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2006 (3) TMI 90 - KARNATAKA HIGH COURTSurplus arising from issue and repurchase of the debentures - "Whether, Tribunal is right in holding that although the assessee is a financial company dealing in shares, etc., the transactions of purchase of its own debentures through its nominees did not represent transactions involving its stock-in-trade and accordingly, in holding that the surplus arising from issue and repurchase of the debentures merely represented a capital receipt not subject to tax?" - Having regard to the reality of the situation, as the assessee has not derived any income, he is entitled not to treat it as an income. Therefore, the Tribunal was fully justified in its conclusion that the said surplus amount reflected in the balance-sheet cannot be treated as an income of the assessee.
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