TMI Blog2013 (11) TMI 314X X X X Extracts X X X X X X X X Extracts X X X X ..... or deciding the fair market value of the shares sold. The co-ordinate Bench in the case of Rupee Finance & Management (P) Ltd., reported in [2007 (2) TMI 240 - ITAT BOMBAY-J], Mumbai, ITAT held that in case of transfer of shares to a group company at cost price, difference between fair market value of the shares and their cost price cannot be brought to tax as capital gains. Since, there being no material to show that the assessee had received more consideration then recorded in the books. Disallowance of the loss claimed has been non-filing of appeal against the order of the AO, cannot, by itself, justify that penalty is exigible and leviable on the assessee, despite the fact that the assessee has placed all the material facts before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be bogus and against the market trend. 3. The assessee accepted the disallowance of loss by not filing any appeal before the CIT(A). 4. In consequence of the assessment order, wherein, the AO had disallowed a loss of Rs. 45,18,925/-, the AO proceeded to initiate penalty under section 271(1)(c), whereby he sought to levy penalty. 5. In the submissions made before the AO in the penalty proceedings, the assessee once again was unable to provide any explanation, which would have satisfied the AO as tangible explanation for the rightful explanation by the assessee. The AO, in the penalty order, relied on the decision of Union of India vs Dharmendra Textiles Processors, reported in 212 CTR 432 (SC) wherein, the Hon'ble Supreme Court held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed carry forward of losses of A.Y. 2008-09 of Rs. 47,78,262/-. Similarly in the return of income for A.Y. 2010-11 also the assessee company is claiming carry forward of losses of A.Y. 2008-09 of Rs. 47,78,262/-. While filing the return of income for A.Y. 2011-12 on 27th September, 2011 the assessee company had already received the order for A.Y. 2008-09 wherein the Assessing Officer had computed loss of Rs. 10,615/- only and disallowed the loss of Rs. 45,18,925/-. Hence in the return of income for A.Y. 2011-12 the assessee company has claimed carry forward of loss of A.Y. 2008-09 only of Rs. 10,615/-. It is, therefore, respectfully submitted that the assessee company's claim of loss on sale of shares was a bona fide claim made in good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the explanation that these two companies were non dividend paying companies, having no future prospect and no buyers of the shares of these two companies were available in the market and consequently the appellant's capital was unnecessarily lying blocked therein. The appellant's explanation was bonafide and satisfactory. Such explanation was not found to be false. The appellant disclosed all the facts in the return of income as well as during assessment proceedings. In the facts and circumstances the provisions of sec. 271(1)(c) were not attracted. The penalty levied by the A.O. is therefore, deleted. This ground of appeal is allowed". 9. Against this order, the department is in appeal before the ITAT. 10. Before us, the DR submitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital gains. Since, there being no material to show that the assessee had received more consideration then recorded in the books. In this case, the department took the case before the Hon'ble Bombay High Court, wherein, the Bombay High Court affirmed the decision of the Tribunal. 12. One of the other reasons was disallowance of the loss claimed has been non-filing of appeal against the order of the AO, as mentioned by him. This, cannot, by itself, justify that penalty is exigible and leviable on the assessee, despite the fact that the assessee has placed all the material facts before the AO. There could have been various reasons for non filing of the appeal, which fact could not lead to a conclusion of furnishing of inaccurate particula ..... X X X X Extracts X X X X X X X X Extracts X X X X
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