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2015 (7) TMI 1425 - ITAT DELHIDisallowance of loss incurred on sale of shares - AO opined that there was no reasonable basis to justify the sale of shares worth Rs. 3 crore for a sum of Rs.75,000/- only and, further, the transaction was not with an independent party at fair market value - CIT-A deleted the addition - HELD THAT:- AO was fully justified in rejecting the genuineness of the transaction of purchase and sale of shares on the test of human probability. The entire story concocted by the assessee and its group concerns is aimed at defrauding the Revenue with ulterior motive. Such a course of action adopted by the assessee, which is nothing more than a camouflage, cannot be accepted. Our conclusion is fortified by the very fact that when the AO examined the entire position in detail and found out the irregularities as discussed above, the assessee came out with a proposal before the AO that he could assess the loss at Nil attributing any reason, but, not by way of disallowance attracting penalty u/s 271(1)(c) - The same submission was reiterated before the CIT(A) as well which has been incorporated. Despite all these goings-on, CIT(A) chose to delete the addition, was not justified - we overturn the impugned order and restore the action of the AO on this issue. Disallowance of loss claimed to have been incurred by the assessee on sale of shares - As it is again a non-genuine transaction entered into with the object of depriving the Revenue of legitimate tax due to the exchequer. It is totally unacceptable that a person who has sold shares for Rs.8 crore will sit quietly for more than 2 ½ years and will get payment only when his buyer, in turn, sells such shares. Considering these off market transactions of purchase and sale of the shares of M/s Solaris, relation between the buyer assessee seller and companies whose shares were transacted, all being group concerns, and the further fact that the seller did not claim payment from the assessee for more than 2 ½ years, coupled with the other related facts lead me to an irresistible conclusion that the transactions in the shares of M/s Solaris Holdings Ltd., were not genuine. The reasons noted above while discussing the long term capital loss from the shares of M/s Pioneer Ltd., apply with full force to this transaction as well. CIT(A) was not justified in deleting the addition - therefore, restore the view taken by the AO. Appeal filed by the Revenue is allowed.
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