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2014 (3) TMI 1135 - AT - Income TaxComputing capital gains taxable in the hands of the assessee-company - determining the cost of acquisition of shares - Revalued cost of acquisition of shares as against the actual cost of acquisition incurred by the firm which has transferred the shares to the assessee-company - avoidance/evasion of tax by successively transferring shares from individuals to a company through the media of partnership firm and company - Held that:- When there is a finding by the Income Tax Appellate Tribunal, Bangalore, in the case of the partners, that all these transactions are within the four walls of the law, we have to follow the said finding of the Tribunal. The result is that we have to accept the contentions of the assessee in these appeals that all the factors leading to the successive transactions are valid and they are legitimate and therefore acceptable in law. Therefore, we cannot go beyond the facts apparent on records and examine the question of colourable device, as argued by the Revenue. Accordingly, the first issue raised by the Revenue regarding the cost of acquisition of shares is held against it. Disallowance u/s 14A r.w.r. 8D - disallowance of 2% u/s 14A - AO has in fact applied Rule 8D - Held that:- CIT (Appeals) has rightly held that Rule 8D is not applicable for the impugned assessment year. Accordingly, as consistently done in many cases, the Commissioner of Income Tax (Appeals) has made a reasonable disallowance towards corresponding expenditure. The Commissioner of Income Tax (Appeals) has made a disallowance of 2%. We find it is very reasonable. This contention of the assessee is, therefore, rejected. Disallowance of the claim made by it under Section 35D - Held that:- This issue was not seriously pursued at the time of hearing. This ground is accordingly rejected.
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