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TMI Blog2014 (5) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... made by the Assessing Officer which came to be deleted by the CIT (Appeals) and confirmed by the Tribunal, which additions were made on account of the loss booked by the assessee in sale of shares which were off market transactions. The second issue pertains to disallowance made by the Assessing Officer under section 14A of the Income Tax Act, 1961 ('the Act' for short) which also came to be deleted by the CIT (Appeals) and confirmed by the Tribunal. So far as the first issue is concerned, facts in brief are as under: Respondent of Tax Appeal No.1003 of 2013 and other connected appeals is one Prudent Finance Pvt. Ltd, a company registered under the Compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be allowed. The Assessing Officer observed that whenever sales were made to other entities, they were not followed by cheque receipts. Similarly when purchases were made from other entities, they were also not followed by cheque payments. He concluded that the assessee carried off market transactions by simple purchase bills or sales bills ignoring market rates. This was done to avoid tax. The assessee carried the matter in appeal. Before the CIT (Appeal), the assessee gave detailed written explanation to the various issued raised by the Assessing Officer in the order of assessment. On behalf of the assessee, it was contended that the transactions were genuine. Even the Assessing Officer had not questioned the factum of the transacti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... establish that the transactions of the appellant with the parties listed by the Assessing Officer in her order were legitimate and genuine off market transactions and I also agree with the appellant's contention that the Assessing Officer in contravention of section 132(4), selectively chose the losses for disallowance treating them as non-genuine whereas in the same set of transactions the profits were treated as genuine. In view of these, therefore, the disallowance of losses made by the Assessing Officer is uncalled for and is deleted." Revenue carried the matter in appeal before the Tribunal. The Tribunal by the impugned judgment, upheld the decision of the CIT (Appeals). The Tribunal rejected the Revenue's objection that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion was about the genuineness of the transactions. The fact that the transactions did take is not in dispute. Revenue seems to be contending that the transactions were deliberately attempted to create loss/profit in order to transfer such corresponding loss/profit to the related parties to avoid legitimate tax liabilities. However, the CIT (Appeals) as well as the Tribunal have both concurrently held that there was no material before the Assessing Officer to come to such a conclusion. In particular, the order of the Tribunal is elaborate and exhaustive. The Tribunal has taken note of the three principal concerns of the Assessing Officer. We find that the allegation that the transactions were not at market rate has been dispelled by the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as provided by the assessee regarding market rate on the date of transaction then also, market rate of a particular share on a particular date is easily verifiable independently from the website of Bombay Stock Exchange (BSE). The assessee has furnished the print out of stock prices from such site of BSE before us in respect of various transactions and from the same, it is seen that the transactions carried out by the assessee in respect of these 'off market transactions" is very much at market rate. For example, in respect of AY 2004-05, the assessee purchased 9400 shares of HCL Tech on 25/03/2004 @ Rs.265.90 per share having total purchase value of Rs. 24,99,460/-. The market rate of the shares of HCL Tech on 25.3.2004 were opening Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t transactions" are not at market rate is baseless and is to be rejected.' Additionally, we also note that necessary entries were made in the account books of both sides, i.e. purchaser and seller and delivery receipts were also passed demonstrating contemporaneous sale and purchase of the shares. It is not even the case of the Revenue that such off market transactions were not permissible. When we find that off market transactions were permitted in law, that there was no evidence to suggest that artificially they were sold at rates lower than the prevailing market rates and we further find that the Assessing Officer could not bring on record any material to show that the transactions were shown to be deliberately back-dated, the findi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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