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TMI Blog2014 (3) TMI 625X X X X Extracts X X X X X X X X Extracts X X X X ..... bald statement, no evidence is produced to point out that the market value of the assets was much more than what is shown in the balance sheet – thus, there was no justification for the disallowance of capital loss – thus, the order of the CIT(A) set aside – Decided in favour of Assessee. - ITA No. 1942/Del/2012 - - - Dated:- 27-9-2013 - Shri G. D. Agrawal And Shri R. K. Gupta,JJ. For the Appellant : Shri A. K. Khurana, CA. For the Respondent : Shri M. B. Reddy, CIT-DR. ORDER Per G. D. Agrawal, VP : This appeal by the assessee is directed against the order of learned CIT(A)-XXXI, New Delhi dated 28th February, 2012 for the AY 2004-05. 2. As many as five grounds have been raised by the assessee. However, at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.Y. 2004-05 is placed at page no.28 of paper book. As per this chart it is clear that the appellant sold 401521 shares which was purchased by him in 1986-87, 1987-88 1999- 2000. These shares were sold against the cheque payment, the appellant received from his wife. Selling the shares to wife does not amount to a sham transaction. It is a genuine and actual deal of sale of shares at face value to wife and the loss occurred mainly due to indexation of the cost to appellant. The transaction between two relatives/family members, who are independent, not doubted about the genuineness of transaction by the Assessing Officer, can not be treated as an artificial loss. The shares are of a Private Limited Company and no dividend has ever been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Assessing Officer stated in its order that M/s Karma Lakelands Pvt.Ltd. has grown many folds and thus the sale of shares on book value between related parties is wrong. In this connection it is submitted that the company generated loss of Rs.38,92,546.47 as on 31/03/2004 as compared to profit Rs.4,82,420.66 for the year ended 31/3/2003. Copy of Balance Sheet of M/s Karma Lakelands Pvt.Ltd. is placed at page No.29-40 of paper book. The EPS of company is (-) Rs.2.49 as on 31/3/2004 as compared to as on 31/03/2003 Rs.0.82. So, there was not many fold growth in status of company M/s Karma Lakelands Pvt.Ltd. as stated by the Assessing Officer. The order of the A.O. is based on surmises and conjectures. 5. However, the CIT(A) rejecte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... net book value of the company has reduced between 31st March, 2003 to 31st March, 2004 and the break up value of the share is even less than the book value of the shares at which the assessee has sold the shares. The learned CIT(A) has upheld the action of the Assessing Officer on the ground that the transaction of sale of shares is a sham transaction. However, we do not find any evidence or basis for holding the sale of shares to assessee s wife as sham transaction. Merely because the transaction is between the relatives, it, per se, cannot be said to be sham or bogus transaction. At the time of hearing before us, it is stated by the learned CIT-DR that the company M/s Karma Lakelands Pvt.Ltd. has substantial agricultural land, its value h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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