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TMI Blog2015 (10) TMI 2304X X X X Extracts X X X X X X X X Extracts X X X X ..... nsideration agreed between the parties with any fair market value or estimation. Only because the Pioneer Ltd. had shown the book value of shares at the rate of ₹ 3.50 per share, the Assessing Officer was not justified to ignore the price agreed between the parties and to doubt the genuineness of the claimed loss, even ignoring the valuation report. We thus while setting aside orders of the authorities below direct the Assessing Officer to delete the disallowance of ₹ 4,47,55,491 incurred on the sale of shares of the Pioneer Ltd. The issue is thus decided in favour of the assessee. - ITA No. 5335/Del/2012 - - - Dated:- 28-9-2015 - I. C. Sudhir And Inturi Rama Rao, JJ. For the Petitioner : Shri P C Yadav, Adv For the Respondent : Shri J P Chandrekar, Sr DR ORDER Per I. C. Sudhi , Judicial Member The assessee has impugned First Appellate Order on the following grounds: 1) That the order of the Learned CIT(Appeals) is bad in law and on facts. 2) Under the facts and circumstances of the case and in law, the Learned CIT(Appeals), has erred in holding that loss computed by the assessee in respect of sale of share of M/s. Pioneer Ltd. is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer observed that the said balance sheet was incomplete and did not contain any schedule and details. He, however, observed that the said balance sheet showed that the book value of shares was ₹ 3.50 per share. The Assessing Officer noted that the assessee had not attached any balance sheet of the Pioneer Ltd. as on 31.3.2009 nor furnished copy of income-tax return or other document of the said company. The assessee had also not furnished any document to show that the actual consideration of such sale of shares was ₹ 1 lac only. The Assessing Officer noted further that the assessee neither furnished copy of shares transferred deed nor any confirmation from the buyer stating the said consideration. The Assessing Officer accordingly held that the loss claimed by the assessee on sale of unlisted shares of Pioneer Ltd. remained unsubstantiated and unverified due to failure on the part of the assessee to place on record the relevant and necessary documents and added the claimed loss of ₹ 4,47,55,491 by way of disallowance. The Learned CIT(Appeals) has upheld the same. 5. In support of the grounds on the issue of genuineness of the claimed loss out of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g term capital gain or loss is to be computed in the manner laid down in section 48 of the Act as in the section the expression used is full value of consideration received or accrued , meaning thereby that there is no scope of any fair market value or estimation. The Learned AR submitted that there is no material on record on the basis of which it can be said that the assessee had received over and above agreed consideration. It is the settled position of law that in case of sale, the Assessing Officer has no power to replace the value of consideration agreed between the parties. In support, he placed reliance on the following decisions: 1. Nilofer Singh - 309 ITR 233 (Delhi); 2. George Handorson - 66 ITR 622 (S.C); 3. Gillanders Arbuthonot - 87 ITR 407 (S.C); 4. Morarji Textile Ltd. - ITA No. 1979/Bom/2009; 5. MGM Benefit Trust - ITA No. 316/Bum/2009 dt. 26.11.2009; 9. The Learned AR submitted further that the authorities below have overlooked the auditor s report of Pioneer Ltd. clearly showing the value of shares as on 31.3.2008 at ₹ 0.17 per share. In this regard, he referred page No. 25 of the paper book i.e. auditor s report. He submitted f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted further that there is no reason to doubt the genuineness of the claimed transaction. As per the provisions of sec. 70(2), a long term capital loss can only be set off with long term gain and not otherwise and in the year under consideration, there was no long term gain available with the assessee. Therefore, there was no ulterior motive of the assessee behind the transaction as has been alleged by the Learned CIT(Appeals). The assessee has lost the opportunity of carrying forward this loss in upcoming years by virtue of amalgamation. Therefore, it can be said that the transaction entered by the assessee was a bona fide and genuine transaction without any colorable device. The Learned AR also referred page Nos. 12 to 45; 43 and 44; 44A-56; 61 and 62, 73 to 90 of the paper book i.e. copies of auditor report along with balance sheet of Pioneer Ltd. for financial years 2007-08 and 2008-09, certificate of auditors regarding computation of share value, value analysis of shares done by P.W.C. of shares of Pioneer Ltd., shares certificate issued in favour of M/s. A.S.A. Agencies, shares certificate in favour of Epic Advisor; balance sheet of M/s. A.S.A. for assessment year 2009-10; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ethod, which is well accepted method under the provisions of Income-tax Act, 1961. It has been contended that the authorities below have overlooked that the shares were duly transferred in the name of other party and the consideration was received by cheque. Besides the contention of the assessee also remained that the long term capital gain or loss is to be computed in the manner laid down in section 48 of the Act wherein expression used is full value of consideration received or accrued . The main thrust behind this contention of the assessee was that there is no scope of any fair market value or estimation and in case of sale of shares, the Assessing Officer has no power to replace the value of the consideration agreed between the parties. The further contention of the assessee remained that the authorities below have completely discarded the valuation report of the valuer in respect of the value of shares, which report was prepared by the valuer applying NAV method. 18. We find substance in the above contention of the assessee that it is settled position of law that in the case of sale, the Assessing Officer has no power to replace the value of the consideration agreed betw ..... X X X X Extracts X X X X X X X X Extracts X X X X
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