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2015 (3) TMI 563 - AT - Income TaxDisallowance of loss arising out of valuation of shares - AO has raised the issue that BIFC did not have the adequate number of shares in their stock as on the date sale - CIT(A) deleting the disallowance - Held that:- the facts are contrary to the findings of the AO, as would appear from the copy of account enclosed herewith, that the said BFIC had the required number of shares in their stock and in response to the query of the AO, an explanation was filed vide letter dated 30.11.2011 (copy is enclosed in assessee's paper book). Further, the AO also made enquiry u/s. 133(6) from the seller BIFC, who also replied and admitted the factum of the sale of share. Therefore simply because the shares amount transferred to the Demat account of the assessee or that the payments were made in the subsequent year, the transaction cannot be taken to be not genuine. The AO noted that the transaction is bogus and further the purchase was inflated. However, there is no basis for the same but it is only the presumptions of the AO. Moreover, as informed during the course of this appeal hearing before us by Ld. Counsel that after completion of the assessment of the assessee, scrutiny assessment of the seller was taken up and in such scrutiny assessment, the sale of the have been treated to be genuine. This fact was also not examined by the AO from the assessment records of the seller, as the PAN was given. We are of the view that in case the transaction have been treated as genuine in the hands of the seller, the same very transaction cannot be non-genuine in the hands of the purchaser. On identical issue taken up by Hon'ble Gujarat High Court in the case of Prudent Finance (P.) Ltd. [2014 (5) TMI 10 - GUJARAT HIGH COURT] we are of the view that the transaction to unrelated parties i.e. off market transaction, there was no evidence in the present case also which suggests that the shares were artificially sold at a lower rate than the prevailing market rate. Even the AO could not bring anything on record, which suggests that the selling rate was lower than the market rate. Respectfully following Hon'ble Gujarat High Court, we confirm the order of CIT(A) and the issue of revenue's appeal is dismissed. - Decided in favour of assessee.
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