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TMI Blog2014 (1) TMI 498X X X X Extracts X X X X X X X X Extracts X X X X ..... ellate Tribunal was justified in law in restoring the action of the Assessing Officer in making disallowance of short term capital loss ofRs. 22,50,000/- on sale of shares of M/s Arcee Ispat Udyog Limited? B. Whether the findings of the Tribunal that the transactions of purchase and sale of shares of M/s Arcee Ispat Udyog Limited were not genuine, not bonafide and were for creating artificial short term capital loss, are not perverse? C. Whether the findings of the Income Tax appellate Tribunal that the assessee has failed to discharge the onus to prove the genuineness of transactions of purchase and sale of shares, are not perverse? D. Whether the Income Tax Appellate Tribunal has failed to appreciate that an offer of surrender by the assessee does not mean admission to taxability? E. Whether upon examination of the true nature of transactions the tribunal was justified in holding that the transactions were not genuine and bonafide? &nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - and sold the same on 1.2.2008 at the rate of Rs. 10/- per share for Rs. 2,50,000/- and in this process had incurred short term capital loss of Rs. 22,50,000/- which was permissible under the Act. According to the learned counsel, the CIT(A) had rightly allowed the claim of the assessee. Relying upon judgment of this court in Porrits and Spencer (Asia) Limited v. CIT, (2010) 329 ITR 222, it was submitted that in the absence of any concrete evidence against the assessee, the Assessing Officer and Tribunal were not justified to decide the issue against the assessee. 6. After hearing learned counsel for the appellants, we do not find in merit in these appeals. 7. The primary issue that arises for determination in these appeals is whether the revenue was justified in disallowing loss suffered by the assessee on the sale and purchase of shares of M/s Arcee Ispat Udyog Limited. The assesse had purchased 25000 shares of M/S Arcee Ispat Udyog Limited on 8.11.2007 which was not quoted on the stock exchange at the rate of Rs. 100/- per share of which face value was Rs. 10/- per share. The assessee sold these shares on 1.2.2008 at the face value of Rs. 10/- per share and incurred short ter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hares to same Delhi based broker namely TCG Stock Brokers Limited, on the same date i.e. 31.3.2008 @ Rs. 10/- per share. iv) As per the relevant record, the book value of such share, as on 31.3.2008, stood at Rs. 56/- and the appellant sold such shares @ Rs. 10/- per share, on the same date i.e. 31.3.2008. v) The share broker sold back the same shares, on 12.8.2008, @ Rs. 100/- per share, to Smt.Krishna Gupta, Director in the said company and wife of Shri R.C.Gupta, who is Managing Director in the same company, thus showing circular transactions, in the matter. vi)The shares were allotted directly by the unlisted company to the appellants and the transactions were not routed through any stock exchange. 8. The learned CIT(Appeals) completely disregarded the above indicated series of transactions, eloquently demonstrating the true nature of such transactions. The CIT(Appeals), merely dissected such integrated transactions and focused on individual step of such transactions independently and consequently, observed that purchase and sale of such shares has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 540 (SC) has categorically held that the revenue is entitled to look into the surrounding circumstances, to find out the reality of the recitals made in the documents. The relevant observations and findings of Hon'ble Supreme Court, in the matter of discharge of 'onus of proof' and the relevance of surrounding circumstances of the case are "that though an appellant's statement must be considered real until it was shown that there were reasons to believe that the appellant was not the real, in a case where the party relied on self serving recitals in the documents, it was for the party to establish the transfer of those recitals, the taxing authorities were entitled to look into the surrounding circumstances to find out the reality of such recitals. Science has not yet invented any instrument to test the reliability of the evidence placed before a Court or Tribunal. Therefore, the Courts and the Tribunals have to judge the evidence before them by applying the test of human probability. Human minds may differ as to the reliability of place of evidence, but, in the sphere, the decision of the final fact finding authority is made conclusive by law. xx xx xx xx xx xx xx xx xx 11(i) W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hort term capital loss. Such transactions are mutually self-serving. It is mentioned that earning profit is a natural instinct ingrained in human beings, particularly in the businessman, unless, of course, earning of loss is also a profitable preposition, as is discernible from the fact situation of the present appeals. The appellants restored to a preconceived scheme, to procure short term capital loss, for the purpose of neutralizing the short term capital gains by way of price differential, in the said share transactions not supported by market factors. Cumulative events in such transactions of shares reveals that the same are devoid of any commercial nature and fall in the realm of not being bonafide, in contents. In view of the above legal and factual discussion and judicial precedents discussed above, we are of the opinion that the findings of the CIT(Appeals) are not based on relevant, cogent and credible material or evidence. Such share transactions were not quoted and consequently, were not traded through stock exchange. When all the facts and circumstances of the case are viewed, in totality, it is evident that the assessee appellants failed to discharge the onus, to prov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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