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2017 (1) TMI 1629 - AT - Income TaxDisallowance of expenses incurred in connection with issue of bonus share - allowable revenue expenses - CIT(A) was of the opinion that such expenditure is of revenue in nature and deleted the same - Held that:- We find force in the factual findings of the First Appellate Authority. The entire expenditure has been incurred for the continuance of the listing of the shares with the various authorities as mentioned hereinabove. We therefore, do not find any error or infirmity in the findings of the ld. CIT(A) Ground no. 1 is accordingly dismissed. Addition on account of unrealized sales - Held that:- As decided in assessee's own case for A.Y. 2005-06 [2014 (1) TMI 1851 - ITAT AHMEDABAD] there was no need to disturb the method of accounting followed by assessee-company and also found no discrepancy in terms and conditions of purchase orders. CIT(A) has also analyzed the case laws relied by the AO and also that of assessee and found that reliance placed by AO on certain case laws was misplaced as they do not apply to the facts of assessee’s case. On the other hand, he followed Hon’ble Supreme Court decision in assessee’s sister concern, namely Apollo Industrial Products P. Ltd for assessment year 1989-90 in which identical issue was decided in favour of assessee and against the revenue. Disallowance u/s. 14A r.w. Rule 8D - Held that:- Commissioner (Appeals) has, after analyzing the material on record, found as a matter of fact that the assessee had sufficient surplus funds at its disposal for making any investment in share and for business purpose and therefore, there was no nexus that could be established with the expenditure incurred by the assessee for earning the exempt income. - Decided in favour of assessee. Disallowance of loss on sale of shares - Held that:- It is true that the impugned shares were of unlisted companies; therefore, there is no data available for the prevailing market rate on the date of sale from the stock exchanges. All that has to be seen is whether the valuation of the shares is scientific and based upon facts and figures. We find that the valuation of shares is back by the certificate of Chartered Accountant which is exhibited from pages 119 to 123 of the paper book. A perusal of the same show that the C.A. has done a scientific valuation as per the prescribed norms. No error in the valuation so made. As decided in ASHOK SONI. VERSUS INCOME-TAX OFFICER. [2006 (6) TMI 147 - ITAT DELHI-C] No material was available with the AO to show that the assessee has received more amount than the consideration shown in the registered document After deletion of s. 52 it is not possible for the AO to adopt the market value or any other value other than the apparent consideration for sale Therefore, the action of the AO in substituting the full value of consideration by the fair market value as stated by the DVO in his report was not valid - We set aside the findings of the ld. CIT(A) and direct the A.O. to allow the loss - decided in favour of assessee.
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