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2017 (3) TMI 1049 - AT - Income TaxAllowing set off of long-term capital loss on sale of preference shares against the long term capital gain earned on sale of apartment - AO disallowed the capital loss treating the transaction to be shame in nature - Held that:- We find that the assessee was holding preference shares in group companies and sold those shares to the company, which is owned by the assessee and her family members. Shares were delivered physically to the purchaser company and thus the assessee has transferred the shares in accordance with law. In our opinion, the transaction is within the parameters of law and in such circumstances the Assessing Officer cannot hold the transaction as a contrived transaction merely because the sale was to a company in which the assessee and her family members are having controlling stake. Further, it cannot be also considered as contrived transaction because the transaction of sale of shares was done prior to sale of apartment and assessee was aware of increasing prices of the apartment. The assessee can plan to reduce its tax liability through legitimate means. Assessee relied on the judgment of in the case of Union of India versus Azadi Bachao Andolan and another ( 2003 (10) TMI 5 - SUPREME Court) has held that merely because the transaction is entered into by the assessee with the motive to save the tax, the transaction cannot be regarded as colourable device so long as the transaction is valid in law - Decided in favour of assessee Brokerage expenses while computing the capital gain on sale of apartment - Held that:- assessee submitted explanation about the general role of brokers in sale deals of properties and stated that the broker played a role in negotiating the deal. The learned Commissioner of Income-tax (Appeals) on the basis of said explanation, allowed the appeal of the assessee. We have perused the order of the Assessing Officer as well as the impugned order of the learned Commissioner of Income-tax (Appeals). In our opinion, no documentary evidences in support of services of negotiating the deal by the broker Sh. Rajeev Mathur, in the present deal of surrendering the flat back to the builder, were submitted by the assessee either before the Assessing Officer or before the learned Commissioner of Income-tax (Appeals). In the circumstances, we feel it appropriate to restore the issue to the file of the Assessing Officer for deciding afresh after taking into account the evidence in support of services rendered by the broker. It is nevertheless to mention that assessee shall be afforded sufficient opportunity of hearing. - Decided in favour of revenue for statistical purpose.
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