The assessee-company is engaged in trading in beverages, ice cream, financing and investment etc.

The A.O. noted that during the year, the assessee had capital gain of Rs.33,92,84,278/- from the sale of shares of Krizm Hotels Pvt. Ltd.

The assessee has also claimed to have incurred an almost matching short-term capital loss of Rs.30,14,64,010/  All the above companies are related parties of the assessee-company and the assessee-company has invested in them in the month of August/September/November, 2008 accordingly.

The sales of the same to the various sister concerns have happened in the month of March, 2009.

 The above transaction, therefore, appeared to be abnormal and with an intent of creating a loss.

The A.O, therefore, noted that assessee-company has effectively used the entities of the group and shifted capital from one entity to the other and has booked a loss.

 The assessee-company has failed to give any scientific reasons for the investments in these companies and also, the sudden desire to sell these investments at a very low price to other entities of the group. Delhi Tribunal held as under :

The fact that the assessee bought and sold shares of groups concerns with a view to book loss and off-set the capital gains from another transaction does not mean that the loss can be treated as bogus if the documentation is in order. The loss cannot be treated as “speculation loss” under the Explanation to s. 73 because the shares were held as investments

The claim of assessee-company is supported by the documents on record.

Therefore, Ld. CIT(A) rightly came to the finding that the assessee-company has genuinely entered into purchase and sale of shares and if any, loss have been suffered by the assessee-company, A.O. cannot treat the same as non-genuine due to extraneous considerations or irrelevant reasons in the assessment order

RJ Corpn Ltd

Order dt 1/10/18

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