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TMI Blog2016 (9) TMI 1152X X X X Extracts X X X X X X X X Extracts X X X X ..... ary interconnected grounds raised by the assessee per its appeal are as under:- "1. That the order passed by the Ld Assessing Officer as well as Ld. C.I.T.(A) is arbitrary, imaginary without any basis and illegal. 2. That the Ld. C.I.T.(A) has erred in confirming the disallowance of short term capital loss of Rs. 5681304/- which was disallowed by the Ld Assessing Officer only on the basis of that the stock broker has been suspended by the SEBI, which is totally against the fact and law also. 3. That the Ld. C.I.T.(A) has erred in confirming the disallowance of short term capital loss of Rs. 5681304/- which was disallowed by the Ld Assessing Officer observing that the short term capital loss arise by trading in shares of companies wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pslfinance 4,97,725/- 49,300/- 4,48,425/- Limtxinv 9,89,900/- 1,24,700/- 8,65,200/- Sangocon 15,75,340/- 2,92,080/- 12,83,260/- During the assessment proceedings, AO observed that sale/purchase of shares of M/s Globe Stock and Securities Ltd. has been banned by SEBI and investigation is carried out against the other companies as stated above by SEBI. It was also observed that the broker M/s Rajendra Prasad Shah through whom the transactions in the share of above companies were carried out by the assessee was also suspended by SEBI. The relevant contract notes were sent to Kolkata Stock Exchange (KSE for short) by the AO for verification but KSE was not able to provide the name and address of the seller/ purchaser of such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the claim of assessee and upheld the action of AO by observing the following facts:- (a) Share broker, M/s Rajendra Prasad Shah did not provide the details of the buyers and sellers of the share of aforesaid company, therefore the activities were suspended as the broker, M/s Rajendra Prasad Shah deliberately was not providing the details of buyers and sellers which are mandatory in nature. The said broker was suspended for the activity of share done in the earlier year period also; (b) It was noted from the date-wise chart of the price of the unquoted sharescrip of the aforesaid four companies that there was a sharp decline in the price of the companies. Although, the SENSEX was gaining ratio growth. Accordingly, Ld. CIT(A) found that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. In our considered view we find that the assessee has proved the transaction on the basis of documents and therefore the suspension of the broker by SEBI will not hold the transaction in valid. In this connection we are putting our reliance in the judgment of Hon'ble jurisdictional High Court in the case of Commissioner of Income Tax vs. Korlay Trading Co. Ltd. (1999) 152 CTR 0017 : (1998) 232 ITR 0820, the head note of the case reads as under : "Business income-Loss on sale of shares-Genuineness of transaction doubted-Assessee by furnishing name of company, number of shares purchased, date of sale, amount of purchase and sale money, etc. discharged its initial burden-Merely because broker through whom transaction was made failed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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