M/s. Unnati Investment Pvt. Ltd., Ahmedabad V. The ACIT., Cricle-8, Ahmedabad

ITA 162/AHD/2005

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0256 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-08-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 02-08-2010
• Assessment Year: 2001-2002
• Appeal Filed On: 18-01-2005
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R K DHANESTA
• Keywords: Depreciation; Opportunity of being heard; Cost of acquisition; Onus to prove
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI, JM AND D.C. AGRAWAL, AM) ITA NO.162/AHD/2005 A. Y.: 2001-02 M/S. UNNATI INVESTMENT PVT. LTD., NR. POLICE HEADQUARTERS , B/H SAHIBAUG, AKSHARDHAM TOWERS AHMEDABAD 380 004 VS THE A. C. I. T., CIRCLE-8 AHMEDABAD PA NO. AAACV 2394J (APPELLANT) (RESPONDENT) APPELLANT BY SHRI DEEPAK SONI, AR RESPONDENT BY SHRI R. K. DHANESTA, DR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-XIV, AHMEDA BAD DATED 29-11-2004 FOR THE ABOVE ASSESSMENT YEAR 2001-02 CH ALLENGING THE ORDER OF THE LEARNED CIT(A) UPHOLDING REJECTION OF CLAIM OF LOSS OF RS.1,16,10,345/- INCURRED BY THE ASSESSEE ON TRANSF ER OF SHARES IN GUJARAT STEEL TUBES LTD. 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOT H THE PARTIES, PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND T HE MATERIALS AVAILABLE ON RECORD. THIS APPEAL WAS EARLIER DISMISSED TWICE IN DEFAULT OF THE ASSESSEE, WHICH WAS RECALLED BY ALLOWING MISC. APPL ICATION FILED BY THE ASSESSEE. 3. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE CHALLENGED THE ACTION OF THE AO IN REJECTING THE LOSS OF RS.1,16,1 0,345/- INCURRED BY THE ASSESSEE ON TRANSFER OF SHARES IN GUJARAT STEEL TUB ES LTD. (GSTL) BEFORE THE LEARNED CIT(A). DURING THE ASSESSMENT PROCEEDIN GS, THE ASSESSEE WAS ASKED TO PRODUCE PURCHASE COST EVIDENCE BUT THE ASS ESSEE COULD NOT ITA NOS. 162/AHD/2005 M/S. UNNATI INVESTMENT PVT. LTD. VS ACIT, CIR-8, AH MEDABAD 2 PRODUCE THE DOCUMENTS RELATING TO PURCHASE OF SHARE S OF GUJARAT STEEL TUBES LTD. AND THE AO HAS POINTED OUT THAT THE HUGE LOSS IS RESULTED DUE TO INDEXATION CLAIMED BY THE ASSESSEE U/S 48 OF THE IT ACT FOR WHICH EVIDENCE AS TO THE YEAR OF PURCHASE OF THE SHARES A S WELL AS DETAILS HOLDING OF THE SAME SHARES AS ON THE DATE OF SALE A RE ESSENTIAL. DURING THE PROCEEDINGS BEFORE THE AO, THE ASSESSEE HAS STA TED THAT IT SOLD 259855 SHARES OF GSTL THROUGH TWO BROKERS I.E. DALA L SHAH & SECURITIES (209850) AND ARVINDBHAI CHANDULAL CHOKSHI (50000) A ND NO DETAILS COULD BE FILED REGARDING THE BALANCE 5 SHARES. SO A S TO VERIFY THE GENUINENESS OF THE TRANSACTION WITH REGARD TO SALE, LETTERS WERE ISSUED TO THESE BROKERS AS WELL AS OFFICIAL LIQUIDATOR AND TO AHMEDABAD STOCK EXCHANGE, IN RESPECT AARVINDBHAI C. CHOKSHI AND DAL AL & SHAH SECURITIES PVT. LTD. HAVE CONFIRMED THAT SALES WERE CONDUCTED TO M/S. ANEE INVESTMENT PVT. LTD. ON CROSS VERIFICATION BY TH0E AO, THE SAME FIRM