2019 (6) TMI 1097

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....e assessment year 2002-03. 2. The appeal has been admitted on the following substantial questions of law: "Whether on the facts and circumstances of the case, the Tribunal was right in holding that the capital loss arising out of sale of shares to sister concern when the transaction for sale to an outside buyer for a much higher price is being processed is genuine and ought to be allowed?" 3. We have heard Mrs.R.Hemalatha, learned Senior Standing Counsel for the Revenue and M.P.Senthil Kumar, learned counsel for the assessee. 4. The respondent/assessee merged with EID Parry India Ltd., during the relevant previous year. It is stated by the Revenue that after entering into negotiations with M/s.Bush Boake Allen Ltd., for sa....

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....peals) dated 29.05.2007, we find that an elaborate consideration has been given by the CIT(Appeals) with regard to the disallowance of the claim of long term capital loss. At this juncture, it would be relevant to take note of the findings recorded by the CIT(Appeals) in paragraph 4.5.3 of its order dated 25.09.2007. After examining the factual aspects, the CIT(Appeals) held that the Assessing Officer's conclusion that the assessee company became aware of the sale of shares of M/s. Bush Boake Allen Ltd., to purchase its shares from the existing shareholders is incorrect. Further, it was pointed out that the resolution to sell the shares of M/s.Bush Boake Allen Ltd., by the assessee was taken by its Board of Directors on 28.05.2002. The ....

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....eme Court in the case of Union of India & another Vs. Azadi Bachao Andolan reported in (2003) 263 ITR 706 (SC) it was held that transaction cannot be regarded or called as a colourable device, so long as the transaction is valid in law. With the above reasons, CIT(Appeals) held that they are unable to sustain the disallowance of long term capital loss. 11. The Revenue filed appeal before the Tribunal. The Tribunal also made a fact finding exercise and held that the suspicion of the Assessing Officer is solely based on the ground that the assessee had knowledge about the purchasing back of its shares by M/s.Bush Boake Allen Ltd., and therefore the assessee sold the share to PCL, to its sister concern and M/s.Bush Boake Allen Ltd., with a ....