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2023 (4) TMI 153 - AT - Income TaxDisallowance on loss on shares - colourable device - shares were sold at loss - short-term capital loss denied on sale of shares - allegation of the Revenue is that the assessee by investing a huge amount in a loss-making entity and thereafter selling the shares at a meagre amount has tried to take advantage of her position in the aforesaid company to reduce her tax liability and thus the entire transaction is a colourable device - HELD THAT - As husband of the assessee is the main director on the board and the aforesaid company was regularly assessed to tax and was a genuine company. The aforesaid facts as recorded in the order of the lower authorities have not been disputed by the Revenue. Further it cannot be denied that it is only due to the fact that M/s I Dream Production Pvt. Ltd. was a loss-making entity the assessee was required to infuse the funds to pay off the debts incurred by the company being the promoter holding 99.99% shares of the company. As decided in Biraj Investment Pvt. Ltd 2012 (8) TMI 805 - GUJARAT HIGH COURT As long as the Revenue could not doubt the sale price of the shares it would not be open for the Revenue to contend that the assessee had shown loss which it did not really suffer. We cannot be oblivious to the fact that the Revenue has not disputed the sale price of the shares and the identity of the purchasers is also not in doubt. Therefore when all the parties to the transaction are genuine and the intention of the assessee in subscribing to the preferential shares of the company is also supported by the benefits derived by the company the mere fact that the shares were sold at loss does not result in treating the entire transaction as colourable - Appeal by the Revenue is dismissed.
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