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TMI Blog2019 (2) TMI 1577X X X X Extracts X X X X X X X X Extracts X X X X ..... r of Income Tax (Appeals) -6, Mumbai (hereinafter referred to as the CIT(A)) erred in upholding the action of the Assistant Commissioner of Income Tax, Circle - 2(3)(2), Mumbai (hereinafter referred to as the Assessing Officer) in disallowing the loss of Rs. 11,87,26,561/- being loss under the head "capital gains" arising on account of sale of shares of SQL Star International Limited, being long-term capital asset on the ground that the transaction of sale of such shares is not genuine. The appellant contend that on the facts and in the circumstances of the case and in law, the CIT(A) ought not to have upheld the action of the Assessing Officer in not allowing the claim of loss under the head "Capital gains" on the sale of aforesaid share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndividual namely Shri Parag Dharamshi Sheth for a total sale consideration of Rs. 24.75 lakhs, computed @ Rs. 1/50 per share. The net Long-Term Capital Loss [LTCL] after allowing indexed cost of acquisition worked out to Rs. 1187.26 Lacs, the set-off of which was claimed against Long-Term Capital Gain of Rs. 529.73 Lacs earned by the assessee during impugned AY. Accordingly, the assessee was asked to furnish the supporting documentary evidences in order to prove the genuineness of the transactions. 2.3 The assessee submitted that SQL was delisted from BSE and it was loss-making company and therefore, the shares were sold at discounted price in an off-market transaction since there was no purchaser of these shares in the market. However, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3.2 The assessee agitated the remand report, inter-alia, on the ground that transaction was an off-market transaction without involvement of any broker / stock exchange and the same was duly supported by two delivery instruction slips and sale note dated 15/03/2014 which has been accepted by the purchaser. The attention was drawn to the demat statement to substantiate the delivery of shares. It was also contended that another similar off-market transaction which generated gains for the assessee during impugned AY was accepted by Ld. AO and therefore, the contrasting stand on the part of Ld. AO was not justified. 3.3 After due consideration of remand report, assessee's rebuttal and factual matrix, Ld. CIT(A) noted that sale consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee on 28/06/2018 from an entity namely Excel Corporate Services Pvt. Ltd. acting on behalf of the purchaser which would dispel the doubts raised by the revenue as to genuineness of the transactions. Per Contra, Ld. CIT-DR submitted that corroborative evidences furnished by the assessee were inadequate which do not inspire confidence to treat the transactions as genuine transaction and therefore, the stand of first appellate authority was justified. 5.1 We have carefully heard the rival contentions and perused the relevant material available on record including documents placed in the paper-book. The undisputed position that emerges is that the assessee, holding substantial shareholdings in SQL, is stated to have sold certain number ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04/2014. The amount of Rs. 24.75 Lacs receivable from purchaser is reflected by the assessee in its Balance Sheet for impugned AY under the head other receivable and the books of accounts have duly been audited under law. The aforesaid sequential events lead us to form an opinion that the ownership of the share was, in fact, transferred by the assessee during impugned AY itself and the sale transaction was duly recognized by the assessee as well as the purchaser. The revenue has doubted the transaction primarily on the ground that the sale consideration was not received by the assessee during impugned AY and therefore, the transaction was merely a sham transaction. However, nothing on record suggest the same. It is trite law that addition c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... price of listed shares, in our opinion, are governed more by demand-supply factors and therefore, the sale consideration could not be rejected by revenue merely by suspecting the same without bringing on record any material to corroborate the fact that the price of the shares at relevant time was on the higher side. 5.4 Keeping in view the above facts and circumstances, we are of the considered opinion that the stand of first appellate authority in rejecting the assessee's Long Term Capital Loss could not be sustained. We order so. The appeal stands allowed. SA No. 534/Mum/2018: 6. Since we have decided the assessee's quantum appeal against which this stay application has been filed, the application becomes infructuous and therefore, sta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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