The Commissioner Of Income Tax vs Medshave Health Care Ltd
2010 Latest Caselaw 751 Del

        IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                 Judgment delivered on: 9th February, 2010

+       ITA 124/2010

THE COMMISSIONER OF INCOME TAX
CENTRAL REVENUE BUILDING
NEW DELHI                              ..... Appellant
                Through: Mr Sanjeev Sabharwal

                    versus

MEDSHAVE HEALTH CARE LTD
BEHIND GOLF COURSE
NEW DELHI                                             ..... Respondent

Through: None

CORAM:

HON'BLE MR JUSTICE BADAR DURREZ AHMED HON'BLE MR JUSTICE SIDDHARTH MRIDUL

1. Whether reporters of local papers may be allowed to see the judgment?

2. To be referred to the Reporter or not?

3. Whether the judgment should be reported in the Digest?

SIDDHARTH MRIDUL, J (ORAL)

1. This appeal has been preferred by the Revenue against the order

dated 19th June, 2009 in ITA No.1450/Del./2006 for the assessment year

2002-03.

2. The assessee company during the relevant year was engaged in the

sale and purchase of shares held as investment. According to the assessee it

had sold shares of Vikas Fitting Ltd to Ramesh Chand Industries Ltd and

shares of M/s Ocean Infrastructure Ltd to M/s Silver Streaks Trading Pvt.

Ltd. These shares had been purchased during the financial year 1997-98 by

ITA 124/2010 page 1 of 3 the assessee and were reflected in the audited financial statements.

According to the assessee, since M/s Ramesh Chand Industries Ltd was

having a current account with M/s Silver Streaks Trading Pvt. Ltd., both

companies agreed to adjust the amount internally. As a result of this

adjustment, the entire amount towards sale of the shares became payable to

the assessee by M/s Silver Streaks Trading Pvt. Ltd.

3. The Assessing Officer, however, treated the amounts as unexplained

cash credit and, therefore, added the amount to the income of the assessee

company as unexplained cash credit. The assessee took this matter up in

appeal before the Commissioner of Income Tax (Appeals), who deleted the

addition made by the Assessing Officer.

4. Aggrieved by the order of the Commissioner of Income Tax

(Appeals), the Revenue filed an appeal before the Income Tax Appellate

Tribunal, which dismissed the appeal of the Revenue by the impugned order

dated 19th June, 2009.

5. The Tribunal noticed that the assessee had filed the confirmation letter

of M/s Ramesh Chand Industries Ltd before the Commissioner of Income

Tax (Appeals). Further, the assessee had produced a copy of the ledger

account in the case of M/s Ramesh Chand Industries Ltd in the books of M/s

Silver Streaks Trading Pvt. Ltd before the Assessing Officer in remand

proceedings. Furthermore, it was noticed by the Tribunal that the sale of

shares to M/s Silver Streaks Trading Pvt. Ltd was reflected in the books of

ITA 124/2010 page 2 of 3 the assessee and that these amounts were also shown as advance in the

balance sheet of the assessee company and as a credit in the balance of M/s

Silver Streaks Trading Pvt. Ltd as on the 31st March, 2003. Concerning the

payment made by M/s Silver Streaks Trading Pvt Ltd., it was found that the

same was made in October-November, 2003 by Account Payee cheques and

a certificate from Corporate Bank in this regard was produced before the

Assessing Officer in the remand proceedings, which was forwarded to the

Commissioner of Income Tax (Appeals) by the Assessing Officer.

Therefore, the Tribunal came to the conclusion that it was clear that the

assessee company had been holding the shares which were sold by it during

the year and that it was on this basis that the learned Commissioner of

Income Tax (Appeals) had arrived at a conclusion that there was no reason

to hold that the assessee company did not own these shares. Therefore, the

Tribunal observed that there was no reason to hold these transactions to be

sham transactions or the credits to be unexplained cash credits.

6. The findings arrived at by the Tribunal are pure findings of fact and

we do not find any error in them so as to warrant interference by this Court.

No substantial question of law arises for our consideration and consequently

the appeal is dismissed.

                                                 SIDDHARTH MRIDUL, J



                                             BADAR DURREZ AHMED, J
FEBRUARY 09, 2010
dn




ITA 124/2010                                                       page 3 of 3