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2014 (5) TMI 10 - GUJARAT HIGH COURTAddition on account of loss in sale of shares – Off market transactions – Genuineness of the transactions – tax avoidance device, - Held that:- The Tribunal rightly upheld the view of the CIT(A) that the disallowance has been made without any justifiable basis - Tribunal rejected the Revenue's objection that the transactions were not carried out at the market rate observing that there was not a single instance brought on record by the AO saying that the purchase and sale were effected not at market rates – it was not seriously argued that the transactions breached any of the statutory provisions and in particular section 19(1) of the Securities Contract (Regulation) Act - the Tribunal accepted that necessary entries were made and delivery slips were also passed. The additions made were in the hands of the company on substantive basis and in the hands of individuals on protective basis - the question was about the genuineness of the transaction - Revenue seems to be contending that the transactions were deliberately attempted to create loss/profit in order to transfer such corresponding loss/profit to the related parties to avoid legitimate tax liabilities - the allegation that the transactions were not at market rate has been dispelled by the Tribunal referring to the materials on record - necessary entries were made in the account books of both sides, i.e. purchaser and seller and delivery receipts were also passed demonstrating contemporaneous sale and purchase of the shares - off market transactions were permitted in law, that there was no evidence to suggest that artificially they were sold at rates lower than the prevailing market rate – the question involved is not a substantial question of law – Decided against Revenue.
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