TaxTMI 
TaxTMI 
2010 (4) TMI 1143
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....oper appreciation of observation of AO and the materials brought on record during the course of assessment." 3. Brief facts of the case are that, the Karta of the assessee is a share broker and was a member of the CSE/National Stock Exchange during the relevant year. The assessee earned income from house property, capital gain and income from other sources. The assessee filed its return of income declaring total income of Rs. 22,47,450/-. The AO completed the assessment at total income of Rs. 37,68,500/- by making disallowance of Rs. 15,29,049/- being the short term capital loss. At the time of assessment the AO found that, during the relevant previous year, the assessee has incurred capital loss to the tune of Rs. 15,29,049/- on sale of....
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....ed about the fate of the transaction or the manner in which brokers have completed the transactions. It was also submitted before the AO that the assessee has purchased shares which were credited in the Demat account and the payments were made through account payee cheques. Similarly the shares were delivered on sale through Demat account and the consideration was received by cheque. However, the AO was not convinced with the submission of the assessee and after making several observation he disallowed the capital loss to the extent of Rs. 15,29,049/- by observing as under : (i) In the case of scrip of Nageshwar Investment, the transaction was not carried out on the on-line system of the Exchange. The share of Easum Capital was....
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....fter elaborate explicit discussion, considering all the materials on record, and after confronting the assesse's argument has disallowed capital loss of Rs. 15,29,049/- . The Ld. CIT(A) on the other hand, without proper appreciation of the argument put forward by the AO during passing the order u/s. 143(3) has held that the loss incurred by the assessee on sale of shares listed on CSE was a genuine trading loss and directed to delete the additions. He lastly urged before the bench to set aside the order of the Ld. CIT(A) and restore that of AO. 5. On the other hand, the Ld. Counsel for the assessee relied on the order of the Ld. CIT(A) and urged before the bench to confirm the same. 6. We have heard the rival submissions, perus....
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....f these shares through registered share brokers of Calcutta Stock Exchange and they have issued the contract note which have already been submitted. The consideration for the purchase and sale of these shares has been paid/received through the banking channels. The copies of bank statements have also been submitted. Further, on purchase of these shares, the delivery was taken in Demat account and similarly when share was sold the delivery to the respective brokers has also been given through the Demat account The copy of Demat account was also submitted during assessment proceedings. However, the submission of the appellant was not acceptable to the AO and after making several observations in the assessment order, he has disallowed the capi....
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....appellant is concerned only about the receipt of shares on purchase and delivery of shares to the broker on their sale. The AO has not brought anything on record to prove that there was any connivance between the appellant and share brokers. The AO has further observed that the companies in which the appellant has invested were not worth investing as those companies had small profit/loss and small capital base. The appellant in place of buying these shares, could have purchased shares of better companies at the prices at which he had purchased shares of small companies. In this regard, I intend to agree with the appellant that the AO cannot dictate his terms or impose his thoughts on the appellant that what he should have done and what n....
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....rips. I find that nowhere the Stock Exchange has mentioned that the transactions in these scrips were not carried out by the brokers who have issued the contract notes to the appellant. In view of the above, I am of the opinion that the AO was not justified in disallowing the capital loss of Rs. 15,29,049/-." Subsequently, the Ld. CIT(A) discussed the following case laws : "i) ITO -Vs- Raj Kumar Agarwal, ITA No. 1130/Kol/2007 (Kol), ii) Mukesh R. Marolia -Vs- ACIT (2006) 6 SOT 247 (Mum), iii) ACIT -Vs- Swapan Kumar Biswas, ITA No.121/Kol/2008 iv) DCIT -Vs- Shri Bhagwati Prasad Agarwal, ITA No.1230/Kol/2008. v) Shri Jaywant Himani -Vs- ITO, ITA No.340/Kol/2007, vi) Shri Ac....