WAS NOT THERE ON THE GIVEN ADDRESS AND THIS WA S COMMUNICATED TO THE BROKERS AS WELL AS TO THE ASSESSEE, THE ASSESSE E HAS FILED CONTRACT NOTE IN RESPECT OF ARVINDBHAI C. CHOKSHI BUT NO DET AIL WAS PRODUCED IN RESPECT OF OTHER BROKERS. IT WAS FURTHER OBSERVED B Y THE AO THAT THE LETTER SENT TO M/S. ANEE INVESTMENT PVT. LTD. HAS COME BAC K UNSERVED AND, THEREFORE, GENUINENESS OF PURCHASE OF SHARES BY THI S PARTY IS NOT ESTABLISHED AND THUS TO THE EXTENT AS MENTIONED ABO VE ALL SALE OF SHARES OF GSTL NEEDS TO BE DISALLOWED. THE AO DISCUSSED TH IS ISSUE THOROUGHLY IN THE ASSESSMENT ORDER AND AS PER THE CHART GIVEN THEREIN; THE COST OF ACQUISITION OF 258935 SHARES HAS BEEN CALCULATED AT RS.1,15,21,033/-. IT WAS FURTHER OBSERVED BY THE AO THAT DIFFERENCE BET WEEN LONG TERM CAPITAL LOSS CLAIMED AT RS.1,16,10,345/- AND AS COM PUTED DATE WISE WITH AVERAGE COST AT RS.1,13,34,258/- WHICH COMES TO RS. 2,76,086/- DESERVES TO BE DISALLOWED. EVEN IF, FOR A MOMENT ALL FACTS O F THE SALE TRANSACTION BY THE ASSESSEE WERE ACCEPTED, THIS THUS HAS TO BE DIS ALLOWED. SINCE THE ASSESSEE FAILED TO PRODUCE THE BASIC DETAILS DETERM INING PURCHASE COST WHICH IS THE CONTRACT NOTE OF THE PURCHASE BY THE B ROKERS IT WAS OBSERVED ITA NOS. 162/AHD/2005 M/S. UNNATI INVESTMENT PVT. LTD. VS ACIT, CIR-8, AH MEDABAD 3 BY THE AO THAT IT IS IMPOSSIBLE TO COMPUTE THE CAPI TAL GAIN LOSS AND THE COMPUTATION CANNOT BE DONE MERELY ON THE BASIS OF S TATISTICAL STATEMENT FILED BY THE ASSESSEE WHICH HAS TO BE SUPPORTED BY EVIDENCE. IT WAS ALSO POINTED OUT BY THE AO THAT THE ASSESSEE HAS NO CONC ERN AS TO WHOM THE SHARES WERE SOLD AND THE ASSESSEE IS INTO THIS NON GENUINE TRANSACTION FOR THE PURPOSE OF CLAIMING CAPITAL LOSS. THE AO HA S, THEREFORE, DISALLOWED THE LOSS AMOUNTING TO RS.1,16,10,345/-. 4. THE ADDITION WAS CHALLENGED BEFORE THE LEARNED C IT(A) AND SAME SUBMISSIONS WERE REITERATED. IT WAS FURTHER SUBMITT ED THAT ACTUAL COST AS ON 01-04-2001 RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL WAS MERELY BALANCE IN THE ACCOUNT OF COST OF SHARES BROUGHT FO RWARD FROM THE EARLIER YEARS AND THERE WAS NO TRANSACTION EFFECTED IN CONN ECTION WITH THE PURCHASE DURING THE PREVIOUS YEAR ENDED 31-03-2001, THE OPENING BALANCE WHICH WAS DULY CERTIFIED BY THE CHARTERED A CCOUNTANTS AND CERTIFIED TO BE TRUE AND FAIR HAVE ALWAYS BEEN ACCE PTED BY THE DEPARTMENT. THE ASSESSEE HAD SOLD 259855 EQUITY SHA RES DURING THE PREVIOUS YEAR AND THE SAID SHARES WERE SOLD AT THE BEST REALIZABLE SALE PRICE AND DULY RECORDED IN THE BOOKS OF ACCOUNT, TH E RATE OF SALES HAVE NOT BEEN DISPUTED BY THE AO AND THE OBSERVATIONS RE GARDING NON- CONFIRMATION OF THE PURCHASE OF THE SHARES BY M/S. ANEE INVESTMENT PVT. LTD. ARE NEITHER CORRECT IN THE EYES OF LAW NOR CAU SE ANY PREJUDICE TO THE SALE TRANSACTION EFFECTED BY THE ASSESSEE COMPANY. IT WAS FURTHER SUBMITTED THAT AS LONG AS RATE OF SALE AND SALE CON SIDERATION HAVE BEEN