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Issues involved: Appeal u/s 260A of the Income Tax Act challenging the disallowance of short-term capital loss on sale of shares.
Summary: The High Court of Calcutta heard an appeal filed by the Revenue against the order of the Income Tax Appellate Tribunal confirming the disallowance of a short-term capital loss claimed by the assessee from the sale of shares. The main issue was whether the Tribunal was justified in holding the loss as genuine. Upon review of the evidence, it was found that the Assessing Officer disallowed the trading loss suffered by the assessee, citing anomalies in the share transactions. The assessee had submitted various documents including purchase and sale contract notes, Demat account copies, and bank statements to support the transactions. The Assessing Officer raised concerns about transactions carried out by the broker on their own code instead of the client's code, but the Appellate Authority disagreed, stating that there was no prohibition on such transactions. The Appellate Authority concluded that the Assessing Officer failed to prove that the transactions were not genuine, as the assessee had provided complete documentary evidence of the transactions through registered share brokers, Demat accounts, and account payee cheques. It was determined that the capital loss on the sale of shares was genuine. Ultimately, the High Court upheld the decision of the Tribunal and dismissed the appeal, stating that no substantial question of law was involved. The delay in filing the appeal was also condoned.
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