regard to capital gains. This being so, the Tribunal on appreciation of evidence has rightly found that the transactions in question are genuine transactions. It is a finding of fact based on appraisal of evidence.

We do not find that any substantial question of law is involved in the appeal. The appeal has no merit.

All these appeals are therefore, dismissed accordingly. No order as to costs.

Order Date :- 10.5.2011

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