2015 (9) TMI 646

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....shares, as not genuine. 3. Briefly stated, the relevant material facts are like this. During the course of assessment proceedings, the Assessing Officer noted that the assessee had sold shares, in Swastika Coal Corporation, at Rs. 5/- whereas these shares were purchased at Rs. 8.89/-. Similarly, the assessee had sold shares in Subala Trading Co., at Rs. 10/-, whereas these shares were purchased at Rs. 100/-. The Assessing Officer required the assessee "to justify the above transactions, with supporting evidences". The explanation given by the assessee did not satisfy the Assessing Officer, as the Assessing Officer was of the view that "the assessee has failed to justify that which type of financial crises had compelled it to sell the sha....

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....o tried to reduce its tax liability by showing this transaction. During the year under consideration, assessee has earned income of Rs. 38,89,410/- from interest whereas loss was shown on share transactions. After deducting expenses like salary, interest payment & depreciation from interest income, substantial income was likely on which Income-tax was required to be paid by the assessee. During the course of assessment proceedings, the A.R. of the assessee company was also to submit the book value of shares of these companies. However, he failed to submit till date. The book value at the time of purchase of shares and the time shall of shares of there companies are not submitted till date. By doing manipulation in sale price of shares it ha....

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....shares at a price much below purchase price and appellant did not furnish book value of the shares sold even on specifically asking for the same. AO had further observed that appellant could not substantiate its claim of financial crisis and no prudent person would sell shares at such huge loss without reference to intrinsic value of shares. Explanation below section 73 was invoked by the AO only as an alternate reason to make the addition/disallowance. Appellant has thus, not really challenged the substantive addition made by the AO. Appellant has also not made any attempt, whatsoever, either before the AO or during appellate proceedings to substantiate its claim of financial crisis or demonstrate the sale price to be the break up value/bo....

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.... in the present case are unrelated persons, having no influence on each other. There is nothing more than the fact of loss which is put against the bonafides of transactions. In our considered view, on the facts of this case and without any corroborative factor pointing towards lack of bonafides, the loss incurred by the assessee cannot be held to be not genuine. There has to be something more than suspicion to come to this conclusion. While examining a claim of the assessee, it is not for us to ponder over what must happen in an ideal situation, but we have to examine whether the explanation of the assessee has any infirmities or inconsistencies, and, if not, we have to accept the same. 9. Viewed thus, we see no reasons to reject the lo....