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2021 (2) TMI 31 - AT - Income TaxShort-term capital loss - loss originated from India bulls infrastructure Ltd on forfeiture of share warrants disallowed - HELD THAT:- During the course of hearing, on looking at the strange set of facts, the information was called from the assessee with respect to the corporate restructuring and business justification for layering of the funds. Assessee merely submitted that the issue is squarely covered in favour of the assessee by several decisions and once again relying on the decision of the learned CIT – A. As far as the scheme of things goes, it is evident for everybody. Nothing is further required to be mentioned that who is the beneficiary and who is the conduit. Further, it is not the assessee who is to be taxed in its hands, as the real beneficiary is India bulls Power Ltd, which further went into restructuring and scheme of amalgamations. So far as the issue for taxation in the hands of the assessee is squarely covered in favour of the assessee by the decision in case of CIT versus Chand Ratan Bagri [2010 (1) TMI 123 - DELHI HIGH COURT] wherein the addition was made in the hands of the assessee on protective basis and the addition was made on substantive basis in the hands of the company who forfeited the shares. In paragraph number 2 there was also an allegation of tax evasion tactic prohibited by law employed by the assessee. It is also the allegation in the impugned case. In paragraph number 12 – 14 clearly clinches the issue in favour of the assessee. The honourable High Court held that the issue as to whether the forfeiture of the convertible warrant amount to a transfer within the meaning of Section 2 (47) of the said act has now been made clear by the Supreme Court in the case of Grace Collis [2001 (2) TMI 9 - SUPREME COURT] as also by the Karnataka High Court in BPLSanyo finance Ltd [2008 (2) TMI 386 - KARNATAKA HIGH COURT] and the honourable High Court also followed the same. In paragraph number 14 the honourable High Court held that forfeiture of the convertible warrant has resulted in extinguishment of the right of the assessee to obtain a share in the issuer company.
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