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TMI Blog2010 (5) TMI 838X X X X Extracts X X X X X X X X Extracts X X X X ..... he sake of convenience. I.T.A. No. 1610/Mum/07 (A.Y. 2001-02): 2. This appeal was originally dismissed by the Tribunal for want of prosecution. Subsequently the Tribunal vide order dated 22nd October, 2009 recalled its order. Hence this is a recalled matter. 3. In grounds of appeal Nos. 1 to 4 the assessee has challenged the order of the CIT(A) in confirming the disallowance of short term capital loss of ₹ 4,58,770 made by the Assessing Officer treating the same as bogus and thereby disallowing set off of the same against short term capital gain. 4. Facts of the case, in brief, are that the Assessing Officer received information from DDIT (Inv.) Unit V(4), that the assessee had obtained bogus bills for purchase and sale of shares ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... does not render a non genuine transaction as genuine. The Assessing Officer further noticed that the assessee had earned short term capital gain of ₹ 5,41,585 prior to dealing with RSPL and in order to avoid payment of taxes on this short term capital gain, assessee had resorted to purchase of bogus bills from RSPL by creating the short term capital loss of ₹ 4,58,770. Therefore, Assessing Officer held that the claim of short term capital loss was not genuine as the transactions shown having been done with RSPL were to be treated as bogus. The Assessing Officer thereafter did not allow the loss of ₹ 4,58,770 to be set off against short term capital gain. 5. In appeal, the CIT(A) forwarded the additional evidences filed be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no evidence with the Stock Exchange was available about these transactions and since there is a very small gap of few days between the transactions, he came to the conclusion that the transactions were not genuine. He was of the view that the statement of Mr. Mukesh Chokshi recorded on oath u/s. 131 and his confirmation of the earlier statement given before the DDIT (Inv.) was a credible piece of evidence. Thus he was of the opinion that it was a case of taking short term capital loss to reduce the short term capital gain and consequently to evade the rightful payment of taxes. He accordingly upheld the action of the Assessing Officer in holding that the short term capital loss claimed at ₹ 4,58,770 was not a genuine transaction. Agg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 101 laid down the law that whereas a person who has given an affidavit was not cross examined, it would not be open to challenge the correctness of the statements therein. Here, Shri Chokshi was not allowed to be cross examined despite assessee's request nor was he cross examined by the AO vis-à-vis the affidavit. Therefore, in our opinion, AO could not have brushed aside such affidavit. On the other had, we find that Ld. CIT(A) had relied on the decision of this Tribunal in Mukesh R. Marolia's case which was factually of the same matrix except for the aspect relating to the affidavit given by Shri Mukesh Chokshi. Since the affidavit given by Shri Mukesh Chokshi was confirming the transactions with the assessee, in our opinion, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal, the learned CIT(A) upheld the action of the Assessing Officer. 10. We find the issue stands covered in favour of the assessee by the decision of the Hon'ble Bombay High Court in the case of CIT vs. Walfort Shares & Stock Brokers Pvt. Ltd., reported in 13 DTR 163. The Hon'ble High Court in the said decision has upheld the decision of the Special Bench of the Tribunal wherein it was held that the transactions of purchase and sale of units of mutual funds was a bonafide commercial transaction and not a colourable device adopted with a view to avoid the tax liability arising from the transaction and, therefore, liable to be set off against the taxable income of the assessee. In view of the decision of the jurisdictional High Court and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal Nos. 1 to 4 in I.T.A. No. 1610/Mum/07 and we have already decided the issue in favour of the assessee. Following the same ratio, the grounds of appeal Nos. 2 and 3 by the assessee are allowed in favour of the assessee. 17. Grounds of appeal No. 4 by the assessee reads as under: "The learned CIT(A) has erred in confirming the disallowance of deduction in respect of expenses claimed with regard to legal fees ₹ 20,000 without considering the facts of the case and hence, the disallowance of deduction of expenses of ₹ 20,000 is unjustified and liable to be deleted." 18. Facts of the case, in brief, as appearing from the statement of facts are that the assessee has claimed an amount of ₹ 20,000 towards legal fee in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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