ACCEPTED BY THE AO, NON-AVAILABILITY OF THE CONFIRM ATION FROM THE PURCHASER CANNOT CAUSE ANY PREJUDICE AND FROM THE P OSSESSION OF ALL DOCUMENTARY EVIDENCE, IT WAS CLEAR THAT SHARES WERE SOLD AND TRANSFERRED BY THE ASSESSEE. THE ASSESSEE SUBMITTED THAT THE AO CANNOT ASK EACH AND EVERY EVIDENCES AND PARTICULARLY THE CONTRACT N OTE, PURCHASE BILLS IN RESPECT OF TRANSACTIONS EFFECTED BEFORE 10 YEARS WH EN THE SAID TRANSACTIONS HAVE BEEN DULY REFLECTED IN THE AUDITE D ACCOUNTS AND WERE ITA NOS. 162/AHD/2005 M/S. UNNATI INVESTMENT PVT. LTD. VS ACIT, CIR-8, AH MEDABAD 4 PLACED ON RECORD. IT WAS FURTHER SUBMITTED THAT AO CANNOT DRAW A CONCLUSION THAT THE ASSESSEE HAD NOT SUBMITTED THE BALANCE SHEET AND PROFIT & LOSS ACCOUNT FOR THE PERIOD COMMENCING 198 3 TO COMMENCING YEAR 1994 AS HE HAS NOT COLLECTED ANY EVIDENCE FROM THE OFFICE OF THE REGISTRAR OF COMPANIES. 5. THE LEARNED CIT(A) CONSIDERING THE SUBMISSIONS O F THE ASSESSEE AND THE MATERIALS AVAILABLE ON RECORD HELD THAT THE ASSESSEE HAS NOT FILED RELEVANT EVIDENCES ON RECORD, THEREFORE, FAILED TO PROVE THE GENUINENESS OF THE TRANSACTION. THE ADDITION WAS ACCORDINGLY UPHEL D. HIS FINDINGS IN THE IMPUGNED ORDER IN PARA 3.3 ARE REPRODUCED AS UNDER: 3.3 I HAVE CAREFULLY CONSIDERED THE OBSERVATIONS M ADE THE AO, AS WELL AS THE SUBMISSIONS AS ADVANCED BY THE A PPELLANT. IN THE FIRST INSTANCES, THE FACT IS CLEAR THAT THE APPELLANT COULD NOT PROVE THE GENUINENESS OF THE PURCHASE OF SHARES BY ANEE INVESTMENT PVT. LTD. IN THE ABSENCE OF FURNISHING N ECESSARY CONFIRMATION FROM THE SAID PARTY AND I AM NOT CONVI NCED WITH THE ARGUMENT OF THE COUNSEL OF THE APPELLANT THAT M ERELY ON ACCOUNT OF NON-AVAILABILITY OF THE CONFIRMATIONS FR OM THE PURCHASER, THE A. O. IS NOT JUSTIFIED IN DRAWING AN Y ADVERSE INFERENCE AND THE LAW DOES NOT IMPOSE AN ASSESSEE T O HAVE THE COMPLETE AND CORRECT DETAILS REGARDING PURCHASE R OF THE SHARES, BECAUSE THE ONUS TO PROVE THE GENUINENESS O F ANY TRANSACTION OF PURCHASE OR SALE WITH ANY PARTY IS P RIMARILY ON THE APPELLANT AND IN THIS CONNECTION, FURNISHING TH E CONFIRMATIONS FROM THE PARTIES WITH WHOM THE APPELL ANT DEALS WITH IS A VERY VITAL INSTRUMENT IN PROVING THE GENU INENESS OF TRANSACTION. EVEN DURING THE APPELLATE PROCEEDINGS, THE COUNSEL OF THE APPELLANT COULD NOT THROW ANY FURTHE R LIGHT WITH REGARD TO FILING OF THE CONFIRMATIONS FROM THE PURC HASER, EXCEPT REITERATING THE ARGUMENTS THAT THE TRANSACTIONS WER E DULY REFLECTED IN ITS ACCOUNTS AND THE ACCOUNTS WERE AUD ITED BY A CHARTERED ACCOUNTANT AND THE AO HAS NOT RAISED ANY OBJECTION SO FAR AS THE RATE OF PURCHASE AND SALE I S CONCERNED. I AM, THEREFORE, INCLINED TO AGREE WITH THE OBSERVA TIONS MADE BY THE A. O. THAT IT IS IMPOSSIBLE TO COMPUTE THE C APITAL GAIN LOSS IN THE ABSENCE OF BASIC REQUIREMENT I.E. THE C ONTRACT NOTE IN DETERMINING THE PURCHASE COST AND THERE IS NO LO GIC IN THE ARGUMENT OF THE APPELLANT THAT THE A. O. CANNOT