TaxTMI 
TaxTMI 
2009 (7) TMI 880
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....t the return of income of Rs. 68,65,870. The CIT on perusing the records found that the assessee has claimed loss on account of revaluation of closing stock of debentures and shares to the extent of Rs. 39,90,279. The CIT found that for the asst. yr. 2000-01 the assessee had disclosed short-term capital gain of Rs. 18,53,302 from sale of shares and there was no stock-in-trade of shares and securities in the accounting year relevant to 2000-01. Therefore, he concluded that the assessee did not carry out any business in share trading in the financial year relevant to the immediately preceding assessment year viz., 2000-01. He also felt that there was no systematic and regular activity of purchase and sale of shares in the case of assessee dur....
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....the loss of Rs. 39,90,279 claimed by the assessee and allowed by the AO. 5. Aggrieved the assessee is on appeal. In brief, the contention of the assessee is that from the asst. yr. 2001-02 they have clearly shown the purchase and sale of shares as business and have been valuing closing stock at cost or market value whichever is less. From the paper book furnished before us we find that in the audited balance sheet for the asst. yr. 2001-02 filed before the AO it has been clearly mentioned that purchase of shares and debentures valuation of Rs. 42,31,074.18 has been debited to P&L a/c. The closing stock of shares and debentures has also been mentioned in the balance sheet as having been valued at Rs. 2,28,975 being at cost or market price w....
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....and securities as stock-in-trade from this year. This has also been consistently followed in the subsequent years and has been accepted by the Department. Hence the intention and motive of the assessee, being a proprietary concern and reflected in the books of account cannot be questioned unless there are any clear facts or claims made by the assessee which are contrary to the above intention and stand of the assessee. Therefore the order of the AO accepting the claim of the assessee for deduction on account of fall in value of shares and securities as reflected in the balance sheet cannot be faulted. In the circumstances the claim of the assessee clearly reflected in the balance sheet and return of income and accepted by the AO cannot be s....