TaxTMI 
TaxTMI 
2014 (1) TMI 926
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.... Officer erred in holding that the Appellant did not file documentary evidence for the cost of acquisition of the shares of SET Singapore without appreciating the fact that the Appellant did not get adequate time to furnish the documents, as the request for the same was first made on December 15, 2009 and the time given was too short as the draft order was passed on December 18, 2009. 3. Notwithstanding Ground 1 above, the learned members of the Dispute Resolution Panel -1 ('DRP'), after considering the documentary evidence that was subsequently filed by the Appellant with them, in respect of the cost of acquisition of the shares, have erroneously ruled that the Appellant provided no Sound reason for entering into a transaction, which resulted in LTCL of Rs. 52,34,57,196 and that no prudent businessman would have entered into such a transaction. 4. Notwithstanding Grounds 1 to 3 above, the learned members of the DRP have questioned the basis of valuation of the shares of the overseas company, i.e. SET Singapore, arguing that this impacts the swap ratio arrived at by the two companies: SET Singapore and SET India, for issuing share....
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....rmining the income of the assessee at Rs. 79.85,92,040/-. 2. During the assessment proceedings AO found that the assessee had claimed carry forward of long term capital loss of Rs. 52,34,57,196/- u/s 74 of the Act to be set off against the long term capital gains of subsequent years, that the assessee held 5,02,430 share of SET Satellite (Singa - pore) PTE Limited ('SET Singapore'),that 0n May 13,2006, the assessee received 31,402 shares of SET India Private Limited ('SET India') as an exchange for 5,02,43,051 shares held in SET Singapore (in the ratio of 1 share of SET India for 16 shares held in SET Singapore) as a result of acquisition of 100% shareholding of SET Singapore by SET India, that the long term capital loss on exchange transaction has been computed by the assessee at USD 1,16,81,705 after deducting the cost of acquisition of 502,430 shares of SET Singapore of USD 1,28,76,865 from total sale consideration of USD 11,95,160,that long term capital loss at USD 1,16,81,705 had been converted into INR 52,34,57,196 as per the provisions of Rule 115 of the I.T. Rules 1962.AO directed the assessee to file the documentary evidences in respect of long term capital loss along wit....
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....Taxman 282, Cal.HC.),Continental Construction Ltd.(226ITR281).Departmental Representative (DR) submitted that loss claimed by the assessee was result of valuation,that AO was entitled to make inquiries about the loss. 2.3 We have heard the rival submissions and perused the material. We find that swapping of shares was approved by an agency of Govt. of India i.e. FIPB and it had approved the ratio of shares to be swapped. In these circumstances to challenge the prudence of the transaction was not proper. In our opinion, even if the transaction was not approved by the Sovereign and it was carried out by the assessee in normal course of its business AO/DRP could not question the prudence of the transaction. Genuiuness of a transaction can be definitely a subject of scrutiny by revenue authorities, but to decide the prudence of a transaction is prerogative of the assessee. A decision as whether to do /not to do business or to carry out / not to carry out a certain transaction is to taken by a businessman. If it is proved that a transaction had taken place, then resultant profit or loss has to be assessed as per the tax statutes. Therefore, in our humble opinion by casting doubt about ....
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....income, that in order to set off the Short term capital loss against the Short term capital gain there should be Short term capital loss and Short term capital gain on computation made u/s 48 to 55 arising from sale of short term capital assets, that the assessee was entitled to have the amount of such Short term capital loss set off against the Short term capital gain, if any, as arrived under a similar computation made for the assessment year under consideration.AO further referred to section 111A and 115AD of the Act in this regard. 3.1 Before us, AR submitted that in view of provisions of section 70(2)of the Act assessee had an option to set off a Short Term Capital Loss against any other Short Term Capital Gain, that language of section 70(3)supported the said view of the assessee ,that sections 111A and 115AD fell in Chapter XII of the Act, that both the sections dealt with rate of tax and not with computation of income under a particular head, that computation of capital gains was governed by the provisions of section 48 of the Act. He relied upon the order dated 11.04.2012 of the ITAT Mumbai, delivered in the case of DWS India Equity Fund (ITA5055/Mum/2010-AY.2007-08). DR ....