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2016 (2) TMI 430 - ITAT DELHI

2016 (2) TMI 430 - ITAT DELHI - TMI - Long term capital loss disallowed - Held that:- As the expression "full value of consideration" used in section 48 of the Income Tax Act, 1961 does not have any reference to market value, we are of the view that the Assessing Officer was having no power to replace the value of the consideration agreed between the parties with any fair market value or estimation. Only because the Pioneer Ltd. had shown the book value of shares at the rate of ₹ 40/- (50, .....

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Revenue against the ld. CIT(A)-Meerut, vide his order dated 10/12/2013 for A.Y. 2004-05, in quantum appeal, and penalty appeal filed against the order dated 25/02/2014 by ld. CIT(A)-Muzaffarnagar for A.Y. 2004-05 on the following grounds of appeal: Grounds of ITA No. 1538/D/14 - Quantum appeal: 1. "Whether in the facts and circumstances of the case, the ld. CIT(Appeals) is justified in allowing the long term capital loss of ₹ 45,69,287/- on the sale of 5,800 shares of M/s R.B. Credit .....

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cts and circumstances of the case, the order of the CIT(A), Meerut may be set aside and that of the Assessing Officer restored." Grounds of ITA No. 3936/D/14 - Penalty appeal: 1. "Whether in the facts and circumstances of the case, the ld. CIT(A) is justified in deleting the penalty of ₹ 1005243/- imposed by the Assessing Officer on the ground that the additions on the basis of which penalty is imposed, have been deleted by the ld. CIT(A), without appreciating the fact that the s .....

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peal: The brief facts of the case are as under: The assessment u/s 143(3) was completed by the ld. Assessing Officer vide order dated 29/12/2006 at an income of ₹ 77,55,375/- after rejecting the long term capital loss of ₹ 45,69,287/-. 2.1. During the course of the assessment proceedings the ld. Assessing Officer had disallowed the long term capital loss which was incurred by the assessee on sale and purchase of shares. The ld. CIT(A), Meerut vide his order dated 07/01/09 confirmed t .....

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the purchase price given by him for the shares was a justified price and similar is the position with regard to sale price. There is no material on record to show also that the shares purchased and sold by the assessee were not belonging to the family concern. There is lack of material either in the order of CIT(A) or in the order of Assessing Officer. Though the Assessing Officer has observed that the value of shares as on the date of purchase cannot be taken at ₹ 50/- and ₹ 250/- p .....

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of hearing to the assessee, the Assessing Officer will re-decide this issue in accordance with law. We, direct accordingly." 2.3. Following the directions of this Tribunal, the assessee was called upon vide letter dated 01/11/2010 by the ld.AO. 2.4. Accordingly, the assessee filed certain reply on 10/11/2010. The ld. Assessing Officer issued notice u/s 142(1) as the facts were insufficient to reconsider the issue as per the directions of this Tribunal. The ld. AR did not appear on the date .....

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271(1)(c) of the Act dated 29/06/2011, that the assessee gathered regarding the assessment being completed. 3.1. It was noted by the ld. CIT(A) that the assessee had claimed a long term capital loss of ₹ 45,69,287/- on the sale of 58,000 shares of M/s R.B. Credit Pvt. Ltd. having face value of ₹ 10/- which were acquired by the assessee in March, 2000 and January, 2002 at a premium of ₹ 40/- (5,000 shares) and ₹ 240/- (8,000 shares) respectively. After indexing the cost o .....

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claimed by the assessee. He also observed that the Assessing Officer during the proceedings u/s 254 has merely repeated what has been stated in the original assessment order and has not brought any new facts on record. 3.2. The ld. CIT(A) after going into the submissions of the assessee held that the actions of the Assessing Officer could not be sustained as the purchases and the sales of the shares have been settled through banking channels and nothing has been brought on record to show that s .....

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issue under consideration is squarely covered vide order dated 27/02/2015 in the case of ACIT, Circle (1), Meerut vs. Shri Aditya Gupta in ITA No. 4938/D/2011 for A.Y. 2002-03 (copy of the said order was furnished which is placed on record). It is submitted by the ld. AR that Shri Ashish Gupta is the brother of assessee herein, and the transactions in shares were similar in both these cases and that this Tribunal has dismissed the appeal filed by the Revenue in the case of ACIT vs. Shri. Ashish .....

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us that there is no material on record on the basis of which it can be said that the assessee had received over and above the agreed consideration. The ld.AR submitted that, it is a well settled position in law that, in a case of sale, the Assessing Officer has no power to replace the value of consideration agreed between the parties. In support of this proposition reliance has been placed on the following decision: i. "Nilofar Singh 309 ITR 233 (Del.); ii. George Hanorson 66 ITR 622 (SC); .....

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e assessee had claimed a long term capital loss of ₹ 45,69,287/- on the sale of 58,000 shares of M/s R.B. Credit Pvt. Ltd. having face value of ₹ 10/- which were acquired by the assessee in March, 2000 and January, 2002 at a premium of ₹ 40/- (5,000 shares) and ₹ 240/- (8,000 shares) respectively. After indexing the cost of acquisition, the resultant long term capital loss was worked out at ₹ 45,69,287/-. 6.1. Considering the above submission by both the parties, we .....

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oss is to be computed in the manner, as laid down in section 48 of the Act, wherein expression used is full value of consideration received or accrued. The main thrust behind this contention of the assessee was that there is no scope of any fair market value or estimation, and in the case of sale of shares the Assessing Officer has no power to replace the value of the sale consideration agreed between the parties. 6.3. We find substance in the above contention of the assessee, in respect of this .....

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. This Tribunal in para 7 of the order had adjudicated identical issue in Aditya Gupta(supra), by relying on the order of Ashish Gupta (Supra) as under: "8. We have heard the rival submissions of both the parties and have gone through the material available on record. We have observed that the case of the assessee had traveled upto the stage of ITAT and Hon ble ITAT vide its order dated 16.12.2010 had remanded back to the office of ld. CIT(A) being a nonspeaking order of ld. CIT(A) and agai .....

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