2015 (6) TMI 943

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....ss of Rs. 80,03,910/-. The case was selected for scrutiny and thereafter the assessment was framed under section 143(3) vide order dated 20.10.2010 and the total income was determined at Rs. 8,08,300/-. Aggrieved by the order of A.O., Assessee carried the matter before ld. CIT(A) who granted partial relief to the Assessee. Aggrieved by the aforesaid order of ld. CIT(A), Assessee is now in appeal before us and has raised the following grounds;- 1. The Order passed by A.O. and partially confirmed by Learned CIT(A) is bad in law and on facts and hence requires to be quashed. 2. The Learned A.O, and C.I.T. (A) have erred in treating the loss of Rs. 88,12,209/- arising out of sales of share of one of the scrips as capital loss as against tradi....

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....und acceptable to the A.O for the reason that in the tax audit report submitted by the Assessee, it was stated by the tax auditor that there was no conversion of capital assets into stock in trade during the year under consideration. Considering all the aforesaid facts, A.O concluded that the loss on sale of equity shares of RPG Life Sciences Ltd amounting to Rs. 88,12,209/- was a "long term capital loss" and cannot be considered as a business transaction and therefore cannot be adjusted against the business income in view of the provisions of Section 71(3) and 74(1) of the Act. He accordingly disallowed the adjustment of loss against the business income. Aggrieved by the order of A.O., Assessee carried the matter before ld. CIT(A) who uphe....

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....ued at cost. The shares were purchased for a consideration of Rs. 2,37,00,000/- and were shown i.e. at cost in accordance with the accounting policy for valuation of the investment. The fact that the shares have been bought in preferential allotment is also an indicator that this was intended to be an investment. Therefore, the A. O. was justified in treating the loss arising out of the sale of these shares as capital loss and not as trading loss. The ground of appeal is, therefore, dismissed. 4. The fifth ground of appeal is regarding set off of carried forward business loss. Perusal of the assessment order shows that the A. O. has not given any finding regarding non-allowance of set off of. carry forward business loss. However, he is dir....

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.... Life Sciences Ltd. which were allotted to the Assessee on 23.02.2006. From the perusal of the Balance sheet as on 31st March, 2007, it is seen that the shares of RPG Life Sciences Ltd of Rs. 2.37 crores are reflected under the head of "investment" and are valued at cost which is also in line with the accounting policies (as reflected in the annual accounts and placed at page 29 of the paper book,). On the other hand, if the Assessee had treated the shares of RPG Life Sciences Ltd. as part of stock in trade, as is the submission before us, then it should have valued the shares at closing market rate or cost whichever is lower which is the policy adopted by Assessee for value stock in trade. The submission of the Assessee that at the expiry ....