Genuine CCD transactions and capital loss set-off upheld where tax avoidance was not proved beyond suspicion.

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....ITAT held that the subscription and sale of compulsorily convertible debentures were genuine transactions arising from financial compulsion in a distressed family business, not a colourable device to offset capital gains. The Department had not shown that the underlying project, bank borrowings, mortgage of the jointly owned property, CCD subscription through banking channels, or sale based on an independent valuation were sham or collusive. Mere doubt over commercial prudence was insufficient to deny the statutory set-off of the resulting short-term capital loss, and suspicion alone could not justify disallowance. The Revenue's appeals were dismissed.....