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2016 (1) TMI 1440 - AT - Income TaxCapital gain/loss - relinquishment of an asset/ extinguishment of right in shares - transfer of capital asset u/s 2(47) - long term capital loss on account of reduction in paid up equity share capital - HELD THAT:- This issue has been decided in case of Bennett Coleman & Co. Ltd. [2011 (9) TMI 1 - ITAT MUMBAI] loss arising on account of reduction in share capital cannot be subjected to provisions of sec.45 r.w.s. 48 and, accordingly, such loss is not allowable as capital loss. At best such loss can be described as notional loss and it is settled principle that no notional loss or income can be subjected to the provisions of the I.T. Act. Reopening of assessment u/s 147 - HELD THAT:- We are in agreement with the findings of ld. CIT(A) that the issue under consideration was such that prima facie it was possible to entertain a view that the assessee had wrongly claimed capital loss on account of calculation of shares and thereby resulting into escapement of income. Therefore, we endorse the finding of ld. CIT(A) in holding that the AO had reason to believe that income had escaped assessment and he was within his competence to invoke the powers contained in section 147 to initiate reassessment of the income of the assessee. In the result, cross objection is dismissed.
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