Case Law Details
DCIT Vs Ganesh Plantation Ltd. (ITAT Ahmadabad)
AO on one hand has recorded his finding with respect to the shares of certain companies that its face value stands at ₹10 but the assessee has purchased the same at a higher value. The basis of arriving at the conclusion that the assessee has purchased the shares at a higher value was non-availability of shares valuation. In other words the AO himself has admitted the value of the shares of certain companies at ₹10 but he has not given any benefit of such value while working out the loss with respect to purchase and sale of shares. As such the AO has treated the entire loss on the purchase and sale of shares as not genuine which is contrary to the observations made by him during the assessment proceedings. In fact the AO, in the given facts and circumstances, was under the obligation to determine/ work out the valuation of the shares before rejecting the claim of the assessee.
It is an undisputed fact that all the parties with whom the assessee carried out such transaction were identifiable and there was also a consideration among such parties. Admittedly, the price of the shares in market is not always based on the company’s financial position, profit/growth rather its value/price is determined on the demand and supply of the script/shares and various other factors such as elaborated below:
a. the field in which the company is operating
b. the competition that the companies facing
Please become a Premium member. If you are already a Premium member, login here to access the full content.
