TaxTMI 
TaxTMI 
2019 (5) TMI 852
X X X X Extracts X X X X
X X X X Extracts X X X X
....(3) of the Income Tax Act, 1961; in short 'the Act'. Heard both the parties. Case file(s) perused. 2. Both the Learned representatives are fair enough during the course of hearing that all issues raised in the instant three cases are identical in nature. We have heard the instant "lis" together. The same are disposed of by our detailed adjudication. 3. The Revenue's identical first substantive grievance challenges correctness of CIT(A)'s order reversing Assessing Officer's action disallowing assessee's Long Term Capital Loss (LTCL) of shares sale amounting to Rs.6,07,02,817/- and Rs.20,95,69,036/-; respectively. Its case is that the CIT(A) has erred in law and on facts in taking into consideration assessee's submissions without cognizance of break-up value of the shares sold. Our attention is invited to identical findings the CIT(A)'s detailed discussion as under:- "The impugned matter has been dealt by the Ld. AO as under: On investigation, during the curse of the scrutiny assessment, it is found from the return, computation and audited accounts filed in the course of the assessment proceedings that the assessee has claimed Short Term Capital Gain on ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....,55,758) - sale price Rs. 6,73,47,100] occurred in the transaction of above share. The AR of assessee has stated, in compliance to our query that the above transaction was made through off market but the transfer of share was duly reflected in the books of both the company's The above submission has been considered but the same is not treated as convincing and tenable. Since the assessee fails to establish how the sale value of share was determined since the book value became negative as submitted by the AR of the assessee. In view of the nature of transaction, the manner in which it is undertaken and the surrounding circumstances clearly show that the transactions of Usha Communications. In view of above discussion it is held Tech Ltd is nothing but internal arrangement among own group companies to create artificial loss. In view of above discussion it is held long term capital loss to the tune of Rs. 4,47,88,034/- is not genuine and therefore the said loss is disallowed and the carried forward loss is recalculated accordingly. As such on account of above disallowance of Long term Capital Loss (without STT) net gain arises under this (L....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... itself were found to be illegal. In these facts of the case, Hon'ble Supreme Court held that avoiding taxes by means of illegal transactions adopting dubious method giving them the shape of legality would be colourable device. Further, Ld. AR sub mitted that it is for the assessee to arrange its affairs in a manner which reduces its tax liability./ so far the assessee does not violate the provisions of any statute, the transactions resulting in reduction of taxes could not be termed as "colourable devise" as envisaged in the case of McDowell And Co Ltd. (supra). 6. On the other hand, Ld. DR vehemently relied on the orders of authorities below. 7. From the aforesaid discussion, we find that assessee has sold shares to its group company and booked a loss of Rs.56,76,211/- under the head "capital gains". The Assessing Officer found that the purpose of selling share at a price less than market value / book value was to escape from the tax liability therefore, it was disallowed by AO. However, from, the above facts, we understand that genuineness of the transaction of sale and purchase of share with assessee and buyer-company has not been doubted by AO. The ld. DR....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the difference between the market value and the price on which the shares were sold by the assessee, in our opinion, was not correct. We are of the view that the Tribunal rightly upheld the finding of the Commissioner of Income-tax (Appeals). It is not a case where any understatement of value or misstatement of value of the shares sold was made by the assessee. This is a case where the assessee had sold the shares at a value admittedly lower ITA No.847/Kol/2013 A.Y 2009-10 Usha Martin Ventures Ltd. v. DCIT Cir-6 Kol page 7 than the market price. Yet the shares could not be assessed on the difference amount being her income because no inference can be drawn in the facts and circumstances of the case that the design of the assessee was such that she concealed certain facts and she received the difference of the value by fraudulent means.. There was no evidence direct or inferential, nor was there any finding by any income-tax authority that the as indulged in such a practice. We are fortified in our view by a judgment of the Supreme Court in the case of CIT v. Shivakami Co. Pvt. Ltd. [1986] 159 ITR 71 (SC) We also find support in our view from a Division bench judgement of the Bomba....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d not claimed any depreciation regarding land in question by including in their respective block of assets for the purpose of computing depreciation. He has directed the Assessing Officer to verify the relevant fact in this regard. We conclude these peculiar facts that the Revenue cannot be held to be an aggrieved party against the CIT(A)'s findings at this stage since the issue is very much open before the Assessing Officer as to whether assessee had included the relevant land in their block of assets or no so as to attract sec. 50 of the Act. The Revenue's identical substantive ground raised in both the appeals fails therefore. 7. Lastly comes the third identical issue of correctness of sec. 14A r.e.s. 8D disallowance amounting to Rs.3,10,94,241/- and Rs.44,45,663/- (assesseewise); respectively. It transpires that the co-ordinate bench (supra) also finds that Assessing Officer had nowhere recorded any satisfaction stipulated u/s14A(2) of the Act. There is no dispute about these two assessees to have derived exempt income in principle in the relevant previous year. The sole question herein is that of computation of corresponding disallowance. The Assessing Officer arrived at a ....