ASK EACH AND EVERY EVIDENCE, PARTICULARLY THE CONTRACT NOTE/PURC HASE BILL, ITA NOS. 162/AHD/2005 M/S. UNNATI INVESTMENT PVT. LTD. VS ACIT, CIR-8, AH MEDABAD 5 BECAUSE THE A. O. IS VERY WELL WITHIN HIS RIGHT TO CALL FOR ANY SUCH DETAILS, WHICH WOULD BE VITAL IN PROVING THE G ENUINENESS OF THE TRANSACTIONS. I, THEREFORE, HOLD THAT THE DI SALLOWANCE OF RS.1,16,10,345/- MADE BY THE AO IN RESPECT OF LOSS INCURRED IS QUITE IN ORDER AND NO INFERENCE WHATSOEVER IS CA LLED FOR. 6. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SAME SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. HE HAS REFERRED TO BALANCE SHEET AS ON 30-9-1985 AND 30-09-1986 (PB 13) TO SHOW PURCHASE OF 29471 OF GSTL AND BY THE ASSESSEE. HE H AS SUBMITTED THAT THESE SHARES WERE EVEN PURCHASED PRIOR TO SEPTEMBER , 1985. PB- 19 IS THE DETAILS OF SCHEDULE C ABOUT THE INVESTMENT IN THE SHARES OF GSTL IN 399855 SHARES. PB-29 IS THE STATEMENT SHOWING OPENI NG AND CLOSING BALANCE OF NUMBER OF SHARES OF GSTL AND SUBMITTED T HAT SHARES WERE TIME TO TIME PURCHASED AND SOLD. THE SHARES HAVE BE EN ACTUALLY SOLD FROM THE ASSESSMENT YEAR 1996-97 AND IN THE ASSESSM ENT YEAR UNDER APPEAL 259855 SHARES HAVE BEEN SOLD. HE HAS SUBMITT ED THAT THE SALES IN THE EARLIER YEARS HAVE NOT BEEN DISPUTED BUT NO ORD ER U/S 143(3) OF THE IT ACT HAS BEEN PASSED. HE HAS REFERRED TO PB-27 WHICH IS THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 1987-88 U/S 143(3) OF THE IT ACT TO SHOW THAT INVESTMENT AND VALUE OF ACTUAL INVESTMENT WAS SAME AS IN THE SUBSEQUENT YEAR. HE HAS HOWEVER, CONCEDED THAT NO C ONTRACT NOTE IS AVAILABLE WITH THE ASSESSEE TO PROVE PURCHASE AND P URCHASE COST OF THE SHARES IN THE EARLIER YEARS. HE HAS REFERRED TO PB- 10 WHICH IS LETTER OF THE ASSESSEE TO THE AO TO SHOW THAT ALL INFORMATION WER E PROVIDED TO THE AO. HE HAS SUBMITTED THAT ENQUIRIES CONDUCTED BY THE AO AT THE BACK OF THE ASSESSEE FROM THE BROKERS AND PURCHASERS OF SHARES M/S. ANEE INVESTMENT PVT. LTD. WERE NOT CONFRONTED TO THE ASS ESSEE, THEREFORE, SAME CANNOT BE READ IN EVIDENCE. HE HAS SUBMITTED THAT S ALES WERE MADE THROUGH BROKERS WHO ARE LISTED WITH THE STOCK EXCHA NGE. HE HAS REFERRED TO PB-49 WHICH IS THE LIST FILED BEFORE THE REGISTR AR OF COMPANIES REGARDING HOLDING FILING OF THE B/S. HE HAS SUBMITT ED THAT SINCE THE ASSESSEE SUBMITTED REPORT OF THE CHARTERED ACCOUNTA NTS WHICH SHOWS ITA NOS. 162/AHD/2005 M/S. UNNATI INVESTMENT PVT. LTD. VS ACIT, CIR-8, AH MEDABAD 6 THE COST OF THE PURCHASE OF SHARES WHICH IS ALSO VE RIFIED BY THE CHARTERED ACCOUNTANTS, THEREFORE, COST OF PURCHASE VERIFIED B Y THE CHARTERED ACCOUNTANTS SHOULD NOT HAVE BEEN DISPUTED. HE HAS S UBMITTED THAT THE AO SHOULD NOT ASK FOR THE EVIDENCE AT LATER STAGE A FTER EXPIRY OF SEVERAL YEARS. HE HAS SUBMITTED THAT ACTUAL VALUE OF THE CO ST OF THE SHARES HAS BEEN REFLECTED IN THE AUDITED ACCOUNTS. THE MAIN TENANCE OF AUDIT REPORT OF THE ACTUAL COST