Kalaiyarasan Rajangam Mudaliar vs. ITO

Parties Involved

Facts Summary

The assessee, Kalaiyarasan Rajangam Mudaliar, filed an appeal against the order passed by the Commissioner of Income Tax (Appeals) for the Assessment Year 2022-23. The appeal was filed against the disallowance of short-term capital loss on the sale of unquoted shares of Fiducia Infrastructure Private Limited, initiation of penalty proceedings under sections 270A and 272A of the Income-tax Act, 1961. The Assessing Officer had disallowed the short-term capital loss of Rs. 3,38,00,000/- claimed by the assessee on the sale of 5,200 unquoted equity shares of Fiducia Infrastructure Pvt. Ltd. The assessee had purchased the shares from Examen Infra & Entertainment Ltd. at Rs. 7,600/- per share and subsequently sold the same to Shri Gaurav Devendrakumar Mandora, director of FIPL, at Rs. 1,100/- per share. The Assessing Officer disallowed the loss on the ground that the shareholding details furnished by the assessee were not in conformity with the Schedule SH-1 reported by FIPL in its Income Tax Returns. The assessee filed an appeal before the Commissioner of Income Tax (Appeals), which was confirmed by the learned CIT(A). The assessee then filed a further appeal before the Tribunal.…

Legal Issues

• 1. Disallowance of Short term capital loss on sale of unquoted shares of Fiducia Infrastructure Private Limited of Rs. 3,38,00,000/-
• 2. Initiation of penalty proceedings u/s 270A of the Act.
• 3. Initiation of penalty proceedings u/s. 272A of the Act.

Judgment Outcome

Decided in favour of Assessee.

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