TMI Blog2018 (6) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee to the revenue is not the correct consideration received by them and that the same should be replaced. Long term loss on sale of shares cannot be allowed to be non-genuine and therefore, we direct the AO to allow the set off such loss against the long term capital gain on compensation received by the assessee upon surrender of tenancy rights by setting aside the order of CIT(A) on this issue.- Decided in favour of assessee. Penalty u/s 271(1)(c) - Held that:- Since, we have allowed the long term capital loss on sale of shares to be genuine and allowable to be set off against the compensation received from surrender of tenancy rights and thus allowed the appeal of the assessee in quantum appeal. Consequently, the penalty as levied u/s.271(1)(c) does not survive. - ITA Nos. 3075/Mum/2012 - - - Dated:- 30-5-2018 - Shri C.N. Prasad, Judicial Member And Shri Rajesh Kumar, Accountant Member For The Appellant : Shri R.C. Jain For The Respondent : Shri M.C. Omi Ningshen ORDER Per Rajesh Kumar, Accountant Member These appeals are by the assessee against order of the CIT(A), Mumbai for A.Y. 2005-06 one against the confirmation of quantum add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 Kamat Holdings Pvt. Ltd., 1300 60.00 27.06.02 390000 78000 480/463 404320 326320 3 Kamat Development Ltd., 4450 70.00 27.06.02 1557500 311500 480/463 1614687 1303187 4 Supplyco Foods P. Ltd. 2400 60.00 28.06.02 720000 144000 480/463 746436 602436 5 Kamat Amusement Pvt. Ltd., 425 804.00 20.11.03 1708500 341700 1771231 1429531 Total 9388440 1877688 9733156 7855468 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Learned AR submitted that the transactions were executed after following due procedures as laid down in the respective laws. The learned AR brought to the attention of the Bench, the copies of resolution of the Board of Directors which is filed at page No.15 of the paper book evidencing that the decision to sell the said shares was taken in a meeting of the Board of Directors held on 18/03/2005 and the share transfer forms were duly executed after affixing the requisite stamp fee the copies whereof are filed at page No.17 to 28. Learned AR also took us through the copy of balance sheet filed at page No.10 of the paper book in which the cheques in hand were shown at ₹ 33,27,233/-. Learned AR submitted that all the companies in which assessee was holding shares as sold during the year were incurring losses right from 1998-99 to 2003-04 details whereof is filed at page 36 of the paper book. Learned AR also took us through the copies of balance sheet of these private limited companies which are filed at page No.38 to 64 of the paper book corroborating that the said companies were making losses over the years and the shares in the said companies were valued on the basis of balanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tering into selling of shares at a price determined on the basis of balance sheet of the respective companies and also by following the procedure laid down in the respective legislation. Finally learned AR prayed before the Bench that since assessee has entered into genuine transactions of sale of shares, the appeal of assessee deserved to be allowed by setting aside the order of the CIT(A). 11. We have heard rival submissions and perused the material on record. The undisputed facts are that assessee has received compensation of ₹ 75 lakhs for surrender of tenancy rights from Bombay Amusements Pvt. Ltd under High Court order. The assessee was holding shares in five private limited companies for more than a year which were loss making companies over the years and incurring losses from year to year. The assessee sold the said shares on various rates mentioned in Column 4 of the table as stated hereinabove depending on the financial position of the respective companies as all these companies were loss making. Assessee sold these shares on 21/03/2005 to Vishal Amusement Park Pvt. Ltd., which is also group company. The case of the Revenue is that the transactions entered into b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has shown the full consideration received for the sale of shares which has been disclosed in the return of income and the same can not be substituted. We find that both Commissioner of Income Tax (Appeals) as well as the Tribunal have rendered a finding of fact that the consideration of ₹ 750/- and ₹ 936/- per share received on the sale of the shares by the respondent assessee was in fact the full consideration which have been disclosed to the revenue. It is not the case of the revenue that the amount disclosed by the respondent assessee was less than what has been received by them or what had accrued on sale of its shares. The revenue has not in any manner shown that the consideration disclosed by the respondent assessee to the revenue is not the correct consideration received by them and that the same should be replaced. Moreover, wherever the Parliament thought it fit that the consideration on a transfer of a capital asset has to be ascertained on the basis of market value of the asset transferred specific provision has been made in the Act. To illustrate Section 50C of the Act provides for stamp value duty in case of transfer of land or buildings. Similarly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed certain doubts as to why such a loss was incurred. However, they have not been able to produce any evidence to dispel the credibility of the prices as indicated by the respondent assessee when there is no evidence to upset the purchase sale prices of said shares. The prices arrived at on the basis of networth of the said companies as provided by the assessee, would have to be accepted. If that were to be done then the addition could not be made as the transactions would be in order. There is also no finding that '.he transactions were not legitimate or that the transactions were sham. 15. Keeping in view the ratio laid down by the various High Courts, the Coordinate Benches and the facts of the assessee s case, we are of the considered view that the long term loss on sale of shares of ₹ 78,55,468/- cannot be allowed to be non-genuine and therefore, we direct the AO to allow the set off such loss against the long term capital gain on compensation received by the assessee upon surrender of tenancy rights by setting aside the order of CIT(A) on this issue. 16. In the result, appeal of the assessee is allowed. ITA NO. 2087/Mum/2015 17. The issue raise ..... X X X X Extracts X X X X X X X X Extracts X X X X
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