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2012 (5) TMI 257 - HC - Income TaxDeemed income u/s 41(1) - remission nor cessation or liability - transfer of shares - redemption of preferential shares - sham transaction - held that:- The Tribunal has come to the conclusion that there was an error on the part of the Assessing Officer and the CIT(A) in making an addition under Section 41(1) as there was no remission or cessation of liability in question during Assessment Year 2002-03. The order of the Tribunal is evidently correct. There was no remission or cessation of liability during Assessment Year 2002-03. - Decided in favor of assessee. Redemption of shares - sham transaction - held that:- transaction was not questioned by the Revenue for over ten years - The Revenue did not bring any material on record whatsoever to substantiate the contention that the transaction was sham. - Decided in favor of assessee. Transfer u/s 2(47) - held that:- the judgment of the Supreme Court in Anarkali Sarabhai (1997 (1) TMI 5 (SC)) concludes the issue that a redemption of preference shares by a Company squarely comes within the ambit of Section 2(47) of the Income Tax Act, 1961. Cost indexation - capital gains - held that:- Section 48 denies the benefit of indexation to bonds and debentures other than capital indexed bonds issued by the Government. The four percent non-cumulative redeemable preference shares were not bonds or debentures within the meaning of that expression in Section 48 of the Income Tax Act, 1961. In these circumstances, the Tribunal was correct in its decision to that effect. - Decided in favor of assessee.
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