OF PURCHASE AND SALE BASI S SUSTAINED BY THE ASSESSEE, THEREFORE, ON THE BASIS OF THE AUDIT REPO RT ITSELF THE AO SHOULD HAVE ACCEPTED THE CLAIM OF THE ASSESSEE FOR LONG TE RM CAPITAL LOSS. HE HAS RELIED UPON THE DECISION OF THE HONBLE SUPREME COU RT IN THE CASE OF CIT VS WOODWARD GOVERNOR INDIA PVT. LTD. 312 ITR 254 IN SUPPORT OF HIS CONTENTION THAT THE ACTUAL METHOD OF ACCOUNTING OF THE ASSESSEE SHOULD BE ACCEPTED BY THE AO. 7. ON THE OTHER HAND, THE LEARNED DR RELIED UPON TH E ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSEE H AS FAILED TO PROVE THE LOSS ON ACCOUNT OF GENUINE SALE AND PURCHASE OF SHA RES. THE LEARNED DR SUBMITTED THAT EXCEPT THE BALANCE SHEET NO EVIDENCE IS FILED ON RECORD TO PROVE THE CONTENTION. THE ASSESSEE FAILED TO DISCHA RGE THE BURDEN UPON IT TO PROVE THAT ACTUAL LOSS IS SUFFERED BY THE ASSESS EE. HE HAS SUBMITTED THAT IN THE ABSENCE OF VERIFICATION OF PURCHASE COS T OF THE SHARES AND SALE TO THE NON-EXISTENT PARTY WOULD PROVE THAT THE TRAN SACTION IS NOT GENUINE. THE LEARNED DR SUBMITTED THAT WHATEVER MAT ERIAL WAS COLLECTED BY THE AO DURING THE COURSE OF INVESTIGATION WAS CO NFRONTED TO THE ASSESSEE AND THE ASSESSEE HAS FAILED TO REBUT THE E VIDENCE COLLECTED BY THE AO IN THIS REGARD. THE LEARNED DR SUBMITTED THA T THE ASSESSEE HAS FAILED TO PROVE ITS CASE EVEN IN THE SECOND APPELLA TE STAGE, THEREFORE, ADDITION IS RIGHTLY CONFIRMED BY THE LEARNED CIT(A) . 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. ACCORDING TO THE ASSE SSEE IT HAD PURCHASED ITA NOS. 162/AHD/2005 M/S. UNNATI INVESTMENT PVT. LTD. VS ACIT, CIR-8, AH MEDABAD 7 259855 SHARES OF GSTL AND ACCORDING TO THE ASSESSEE THE SHARES WERE TRANSFERRED. THEREFORE, THE ASSESSEE MADE A CLAIM O F LONG TERM CAPITAL LOSS. THE ASSESSEE HOWEVER, AT THE ASSESSMENT STAGE COULD NOT PRODUCE THE BROKERS NOTES AND OTHER EVIDENCES TO SUBSTANTI ATE THE PURCHASE COST OF THE SHARES OF GSTL. THE ASSESSEE WAS ASKED TO PR ODUCE EVIDENCES OF PURCHASE COST OF THE SHARES BUT THE ASSESSEE DESPIT E GIVING NUMBER OF OPPORTUNITIES DID NOT PRODUCE ANY EVIDENCE IN SUPPO RT OF THE CLAIM FOR SUFFERING ACTUAL LOSS BEFORE THE AO, PARTICULARLY W HEN THE LOSS WAS CLAIMED BY THE ASSESSEE DUE TO INDEXATION ONLY U/S 48 OF THE IT ACT. FOR THE PURPOSE OF INDEXATION IT WAS NECESSARY FOR THE ASSESSEE TO PRODUCE SOME RELIABLE AND COGENT EVIDENCES BEFORE THE AO TO SATISFY THE REQUIREMENT OF THE AO AS REGARDS COST OF ACQUISITIO N OF THE SHARES. THE ASSESSEE ONLY PRODUCED BALANCE SHEET OF THE EARLIER YEARS AND STATED THAT M/S. GSTL HAS BEEN DECLARED SICK AND HONBLE HIGH C OURT HAS ORDERED FOR LIQUIDATION OF THE SAID COMPANY, MEANING THEREB Y THE ASSESSEE DID NOT PRODUCE ANY EVIDENCE TO THE SATISFACTION OF THE AO REGARDING COST OF PURCHASE OF THE SHARES AND INDEXATION. THE ASSESSEE FURTHER SUBMITTED THAT IT SOLD 259855 SHARES OF GSTL THROUGH TWO BROK ERS. THE AO ISSUED TWO LETTERS TO THE TWO BROKERS AND