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2002 (10) TMI 48 - HC - Income TaxBy this writ petition under article 226 of the Constitution, the petitioner seeks to challenge, inter alia, notices issued under section 226(5) read with the Third Schedule to the Income-tax Act, 1961, under which the Deputy Commissioner of Income-tax-respondent No. 1, has prohibited Twinstar Holdings Limited-petitioners from receiving shares mentioned in the impugned notices. By the said notices, the depository participant is also restrained from delivering the impugned shares to any person(s). – In conclusion, we may refer to the judgment of the Supreme Court in the case of McDowell and Co. Ltd. v. CTO, in which it has been held that even if the transaction is genuine and even if it is actually acted upon, but if the transaction is entered into with the intention of tax avoidance, then the transaction would constitute a colourable device. That the courts are now concerned, not merely with the genuineness of a transaction, but with the intended effect of the transaction on the fiscal purpose. That, the true principle in the case of W.T. Ramsay was that one must consider fiscal consequences of a pre-planned series of transactions and one has not to dissect the scheme and consider individual stages separately. This judgment squarely applies to our case - petition fails
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