2013 (11) TMI 314

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....old shares at a loss, whereby, claiming loss on the sale of the shares. As per the details filed, it is seen that the assessee company sold 50,000 shares of the AAA Steel & Energy (I) Ltd. at Rs. 5,00,000/- and another transaction, sold 37,850 shares of Deepak Hotels Pvt Ltd at total consideration of Rs. 1,09,76,500/-. According to the AO, the assessee deliberately booked a loss of Rs. 45,00,000/- and Rs. 18,925/- in these transactions. The AO, therefore, disallowed a total loss claimed at Rs. 45,18,925/- holding them to be bogus and against the market trend. 3. The assessee accepted the disallowance of loss by not filing any appeal before the CIT(A). 4. In consequence of the assessment order, wherein, the AO had disallowed a loss of ....

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.... the said shares sold by it during the year under consideration and therefore, the Assessing Officer inferred that the assessee company had sold the said shares with an intention to book the losses. In this respect your honour's kind attention is invited to the returns of income of the assessee company for A.Y. 2009-10 and 2010-11 which are at pages 27 & 28 and 29 to 31 of the Paper Book filed before your honour. On perusal of the return of income for A.Y. 2009.10 at page 28 your honour will find that the assessee company is claimed carry forward of losses of A.Y. 2008-09 of Rs. 47,78,262/-. Similarly in the return of income for A.Y. 2010-11 also the assessee company is claiming carry forward of losses of A.Y. 2008-09 of Rs. 47,78,262/-. Wh....

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....ble Supreme Court held that even a wrong claim or disallowance would not automatically attract penalty, if the assessee has furnished complete details before the authorities. He, therefore, went on to delete the penalty, wherein, he held as under: "Considering the entirety of facts and circumstances, it is held that there was no case of furnishing inaccurate particulars of income or concealing particulars of such income. The appellant claimed loss on sale of shares in a good faith. Such claim was bonafide duly supported by the explanation that these two companies were non dividend paying companies, having no future prospect and no buyers of the shares of these two companies were available in the market and consequently the appellant's ca....

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....alance sheet and profit & loss account of the two impugned companies, whose shares, the assessee has sold at a loss. As has been held by the CIT(A), the book value could not be the sole criteria for deciding the fair market value of the shares sold. The co-ordinate Bench in the case of Rupee Finance & Management (P) Ltd., reported in 22 SOT 174, Mumbai, ITAT held that in case of transfer of shares to a group company at cost price, difference between fair market value of the shares and their cost price cannot be brought to tax as capital gains. Since, there being no material to show that the assessee had received more consideration then recorded in the books. In this case, the department took the case before the Hon'ble Bombay High Court, wh....