TMI Blog2014 (5) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... ransfer 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. - TAX APPEAL NO. 1003 of 2013 TO 1006 of 2013 With TAX APPEAL NO. 1102 of 2013 TO 1105 of 2013 With TAX APPEAL NO. 1124 of 2013 TO 1126 of 2013 - - - Dated:- 3-2-2014 - MR. AKIL KURESHI AND MS SONIA GOKANI, JJ. Nitin K. Mehta for the Appellant S.N. Soparkar and B.S. Soparkar for the Respondent ORDER Akil Kureshi, J. Leave to amend questions of law framed in Tax Appeal Nos.1105 and 1126 of 2013. This group of Tax Appeals involve similar questions. They have, therefore, been heard to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receipts. Similarly when purchases were made from other entities, they were also not followed by cheque payments. He concluded that the assessee carried off market transactions by simple purchase bills or sales bills ignoring market rates. This was done to avoid tax. The assessee carried the matter in appeal. Before the CIT (Appeal), the assessee gave detailed written explanation to the various issued raised by the Assessing Officer in the order of assessment. On behalf of the assessee, it was contended that the transactions were genuine. Even the Assessing Officer had not questioned the factum of the transactions. Accounts entries were made recognizing the payments. Details were produced to show that the sales and purchases were made at market rate. The CIT (Appeals), after taking note of the detailed submissions of the assessee and the material on record held as under: 19. Considering the arguments of the appellant's representatives on the observations of the Assessing Officer for making this disallowance, I am inclined to agree, with the appellant that the disallowance has been made without any justifiable basis. After conceding that securities dealing thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the Revenue's contention that the transactions were not at market rate also dealt with other two objections. In fact, before us, it was not even seriously argued that the transactions breached any of the statutory provisions and in particular section 19(1) of the Securities Contract (Regulation) Act. Regarding the delivery and payments, the Tribunal accepted the assessee's ground that necessary entries were made and delivery slips were also passed. Having heard the learned counsel for the parties and having perused the documents on record, we notice that the additions made were in the hands of the company on substantive basis and in the hands of individuals on protective basis. In essence, the question was about the genuineness of the transactions. The fact that the transactions did take is not in dispute. 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. However, the CIT (Appeals) as well as the Tribunal have both concurrently held that there was no material before the Assessing Officer to come to such a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate of the shares of HCL Tech on 25.3.2004 were opening Rs. 239.40, high Rs. 267.00, low Rs. 237.25 and close Rs. 255.80 and it is seen that the purchase price is below the high rate of this script on that date. Similarly, the assessee has also submitted a chart of sale of various scripts on 26.3.2004 for a total amount of Rs. 8,24,37,192/-. This includes sale of 1611 shares of ACC Ltd. @ Rs. 256.88 per share with total value of Rs. 4,13,837/-. The market rate of the shares of ACC Ltd. on 26/3/2004 was open Rs. 247.90, high Rs. 257.00, low Rs. 246.80 and close Rs. 255.35. The transaction price being sale price adopted by the assessee of Rs. 256.88 is just close to the high price of this share on this date. Similarly, for remaining sale of ten various scripts also, the assessee had also submitted prices of the concerned share on 26/3/2004 and it is seen that almost in all the cases, the sale price adopted by the assessee is near to the high price of the concerned script on this date. When the sale price adopted by the assessee is close to the high price of the concerned share on the relevant date, it cannot be said that the transactions effected by the assessee is not at market rat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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