Law:

Section:

Section 28(i) of the Income-tax Act, 1961 - Business loss/deductions - Allowable as - Assessing Officer disallowed loss on sale of shares, observing share transaction to be ingenuine on grounds that shares were sold at loss immediately after purchase and assessee could not produce share broker - Tribunal finding that all shares related to reputed companies were listed in stock exchange and were purchased and sold at prevailing market rate, allowed share loss - Whether question as to whether share could be sold immediately on date of purchase or not was question of business expedience which was not relevant for deciding genuineness of transaction - Held, yes - Whether suffering of loss could be factor for such purpose - Held, no - Whether non-production of share broker would disentitle assessee from claiming loss in transaction of shares - Held, no - Whether on facts view taken by Tribunal could be said to be erroneous or perverse - Held, no FACTS The Assessing Officer noticed that out of the four blocks of shares, delivery of three blocks were received by the assessee after five months and the price was also paid after five months, but the shares were immediately sold at loss. The share broker only in respect of one group was produced but the other share brokers did not appear despite notice. The books of account of the share broker, who appeared, also showed some discrepancies in the entries made. On those grounds the Assessing Officer held the transaction to be ingenuine and disallowed the loss on sale of shares. The Commissioner (Appeals) affirmed the order of the Assessing Officer. However, on further appeal, the Tribunal found that all the relevant documents relating to contract notes, bills, the quoted price and other materials were produced. The transactions were made through cheques. All the shares related to the reputed companies, were quoted in the stock exchanges and were purchased and sold at the prevalent quoted market rates, which was verified from the statement of the stock exchange. On that basis, the Tribunal found that the Commissioner (Appeals) had proceeded on the basis of suspicion that there might be some ingenuity in the transactions. The…

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