TaxTMI 
TaxTMI 
2015 (10) TMI 1384
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....he assessee is an individual having income from salary, capital gain and interest. The assessee filed his return of income for the assessment year 2007-08 on July 30, 2007 declaring total income of Rs. 23,27,741. The case was selected for scrutiny and thereafter the assessment was framed under section 143(3) vide order dated December 9, 2009 and the total income was determined at Rs. 60,15,916. Aggrieved by the order of the Assessing Officer, the assessee carried the matter before the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) vide order dated September 9, 2010 granted substantial relief to the assessee. Aggrieved by the aforesaid order of the Commissioner of Income-tax (Appeals), the Revenue is now in ap....
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....k the capital loss was an afterthought to evade the payment of tax. He thus applying the ratio laid down in the decision in the case of McDowell and Co. Ltd. v. CTO [1985] 154 ITR 148 (SC) held the long-term capital loss claimed on sale of shares to be colourable device for tax evasion. He accordingly denied the claim of long- term capital loss. Aggrieved by the order of the Assessing Officer, the assessee carried the matter before the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) deleted the addition made by the Assessing Officer by holding as under : 5.1. I have considered the assessment order and the above submissions. It is noticed that the appellant had claimed long-term capital loss arising on sale ....
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....self or to the Hindu undivided family of the appellant but were transferred to the Hindu undivided family of the appellant's father whose name was Suhrid Ambalal Sarabhai and that the Karta of that Hindu undivided family was the appellant's elder brother Dr. Anand Sarabhai. It is pointed out that merely because the transaction had taken effect after sale of land, it cannot be considered to be with a motive of evading tax particularly when as stated above the transaction was carried through with above supporting evidences. 5.2 On consideration of all these facts, I am of the view that the Assessing Officer was not justified in rejecting the long-term capital loss on sale of sh....
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....ansaction is not prohibited by law. McDowell and Co. Ltd.'s case [1985] 154 ITR 148 (SC) cannot be generally applied to state that there was tax evasion and that therefore, transaction should be ignored. The assessee is free to enter into a transaction which is genuine and it cannot be done away with. This is also stated in the above case of Azadi Bachao Andolan [2003] 263 ITR 706 (SC) wherein the earlier decisions of the Supreme Court were considered along with the decision in the case of McDowell and Co. Ltd. as under : 5.5 I have also noticed that the different decisions relied upon by the the Assessing Officer are not applicable to the facts of the appellant....
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....ssue in the present appeal is with respect to the loss on sale of shares of Suvik Hitek P. Ltd. It is an undisputed fact that the assessee had sold the shares of Suvik Hitech P. Ltd. which is a private limited company and is not listed on the stock exchange. The Commissioner of Income-tax (Appeals) while granting the relief has given a finding that the shares were transferred to the Hindu undivided family of the assessee's father which is a separate legal entity and the consideration of the same was received by the assessee from the said Hindu undivided family through banking channels. He has also noted that the shares were sold at a price which were on the basis of a report of the Government approved valuer. The Commissioner of Income-....