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TMI Blog2014 (8) TMI 805X X X X Extracts X X X X X X X X Extracts X X X X ..... erm capital loss of Rs. 62,73,440/-". 1.2 While doing so, the CIT(A) erred in: (i) basing her action only on surmises, suspicion and conjecture; (ii) taking into account irrelevant and extraneous considerations; and (iii) ignoring relevant material and considerations as submitted by the Appellant. 1.3 It is submitted that in the facts and the circumstances of the case, and in law, no such disallowance was called for. 2.1 The ld. CIT(A) erred in directing the AO to examine the taxability of Rs. 62,73,440/- in the hands of the Director under section 28(i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see decided to sell the flat to its Director at the market rate. The assessee further submitted that in so far as the Director, Mr K Narayanan was concerned, he still holds the flat as his investment. 5. This explanation of the assessee did not impress the AO, who observed that the flat was acquired by the company through its director, who was authorized to negotiate the purchase. He also observed that the assessee later on sold the same flat to the same director at a lesser consideration. According to the AO, the assessee has simply taken a route to book loss in its books of accounts. 6. The AO also did not get impressed with the theory of economic meltdown world over. The AO simply came to the conclusion that it was a profit reducing de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Govt. of Maharashtra has not shown any downward revision in the property price during the fall of BSE sensex. The appellant also at the time of appellate proceeding has produced no evidence to show that the fall in BSE sensex led to fall in property prices. Thus the appellant's contention that the sharp fall in valuation of property threatened to erode small equity base of appellant company which was only Rs. 5,01,000/- is also not supported by any evidence as it is noticed that the company even in this precarious environment was able to pay off the loan of Rs. 2 crores to the Director, Shri K. Narayan, to purchase the property in question from the company. So what the company got from right hand was taken by the director from left ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e revenue authorities and submitted that on the fact of transaction, it is sham and hence the claim was rightly rejected. 15. We have heard the arguments and have perused the documents appended in the APB, which says that the papers were submitted before both the lower authorities. From the documents, it is clear that the assessee purchased the flat from DSD Builders and Developers through its director Mr. K. Narayanan. In our opinion the revenue authorities erred in observing that the assessee bought the flat from Mr. K. Narayanan and sold the same flat to Mr. K. Narayanan. It is obvious that the company, though a separate entity for all legal aspects, but it acts through its directors. In the present set of circumstances, Mr. K. Narayana ..... X X X X Extracts X X X X X X X X Extracts X X X X
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