TaxTMI 
TaxTMI 
2016 (6) TMI 1199
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....the Act. 2. The facts relating to the issue are set out in brief. The assessee is a private limited company liable to pay tax on book profit u/s 115JB of the Act. It held equity shares in some companies. The assessee along with two of its directors formed a partnership firm in the year 2009, in which the assessee held 99% share and the other two partners held 1% shares. The shares held by the assessee were given to the firm as its capital contribution. Subsequently the partnership firm sold the shares and earned Long term capital gain. The assessee received its share of profit from the firm and claimed the same as exempt u/s 10(2A) of the Act and the said amount was excluded from book profits as per the Explanation given in sec. 115JB of t....
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....d reliance on the decisions rendered by the Hon'ble Supreme Court in the cases of Apollo Tyres Ltd (255 ITR 273) and the decision rendered in the case of Malayala Manorama Ltd (300 ITR 251) to contend that the accounts adopted in the Annual General Meeting should not be disturbed by the AO. However, the Ld CIT(A) held that Hon'ble Supreme Court has expressed the view in the case of Dynamic Orthopaedic (190 Taxman 288)(SC) that the decision taken in the case of Malayala Manorama (supra) was incorrectly decided and hence the matter was referred to a larger bench. Accordingly he agreed with the view taken by the AO that the assessee has adopted a colourable device to evade minimum alternative tax prescribed u/s 115JB of the Act. Aggrieved, the....
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....emption as well as set off. The Hon'ble Supreme Court held as under:- "The real objection of the Department appears to be that the assessee is getting tax free dividend; that at the same time it is claiming loss on sale of the units; that the assessee had purposely and in a planned manner entered into a pre-mediated transaction of buying and selling units yielding exempted dividends with full knowledge about the fall in the NAV after the record date and the payment of tax-free dividend and, therefore, the loss on sale was not genuine. We find no merit in the above argument of the Department. At the matter covers assessment years before insertion of section 94(7) vide the Finance Act, 2001 with effect from April 1, 2002. With regard to such....
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....assessee as its capital contribution has not been doubted with. With regard to the observations that the shares were continued to be held in the demat account of the assessee, the Ld A.R submitted that a partnership firm cannot become a share holder and hence it is not entitled to open a demat account. Hence the shares belonging to a partnership firm is usually held in the name of its partner. Further it is seen from the paper book that the partnership firm has filed declaration before the Registrar of Companies that it is the beneficial owner of the shares held by assessee company. Further the declaration in Form No. I, as prescribed under the section 187-C of the Companies Act, has also been filed by the assessee company to the companies ....