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2017 (5) TMI 346 - ALLAHABAD HIGH COURTCapital gain - partnership firm - conversion from investment into stock in trade of shareholding - Firm transferred the shares as loss to partners and adjusted its profit - partners transferred the shares at profit and adjusted against their loss - tax avoidance or not - Held that:- Tribunal correctly considered applicability of Section 45 (2) and has observed that it is a case of outright sale of share holding by Assesses Firm to its partner and that to for consideration, hence it can not be a case of distribution by dissolution of Firm or even under the word "otherwise" because sale is not covered under Section 45 (4) of Act, 1961. Further, all the partners have not purchased shares as only 16 partners out of 18 purchased and that too, not in their profit sharing ratio as explained by Assesses. More that 90% shares were purchased by M/s Siddharth Construction Co. Pvt. Ltd while it was having 41% share in the Assesses Firm. Hence, Section 45 (4) is not attracted. Revenue repeatedly referred to the findings of A.O to contend that the entire transaction was a device to avoid tax in the same transaction but could not dispute that CIT(A) and Tribunal have considered each and every aspect on which the matter has been examined by A.O. in detail and concurrent findings of fact have been recorded by both appellate authorities that there was no shame transaction as presumed/assumed by A.O. and his finding was clearly incorrect and conjectured. - Decided against revenue
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