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TMI Blog2015 (8) TMI 878X X X X Extracts X X X X X X X X Extracts X X X X ..... of assessee. - I.T. A. No. 258/AHD/2012 - - - Dated:- 13-8-2015 - SHRI RAJPAL YADAV AND SHRI ANIL CHATURVEDI, JJ. For The Appellant : Ms. Urvashi Shodhan, A.R. For The Respondent : Shri D.C. Mishra, Sr. D.R. PER ANIL CHATURVEDI, ACCOUNTANT MEMBER 1. This appeal filed by the Assessee is against the order of CIT(A)-III, Baroda dated 19.12.2011 for A. Y. 2004-05. 2. The relevant facts as culled out from the material on record are as under. 3. Assessee is a company stated to be engaged in the business of investment in shares, securities and finance. Assessee filed its return of income for A. Y. 2004-05 on 26.10.2004 showing total loss of ₹ 32,42,000/-. The case was selected for scrutiny and thereafter the assessment was framed under section 143(3) vide order dated 29.09.2006 and the total loss was determined at ₹ 28,23,332/- interalia by disallowing the claim of loss on sale of shares of Market Creators Ltd. . Aggrieved by the order of A. O., Assessee carried the matter before ld. CIT(A) who upheld the order of A. O. On the aforesaid disallowance that was confirmed by ld. CIT(A) A. O vide order dated 30.03.2010 was of the view that Assessee had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e computation of his total income have been disclosed by him. But in the present case, despite the fact that shares were shown as investment in the books of accounts as on 31.03.2003, the appellant claimed the loss resulting from their sale as business loss in its computation of income for the A. Y. 2004-05. Besides, the shares were sold at a much lower rate than the market rate to related persons to create an artificial loss, whose details came to notice only after the case was selected for scrutiny and investigations were made by the assessing officer. The appellant has failed to offer any explanation for treating the capital loss as business loss in its computation of income and also for sale of shares to related parties at a much lower rate than the market rate. The issues are not debatable at all. Thus, the appellant has made wholly unjustifiable and legally untenable claims. So far as other decisions, relied upon by the appellant are concerned, it is a settled law that no mens rea is required to be established before levying penalty u/s 271(l)(c). Moreover, there had been non disclosure of material facts in this case as discussed above. Also after insertion of clause of (IB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Co-ordinate Bench of Tribunal by holding as under:- 8. We have heard the rival submissions and perused the material on record. As referred to by the learned AR, ITAT Ahmedabad B Bench in ITA No.3432/Ahd/2010 for AY 2004- 05 in the case of Ergon Investments Finance (P) Ltd. dated 31-10-2011 has decided same issue(i. E., computation of capital gain on the sale of shares of Market creators Ltd. , on the basis of actual consideration received and not on the basis of alleged market value), in favour of the assessee relying on the decision of the case of Allure Investments Finance (P) Ltd. for AY 2004-05 in ITA No.3431 /And/2010 dated 5.08.2011 wherein it was held as under: 7. We have considered the rival submissions, perused the material on record and have gone through the orders of the authorities below as well as the judgments cited by both the sides. We find that as per section 48, capital gain has to be worked out after reducing the cost of acquisition of capital asset along with cost of improvement thereto and the expenses incurred on transfer of a capital asset from full value of the consideration received or accruing as a result of the transfer of the capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e where there is conversion of capital asset into stock in trade. It was noted by Hon'ble Gujarat High Court in paragraph 19 that counsel for the Revenue was unable to point out any other provision in which in a situation like the present case, the Assessing Officer could have made a reference to a valuer for ascertaining the fair market value of the assets in question as on the date of its transfer In the present case also, no provision in the Income tax Act has been brought to our notice as per which, market value can be considered for the purpose of computation of capital gain. Regarding the reliance placed by Ld. D. R. of the Revenue on the Judgment of Hon'ble Apex Court rendered in the case of Mcdowell Co. Ltd. vs. C. T. O. (supra), we find that in that case, the issue involved was regarding legal tax planning or Tax avoidance. In the present case, we find that even after addition made by the A. O. ₹ 4,19,504/-, the loss assessed by the A. O. is of ₹ 28,23,396/-. The facts of the present case do not indicate that there was any case of willful tax avoidance or tax evasion. Hence, in our considered opinion, the judgment of Hon'ble apex court rendered in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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