Share sale valuation mismatch cannot justify addition where Form 10DB reflects STT methodology, not actual contract note price

The addition based on an alleged undervaluation of share sale consideration was unsustainable because Form 10DB figures were generated for Securities Transaction Tax purposes using the broker's methodology and volume weighted average price, not as the actual sale price recorded in the contract notes. The mismatch arose from comparing delivery and non-delivery or speculative transactions on an inconsistent basis, and the Revenue did not rebut the assessee's reconciliation. On that footing, the adjustment was deleted and relief was granted to the assessee.

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Issues: Whether the addition of Rs. 1,52,000 made on the footing that the sale value of Ceat Limited shares was undervalued by comparing the contract note values with Form 10DB values was sustainable.

Analysis: The assessee demonstrated that the figures in Form 10DB were derived for Securities Transaction Tax purposes on the basis of the broker's methodology and Volume Weighted Average Price, and were not the same as the actual sale consideration recorded in the contract notes. The apparent difference arose because delivery and non-delivery/speculative transactions were being compared on an inconsistent basis. The Revenue did not controvert the reconciliation furnished by the assessee.

Conclusion: The addition was not sustainable and was deleted, resulting in relief to the assessee.

Final Conclusion: The assessed adjustment based on the alleged mismatch between contract note values and Form 10DB values could not survive, and the assessee's appeal succeeded.

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