IT : Where assessee, engaged in trading of shares, purchased certain shares but same could not be transferred in its name due to some dispute and accordingly payment towards said shares was also not made, in spite of lapse of 12-13 years, there being nothing to suggest that there was remission or cessation of said liability during previous year, no addition could be made under section 41(1) on account of cessation of said liability
IT : Where Assessing Officer noticing shortage of closing stock of shares by 500 shares, added amount of said shares as unaccounted sales, in view of fact that such shortage was on account of transaction of purchase of certain shares in last month of year out of which there was short delivery of 500 shares at year end, addition was not justified
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[2016] 65 taxmann.com 220 (Ahmedabad - Trib.)
IN THE ITAT AHMEDABAD BENCH 'D'
Income-tax Officer, Ward 8(1), Ahmedabad
v.
Sanghvi Fincap Ltd.*
SHAILENDRA KR. YADAV, JUDICIAL MEMBER
AND ANIL CHATURVEDI, ACCOUNTANT MEMBER
IT APPEAL NO. 536 (AHD.) OF 2011
[ASSESSMENT YEAR 2007-08]
MAY 14, 2015
I. Section 41(1) of the Income-tax Act, 1961 - Remission or cessation of trading liability (Applicability of) - Assessment year 2007-08 - Assessee, engaged in business of trading of shares and securities, had purchased certain shares from various parties and same were delivered to it in physical form - However, same could not be subsequently transferred in name of assessee-company on account of certain disputes between parties and, therefore, payment towards said shares was not made and it remained outstanding in books of assessee since 1996-97 - Assessing Officer held that said liability had ceased - Whether provisions of section 41(1) would apply where there had been remission or cessation of liability during year under consideration and since instant case, it was not case of Assessing Officer that assessee-company had received any cash or benefit in respect of trading liability by way of remission or cessation thereof and assessee had filed various details and explanation in respect of outstanding creditors showing that liability was outstanding till date, addition made under section 41(1) was to be deleted - Held, yes [Para 2.1][In favour of assessee]
II. Section 69 of the Income-tax Act, 1961 - Unaccounted investments (Unaccounted sales) - Assessment year 2007-08 - Assessee was engaged in business of shares and securities - On verification of record, Assessing Officer noticed that assessee should have shown 62,272 shares of Spectra as closing stock while it had been showing 61,772 shares - He added amount of balance shares as unaccounted sales - Facts revealed that certain shares were purchased on 29-3-2007 and there was short delivery to extent of difference noticed by Assessing Officer at year end - Whether there was no reason for additions on basis of shortage of delivery since contra account of broker also showed stock at 62,272 shares - Held, yes [Para 4] [In favour of assessee]
IT : Where Assessing Officer noticing shortage of closing stock of shares by 500 shares, added amount of said shares as unaccounted sales, in view of fact that such shortage was on account of transaction of purchase of certain shares in last month of year out of which there was short delivery of 500 shares at year end, addition was not justified
■■■
[2016] 65 taxmann.com 220 (Ahmedabad - Trib.)
IN THE ITAT AHMEDABAD BENCH 'D'
Income-tax Officer, Ward 8(1), Ahmedabad
v.
Sanghvi Fincap Ltd.*
SHAILENDRA KR. YADAV, JUDICIAL MEMBER
AND ANIL CHATURVEDI, ACCOUNTANT MEMBER
IT APPEAL NO. 536 (AHD.) OF 2011
[ASSESSMENT YEAR 2007-08]
MAY 14, 2015
I. Section 41(1) of the Income-tax Act, 1961 - Remission or cessation of trading liability (Applicability of) - Assessment year 2007-08 - Assessee, engaged in business of trading of shares and securities, had purchased certain shares from various parties and same were delivered to it in physical form - However, same could not be subsequently transferred in name of assessee-company on account of certain disputes between parties and, therefore, payment towards said shares was not made and it remained outstanding in books of assessee since 1996-97 - Assessing Officer held that said liability had ceased - Whether provisions of section 41(1) would apply where there had been remission or cessation of liability during year under consideration and since instant case, it was not case of Assessing Officer that assessee-company had received any cash or benefit in respect of trading liability by way of remission or cessation thereof and assessee had filed various details and explanation in respect of outstanding creditors showing that liability was outstanding till date, addition made under section 41(1) was to be deleted - Held, yes [Para 2.1][In favour of assessee]
II. Section 69 of the Income-tax Act, 1961 - Unaccounted investments (Unaccounted sales) - Assessment year 2007-08 - Assessee was engaged in business of shares and securities - On verification of record, Assessing Officer noticed that assessee should have shown 62,272 shares of Spectra as closing stock while it had been showing 61,772 shares - He added amount of balance shares as unaccounted sales - Facts revealed that certain shares were purchased on 29-3-2007 and there was short delivery to extent of difference noticed by Assessing Officer at year end - Whether there was no reason for additions on basis of shortage of delivery since contra account of broker also showed stock at 62,272 shares - Held, yes [Para 4] [In favour of assessee]
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