THE OFFICIAL LIQ UIDATOR AND TO AHMEDABAD STOCK EXCHANGE LTD. TO VERIFY THE ISSUE O F CLAIM OF SHARES AS WELL AS TO FIND OUT WHETHER ACTUAL PURCHASE OF THE SHARES HAD TAKEN PLACE AND ALSO TO VERIFY THE GENUINENESS OF THE TRANSACTI ON WITH REGARD TO SALE PRICE. ONE OF THE BROKERS M/S. ARVINDBHAI C. CHOKSH I CONFIRMED THAT SALE OF 50000 SHARES WAS CONDUCTED TO M/S. ANEE INV ESTMENT PVT. LTD. THE SECOND BROKER DALAL & SHAH SECURITIES PVT. LTD. CONFIRMED THE TRANSACTIIN THAT IT TOO HAD SOLD SHARES TO M/S. ANE E INVESTMENT PVT. LTD. ON CROSS VERIFICATION IT WAS FOUND THAT THE SAID CO NCERN M/S. ANEE INVESTMENT PVT. LTD. COULD NOT BE FOUND ON THE ADDR ESS GIVEN. THE ASSESSEE WAS GIVEN OPPORTUNITY AS TO WHY IN SUCH CI RCUMSTANCES THE ENTIRE SALE TRANSACTION BE NOT DISALLOWED. THE ASSE SSEE FILED CONTRACT NOTE OF THE BROKER ARVINDBHAI C. CHOKSHI SHOWING PURCHAS E OF 50000 SHARES ITA NOS. 162/AHD/2005 M/S. UNNATI INVESTMENT PVT. LTD. VS ACIT, CIR-8, AH MEDABAD 8 BY M/S. ANEE INVESTMENT PVT. LTD. HOWEVER, NO SUCH EVIDENCE REGARDING PURCHASE OF BALANCE 209850 SHARES BY M/S. ANEE INVE STMENT PVT. LTD. COULD BE PRODUCED WHICH WOULD MEAN THAT THE BROKER DALAL & SHAH SECURITIES PVT. LTD. COULD NOT PROVIDE THE CONTRACT NOTE OF SUBSTANTIAL SHARE DEALING. FURTHER, THE NOTICES SENT TO M/S. AN EE INVESTMENT PVT. LTD. FOR CONFIRMATION OF PURCHASE OF SHARES ALSO RE TURNED UNSERVED. THE AO, THEREFORE, RIGHTLY NOTED THAT THE ASSESSEE HAS FAILED TO ESTABLISH GENUINENESS OF THE FIRM WHICH HAD PURCHASED THE ALL EGED SHARES. THE AO ALSO NOTED THAT THE ENTIRE TRANSACTION SHALL HAVE T O BE DISALLOWED BECAUSE THE ASSESSEE FAILED TO FILE CONFIRMATION FROM ANY O F THE PARTIES AND ALSO FAILED TO ESTABLISH THE COST OF PURCHASE OF THE SHA RES. THE AO ALSO DISCUSSED THE DISCREPANCY IN THE COMPUTATION OF LON G TERM CAPITAL LOSS AND REJECTED THE CLAIM OF THE ASSESSEE ON THE BASIS OF DATA AVAILABLE BEFORE HIM. THE AO ALSO CONSIDERED THE DETAILS FROM THE EARLIER YEARS AND NOTED FURTHER DISCREPANCY IN THE CLAIM OF THE ASSES SEE FOR THE PURPOSE OF INDEXATION. THE AO, THEREFORE, RIGHTLY NOTED THAT T HE ASSESSEE HAS FAILED TO PRODUCE NECESSARY EVIDENCE TO PROVE ITS CLAIM FO R LOSS INCURRED IN THE SALE TRANSACTION OF 259855 SHARES. THE AO ALSO REJE CTED THE LOSS OF RS.2,76,086/- BECAUSE THE CLAIM WAS NOT JUSTIFIED. THE AO IN THE ABSENCE OF REQUIRED EVIDENCE AND PURCHASE DETAILS R IGHTLY NOTED THAT SINCE THE CLAIM FOR PURCHASE OF SHARE IS MADE FOR W AY BACK IN 1983-84, THEREFORE, IT IS NECESSARY TO CHECK WHETHER THE ASS ESSEE HAS SOLD OR PURCHASED THE SHARES WITHIN THE HUGE SPAN OF 18 YEA RS. THE FACTS AND CIRCUMSTANCES NOTED BY THE AO WERE, THEREFORE, JUST IFIED TO HOLD PROPER ENQUIRY INTO THE MATTER BECAUSE THE CLAIM OF LOSS W AS MADE ONLY DUE TO INDEXATION CLAIMED BY THE ASSESSEE. IT WAS, THEREFO RE, NECESSARY FOR THE ASSESSEE TO PRODUCE THE BASIC REQUIREMENT DETAILS D ETERMINING THE PURCHASE COST