TaxTMI 
TaxTMI 
2016 (9) TMI 1152
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....12.2007 for assessment year 2005-06. Solitary interconnected grounds raised by the assessee per its appeal are as under:- "1. That the order passed by the Ld Assessing Officer as well as Ld. C.I.T.(A) is arbitrary, imaginary without any basis and illegal. 2. That the Ld. C.I.T.(A) has erred in confirming the disallowance of short term capital loss of Rs. 5681304/- which was disallowed by the Ld Assessing Officer only on the basis of that the stock broker has been suspended by the SEBI, which is totally against the fact and law also. 3. That the Ld. C.I.T.(A) has erred in confirming the disallowance of short term capital loss of Rs. 5681304/- which was disallowed by the Ld Assessing Officer observing that the short....
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....p; Inwards Outwards Loss Globe stock 43,32,152/- 12,47,803/- 30,84,354/- Pslfinance 4,97,725/- 49,300/- 4,48,425/- Limtxinv 9,89,900/- 1,24,700/- 8,65,200/- Sangocon 15,75,340/- 2,92,080/- 12,83,260/- During the assessment proceedings, AO observed that sale/purchase of shares of M/s Globe Stock and Securities Ltd. has been banned by SEBI and investigation is carried out against the other companies as stated above by SEBI. It was also observed that the broker M/s Rajendra Prasad Shah through whom the transactions in the share of above companies were carried out by the assessee was also suspended by SEBI. The relevant contract notes were sent to Kolkata Stock Exchange (KSE ....
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....nt through account payee cheque therefore no disallowance by holding the aforesaid transactions as bogus is warranted However, Ld. CIT(A) has disregarded the claim of assessee and upheld the action of AO by observing the following facts:- (a) Share broker, M/s Rajendra Prasad Shah did not provide the details of the buyers and sellers of the share of aforesaid company, therefore the activities were suspended as the broker, M/s Rajendra Prasad Shah deliberately was not providing the details of buyers and sellers which are mandatory in nature. The said broker was suspended for the activity of share done in the earlier year period also; (b) It was noted from the date-wise chart of the price of the unquoted sharescrip of the af....
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.... assessee in support of the transactions. We also find that there were entries for the sale purchase of the shares in the bank statements, contract notes, dmat account of the assessee. In our considered view we find that the assessee has proved the transaction on the basis of documents and therefore the suspension of the broker by SEBI will not hold the transaction in valid. In this connection we are putting our reliance in the judgment of Hon'ble jurisdictional High Court in the case of Commissioner of Income Tax vs. Korlay Trading Co. Ltd. (1999) 152 CTR 0017 : (1998) 232 ITR 0820, the head note of the case reads as under : "Business income-Loss on sale of shares-Genuineness of transaction doubted-Assessee by furnishing name of c....