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2018 (3) TMI 473 - AT - Income TaxNon granting the benefit of brought forward losses of amalgamating company in the hands of the amalgamated company - Held that:- We hold that the accumulated losses of amalgamating companies, comprising of unabsorbed short term capital loss of ₹ 10,26,44,123/- ; unabsorbed long term capital loss of ₹ 6,34,784/- and unabsorbed business loss of ₹ 6,63,574/- , would belong to the amalgamated company pursuant to clause in para 10(iii) of the scheme of amalgamation which was approved by the Hon’ble Calcutta High Court vide order dated 6.10.2010. Since the losses belonged to the amalgamated company i.e the assessee herein, the provisions of section 72 and section 74 of the Act would come into play with respect to set off of the same against the respective incomes of the assessee. The provisions of non-compliance of section 72A of the Act as narrated by the CIT-A does not hold any water. Accordingly, the Grounds 1 & 2 raised by the assessee are allowed. Disallowance of Long Term Capital Loss without Securities Transaction Tax (STT) and not allowing the same to be carried forwarded - Held that:- Hon’ble Supreme Court in the case of K.P.Varghese vs ITO (1981 (9) TMI 1 - SUPREME Court) had held that : “It is a well settled rule of law that the onus of establishing that the conditions of taxability are fulfilled is always on the revenue and the second condition being as much a condition of taxability as the first, the burden lies on the revenue to show that there is an understatement of the consideration and the second condition is fulfilled. (underlining provided by us). To throw the burden of showing that there is no understatement of the consideration, on the assessee would be to cast an almost impossible burden upon him to establish a negative, that he did not receive any consideration beyond that declared by him.” Though this decision was rendered in the context of erstwhile provisions of section 52(2) of the Act which was later omitted from the statute, the ratio decidendi would be applicable to the facts of the instant case. No enquiries whatsoever were conducted in the hands of the purchaser of shares. We find that the entire disallowance of long term capital loss had been made only out of surmises, suspicion and conjectures. Entitled to claim the long term capital loss of ₹ 62,12,753/- and the same would be eligible to be carried forward to subsequent years for set off against long term capital gains u/s 74 of the Act.
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