WHICH IS THE CONTRACT NOTE OF THE PURCHASE BY THE BROKERS OTHERWISE, IT WOULD HAVE BEEN IMPOSSIBLE TO COMPUTE THE CAPITA L GAIN LOSS. THE AO THEREAFTER GAVE SEVERAL OPPORTUNITIES TO THE ASSESS EE TO SUPPORT ITS CLAIM BY EXPLANATION AND EVIDENCES, BUT THE ASSESSEE COUL D NOT SUBSTANTIATE ITA NOS. 162/AHD/2005 M/S. UNNATI INVESTMENT PVT. LTD. VS ACIT, CIR-8, AH MEDABAD 9 ITS CLAIM FOR LONG TERM CAPITAL LOSS. THE ABOVE FAC TS NOTED BY THE AO WOULD SHOW THAT THE ASSESSEE WAS DULY CONFRONTED WI TH ALL THE MATERIAL ON RECORD AND THE ASSESSEE WAS GIVEN SEVERAL OPPORT UNITIES TO EXPLAIN THE ABOVE ISSUE SUPPORTED BY EVIDENCE. THEREFORE, THERE IS NO DENIAL OF OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE ASS ESSEE WAS CONFRONTED WITH THE ENTIRE MATERIAL. THUS, THE ASSESSEE FAILED TO PROVE THE COST OF PURCHASE OF SHARES AND MOREOVER, THE SALE OF THE SH ARES IS ALSO NOT PROVED BECAUSE NO CONTRACT NOTE WAS FILED FOR SUBST ANTIAL SALE OF 209850 SHARES. THE PURCHASER M/S. ANEE INVESTMENT PVT. LTD . WAS ALSO FOUND TO BE NON-EXISTENT. IT IS, THEREFORE, ESTABLISHED FACT THAT THE ASSESSEE DID NOT PRODUCE ANY EVIDENCE OF PURCHASE COST OF SHARES. TH E ASSESSEE ALSO FAILED TO PROVE THE GENUINE SALE OF THE SHARES IN QUESTION AND NO EVIDENCE IN THIS REGARD IS FILED TO THE SATISFACTION OF THE AO. THEREFORE, BURDEN UPON THE ASSESSEE TO PROVE ITS CASE OF LONG TERM CAPITAL LOSS WAS NOT DISCHARGED. SINCE THE ASSESSEE CLAIMED DEDUCTION OF LOSS, THEREFORE, BURDEN WAS UPON THE ASSESSEE TO PROVE ITS CASE THRO UGH EVIDENCE AND MATERIAL ON RECORD WHICH THE ASSESSEE HAS FAILED TO DO SO. THEREFORE, THE ASSESSEE HAS NOT DISCHARGED THE ONUS UPON IT TO PRO VE GENUINE CLAIM OF LONG TERM CAPITAL LOSS. THE LEARNED COUNSEL FOR THE ASSESSEE ULTIMATELY SUBMITTED THAT HE IS UNABLE TO PRODUCE THE CONTRACT NOTES AS THE SAME WERE NOT AVAILABLE AND THE CRUX OF THE SUBMISSION I S THAT THE AUDIT REPORT FILED BY THE ASSESSEE WOULD SHOW COST OF PURCHASE A ND SALE AND THROUGH AUDIT REPORT THE DATA GIVEN IN THE AUDIT REPORT FOR PURCHASE AND SALES OF THE SHARES SHOULD BE ACCEPTED. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO REFERRED TO SEVERAL PAGES IN THE PAPER BOOK TO SHOW THE VALUE OF PURCHASE OF SHARES AND SALES AS MENTIONED IN VARIOUS BALANCE SHEETS BUT SUCH WOULD NOT SUPPORT THE CLAIM OF THE ASSESSEE. THE CL AIM OF THE LEARNED COUNSEL FOR THE ASSESSEE IS THAT THE DETAILS GIVEN IN THE AUDIT REPORT FOR EARLIER YEARS SHOULD BE ACCEPTED TO ESTABLISH ITS C ASE. IT WOULD MEAN THAT THE ASSESSEE WANTED THAT ITS AUDIT REPORT SHOULD BE ACCEPTED AS AN EVIDENCE TO MAKE A CLAIM OF LONG TERM CAPITAL LOSS WHICH IN OUR VIEW ITA NOS. 162/AHD/2005 M/S. UNNATI INVESTMENT PVT. LTD. VS ACIT, CIR-8, AH MEDABAD 10 CANNOT BE ACCEPTED MERELY ON THE BASIS OF FILING OF THE AUDIT REPORT BY THE ASSESSEE. THE HONBLE SUPREME COURT IN THE CASE OF METAL BOX CO. OF INDIA LTD. VS THEIR WORKMEN 73 ITR 53 HELD THAT THE