P.P. NAOLEKAR, C.J.
(1.) All these seven appeals raise the following common questions of law, which have been framed by this Court :
"(i) For that the impugned order of the Tribunal dt. 28th Sept., 2001, insofar as the present issue is concerned is bad in law and is as such liable to be set aside. (ii) For that the Tribunal was not justified and erred in holding that the assessee by filing full details of share transactions before the AO discharged the onus which lay on it but that the AO failed to discharge the onus cast on him to bring any material on record to support his findings. The same has vitiated the impugned order ?"
(2.) In all these cases the assessees are investment companies and their primary source of income is from interest. In the relevant assessment years the assessee companies showed loss on account of certain share transactions and claimed deduction on that loss from their total income. The AO did not agree with the claim made by the companies for the loss sustained by them on share transactions and reached to the conclusion that the transaction entered are sham and are being effected to adjust the loss towards their income from the business. Aggrieved by the assessment orders the assessee preferred appeals before the CIT(A), Guwahati and the appellate authority has reached to the conclusion that the assessee companies have suffered business loss on account of share business as claimed by the assessees and found that the transactions of share transfer genuine. Consequently thereof, the assessees appeals were allowed and they were permitted to adjust the loss incurred by them from their total income.
(3.) Against the said orders passed by the CIT(A) the Revenue preferred appeals before the Tribunal at Guwahati. The orders of the CIT(A) have been upheld by the Tribunal for the reasons, which are reproduced below :
"We have considered the rival submissions made before us. It is admitted that the respondent- company is an investment company and the primary source of its income is from interest. From the paper book pp. Nos. 11, 12, 13, 33 and 34 submitted by the respondent-company, we find that the respondent-company had entered into a number of share transactions of similar type. When the AD picked up only two transactions and accepted the other transactions is not clear from the order of the assessment. From the paper book we find that all the share transactions entered into by the respondent-company are duly supported by the contract notes and bills of recognized sharebrokers of the stock exchange and other documentary evidences. All the payments have been made and/or received through account payee cheques and/or drafts. Those are reflected in the bank statements filed by the respondent-company in its paper book. No material has been brought on record by the AO in support of his observation that the transactions were rigged or were not genuine. It is well- settled law that onus of proving that the apparent is not the real is on the party who claims it to be so. This view was taken by the Hon'ble apex Court in the case of
CIT vs. Daulat Ram Rawatmull
1972 CTR (SC) 411 : (1973) 87 ITR 349 (SC). The respondent-company by filing full details of share transactions before the AO discharged the onus, which lay on it. But the AO failed to discharge the onus cast on him to bring any material on record to support his findings. In the absence of such material it is not possible to uphold the order of the AO...."
(4.) Aggrieved by the said orders of the Tribunal the present appeals are preferred by the Revenue. Mr. U. Bhuyan, learned Counsel appearing for the appellant-Revenue has contended that the nature of transactions shows that the assessee purchased the shares at higher value and immediately thereafter transferred at lower value and therefore, it cannot be said that the transactions are genuine and can be a device by which the assessees avoided the payment of tax. It appears from the record, as mentioned by the Tribunal in its judgment that the assessee- companies have entered into various transactions of share transfer but the AO has picked up only two transactions and has not considered other transactions before arriving at the finding that the two transactions were not genuine. The AO has not referred to other transactions entered into by the assessee-companies in transferring the shares. When the assessee-companies have entered into share transactions of various companies there is no justification for picking up only two transactions to show that the transactions in share was not genuine only because those transactions were made at loss. We can take judicial notice of the fact that share price is not static and share market may have lower trend. The share price may rise or may come down next day and to minimize the loss the shareholder may transfer his shares even at loss. There is no evidence on record placed by the Revenue to indicate that the disputed share transactions have been entered into between the parties, who are close relatives or friends or to the persons having common interests, nor there is any material placed on record to indicate that the share transactions have been entered into between same parties adopting same modus operandi for a reasonable span of period. On the other hand, the assessee has placed on record to indicate that all the share transactions entered into by the assessee-companies have been supported by contract notes and bills of recognized share brokers of stock exchange and also other documentary evidence showing that all the payments have been made/received through account payee cheques or drafts. In the absence of the best evidence, which could have been produced by the Revenue, it cannot be held that the assessee-companies have adopted a devise to defraud the Revenue.
(5.) For the aforesaid reasons, we do not find any good or sufficient grounds to interfere with the findings arrived at by the Tribunal that the share transactions were genuine and the assessee- companies are entitled to claim benefit under those transactions for the loss suffered. In this view of the matter, the appeals are dismissed. However, in the facts and circumstances of the case, the parties shall bear their own costs.