AO had disallowed the shortfall in the sale consideration of sale of shares by the assessee and brought this sum to tax. He also disallowed the sum paid as cost incurred for effecting sale of equity shares on the ground that the major portion of the professional fees was paid in the preceding year and could not be allowed during the year under appeal. The CIT(A) deleted the disallowances. The ITAT observed that clause (viia) to section 56(2) of the Act inserted with effect from 1.06.2010 deals with the consideration received against sale of equity shares below the fair market value or without consideration and if it exceeds the said consideration such excess amount is subjected to tax. The fact remained that there had been a change in the sale consideration, as what was received was less than what was agreed. The transaction having entered through an agreement, there must have been some correspondence between both the parties to agree to the rate of Rs. 16.93 per share. It further noted that the assessee failed to file any documentary evidence to explain the reason for the shortfall. The CIT(A) had placed the burden of proof on the AO which was not justified. Thus, it was held that this issue of addition regarding shortfall of receiving sale consideration from sale of equity shares was restored to the AO for examination afresh for which necessary details shall be filed by the assessee so as to enable the AO to decide in accordance with law.

It was further held that the expenditure towards professional fees paid for the sale transaction had been rightly claimed during the year under appeal, because the genuineness of the expenditure was not in doubt and the facts as narrated by the assessee were found to be correct. Therefore, the findings of the CIT(A) allowing the claim of cost incurred for effecting transaction of sale of equity shares was to be confirmed. (AY.2013-14)