Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (10) TMI 2304 - AT - Income TaxDisallowance of loss under the head "capital gain" treating the transaction doubtful - whether there is no scope of any fair market value or estimation and in case of sale of shares, the Assessing Officer has no power to replace the value of the consideration agreed between the parties? - Held that:- In the present case, the assessee had shown sale of 10 lacs shares of Pioneer Ltd. for a total consideration of ₹ 1 lac only i.e. @ ₹ 0.10 per share. The cost of such shares had been shown at ₹ 4 crores i.e. ₹ 40 per share.The shares were sold to A.S.A. Agencies Pvt. Ltd. @ ₹ 0.10 per share on 31.3.2009. The loss incurred on the sale of shares was ₹ 4,47,75,491. In view of the of Nilofar Singh case [2008 (8) TMI 165 - DELHI HIGH COURT] that the expression "full value of consideration" used in section 48 of the Income-tax Act, 1961 does not have any reference to market value, we are of the view that the Assessing Officer was having no power to replace the value of the consideration agreed between the parties with any fair market value or estimation. Only because the Pioneer Ltd. had shown the book value of shares at the rate of ₹ 3.50 per share, the Assessing Officer was not justified to ignore the price agreed between the parties and to doubt the genuineness of the claimed loss, even ignoring the valuation report. We thus while setting aside orders of the authorities below direct the Assessing Officer to delete the disallowance of ₹ 4,47,55,491 incurred on the sale of shares of the Pioneer Ltd. The issue is thus decided in favour of the assessee.
|