PRESUMPTION ABOUT THE ACCURACY OF DULY AUDITED BALANCE-SHEET AN D PROFIT AND LOSS ACCOUNT OF A COMPANY OR CORPORATION, CONTAINED IN SECTION 23 OF THE PAYMENT OF BONUS ACT, 1965, APPLIES ONLY TO THE BALANCE- SHEET AND THE PROFIT AND LOSS STATEMENT. NO SUCH PR ESUMPTION IS PROVIDED FOR BY THE ACT IN REGARD TO AUDITORS CERT IFICATE. THEREFORE, WHERE A COMPANY CLAIMS A CERTAIN DEDUCTION FOR DEPR ECIATION, THE BURDEN OF PROOF THAT THE AMOUNT OF DEPRECIATION CLA IMED BY IT IS CORRECT IS ON THE COMPANY AND THAT BURDEN THE COMPA NY MUST DISCHARGE ONCE ITS FIGURE ARE CHALLENGED. MERE PROD UCTION OF AN AUDITORS CERTIFICATE WHICH IS NOT ADMITTED BY THE WORKMEN WILL NOT SUFFICE. THE TRIBUNAL SHOULD INSIST ON SOME REASONA BLE PROOF OF THE CORRECTNESS OF THE FIGURE OF DEPRECIATION CLAIMED, EITHER BY EXAMINING THE AUDITORS WHO CALCULATED AND CERTIFIED IT, OR BY SOME OTHER PROPER PROOF. THE TRIBUNAL SHOULD NOT TAKE TH E FIGURE OF DEPRECIATION FROM THE PROFIT AND LOSS ACCOUNT WHICH IS WORKED OUT UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956, AN D NOT IN ACCORDANCE WITH THE PROVISIONS OF THE INCOME TAX AC , 1961. 9. CONSIDERING THE ABOVE DISCUSSIONS, IT IS CLEAR T HAT THE ASSESSEE IS SOLELY RELYING UPON THE BALANCE AND AUDIT REPORT FO R SEVERAL YEARS IN SUPPORT OF THE CLAIM. HOWEVER, NO SUCH PRESUMPTION IS PROVIDED IN THE INCOME TAX ACT, TO ACCEPT THE AUDIT REPORT IN SUBST ITUTION OF THE LEGAL EVIDENCE. MERE PRODUCTION OF THE AUDIT REPORT WOULD NOT PROVE THE CASE OF THE ASSESSEE. ONCE CLAIM OF THE ASSESSEE HAS BEEN C HALLENGED BY THE AO, IT SHOULD BE PROVED BY THE ASSESSEE THROUGH COGENT AND RELEVANT EVIDENCES. AUDITORS REPORT AND BALANCE SHEETS ARE NOT CONCLUSIVE PROOF OF THE MATTER IN ISSUE. IT IS FOR THE AO TO SATISFY HIMSELF ABOUT THE GENUINE CLAIM OF THE ASSESSEE BASED UPON EVIDENCE A ND MATERIAL ON ITA NOS. 162/AHD/2005 M/S. UNNATI INVESTMENT PVT. LTD. VS ACIT, CIR-8, AH MEDABAD 11 RECORD. THEREFORE, THE ASSESSEE SHOULD HAVE PRODUCE D REASONABLE PROOF OF COMPUTATION OF CLAIM BEFORE THE AUTHORITIES BELOW. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE IN THE LIGHT OF THE A BOVE DISCUSSION, THE AUTHORITIES BELOW HAVE RIGHTLY OBSERVED THAT IT IS IMPOSSIBLE TO COMPUTE CAPITAL GAIN LOSS IN THE ABSENCE OF EVIDENCE ON REC ORD. THE COMPUTATION COULD NOT HAVE BEEN DONE BY THE AUTHORITIES BELOW M ERELY ON THE BASIS OF STATISTICAL STATEMENTS FILED BY THE ASSESSEE WHICH WERE NOT SUPPORTED BY ANY EVIDENCE ON RECORD. IN THIS VIEW OF THE MATTER, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT(A) IN UPH OLDING THE ORDER OF THE AO. WE CONFIRM HIS FINDINGS AND DISMISS THE APPEAL OF THE ASSESSEE. 10. NO OTHER POINT IS ARGUED OR PRESSED. 11. AS A RESULT, THE APPEAL OF THE ASSESSEE IS DISM ISSED. ORDER PRONOUNCED ON 13-08-2010 SD/- SD/- (D. C. AGRAWAL) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 13-08-2010 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD