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2014 (8) TMI 805 - AT - Income TaxSTCG on sale of flat - Taxability u/s 28(iv) or section 17 - Held that:- The papers were submitted before both the lower authorities - the assessee purchased the flat from DSD Builders and Developers through its director Mr. K. Narayanan - the revenue authorities erred in observing that the assessee bought the flat from Mr. K. Narayanan and sold the same flat to Mr. K. Narayanan - the company though a separate entity for all legal aspects, but it acts through its directors - Mr. K. Narayanan acting for the assessee, purchased the flat from DSD Builders and Developers as the primary transaction - the assessee sold the flat to its director as secondary transaction. Any trace of any connection of Mr. K Narayanan to be associated with the primary seller, i.e. DSD Builders and Developers, to give even a faint hint that the transaction was a collusive transaction - when the assessee sold the property to its director or there was a downward valuation - treading only on macro-economic theory would be unjustified - The burden is squarely on the assessee to prove as to how a loss is justified and acceptable - The assessee sold the property to its director, who actually retained the same and that it did not get eclipsed from the assessee, or its director clearly shows that the impugned flat was meant to be retained – thus, the order of the CIT(A) is set aside and the AO is directed for verification of claim of loss on sale of property – Decided in favour of Assessee.
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