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2019 (1) TMI 15 - AT - Income TaxDisallowance of loss of trading in bonds - A.O. was of the view that trading transactions in securities has not been effected for commercial purpose but to create loss with a view to reduce tax liability. - non-compliance of the summons - Held that:- A.O. has neither fully investigated nor brought any material on record to prove that the transactions are bogus. It is also explained that the assessee has squared up the deal which otherwise would have resulted in locking up of huge fund for a longer time and particularly in view of the fact that such long term fund was not available at the disposal and by non-honoring he would have been declared insolvent. The assessing officer has not examined/investigated the transactions in order to prove that the transactions were bogus and not genuine. The A.O. has not contradicted the claim of the assessee that there was no prohibition on carrying out off market transactions. The assessee has already filed a compliance letter dated 22/02/2016 (PBP 37) by the submitting the requisite details. For alleged non-compliance of the summons, the A.O. has neither issued any show cause notice nor imposed penalty u/s. 272A(l)(c) of the Act. The assessee has also provided his new address where he was presently staying for communication to the A.O. He has also requested for reasonable and adequate time for making compliance. We observe from the material placed on record that the A.O. has not further indicated the need for any personal examination of the assessee. The loss on the trading of the lands was occurred before the earning of profit on the sale of land by the assessee. We find that as per material on record the loss in trading of lands was occurred on 01/01/2013 whereas the profit on the sale of land was occurred on sale of land 24/01/2013. Considering the contention of the ld. counsel that it is open market trade and the price is as agreed upon by the purchaser and sellers as per their requirement based on different factors like need of liquidity of funds etc., we observe that the A.O. has raised a number of doubt about the genuineness of above cited transactions but has not proved with supporting materials that the transactions were bogus - A.O. has failed to establish with relevant material that the impugned transactions in the sale/purchase of shares were not genuine. No justification in the decision of Ld.CIT(A) to disallow the loss on transactions on lands merely on doubt assumption basis, therefore the appeal of the assessee is allowed
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