2011 (11) TMI 89

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..... on of unquoted shares to Rs.1,71,000/- by totally ignoring the value as itself declared by the assesse." 2. The assessee is a company engaged in the business of sale and purchase of shares, dividends and securities. The Assessee filed income tax returns for the year 2002-03 under Section 143(1) of the Act. The return was put under scrutiny and a notice under Section 143(2) and 142(1) along with questionnaire was issued to the assessee. In the return, the assessee company had shown having sold 2255500 unquoted equity shares of various companies held by it for a total sum of Rs.1145090/-. On perusal of the details by the Assessing Officer, it came to be revealed that all those unquoted shares were sold @ Rs.5 per share. The AO held that all .....

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..... n brought on record, which suggest that AO has relied upon on some creditable information/ piece of evidence in proving the addition of Rs.4,59,75,201/-" 3. The revenue is in appeal against the impugned order of the Tribunal. There was no dispute with regard to the fact that all the shares which were sold by the assessee were unquoted. As per the assessee, these shares were sold at the mutually agreed price and sale of these shares was necessitated due to business obligations of the assessee as it had made investments in TRI, and Haryana Fiber Limited which were more demanding and beneficiary for the assessee. There is also no dispute with regard to the fact that all these shares which were sold were stock in trade of the assessee as it wa .....

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..... fficer sought to tax the assessee therein after computing the profits earned by that firm on the basis of the market price of the goods sold and not the actual price at which those goods were sold. The assessee challenged the said basis. The Tribunal upheld that contention of the assessee. It came to the conclusion that the assessee had, in reality, made no profits at all. The High Court agreed with the conclusion reach by the tribunal. It opined that, in the absence of any evidence to show either that the sales were sham transactions or that the market prices were in fact paid by the purchasers, the mere fact that the goods were sold at a concessional rate to benefit the purchasers at the expense of the company would not entitle the income .....

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