TMI Blog2010 (4) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... he funds made available by the group companies and observing that the assessee company had entered into these transactions on the same day only to create capital loss of investment held by it. Held that: It is also immaterial as to who the purchaser of the shares was, so long as the shares are not sold at a price which was higher or lower than their fair price and there was no restriction on sale of such shares to a group company. All these factors could have been relevant had the Tribunal found that the transactions undertaken by the assessee company were a colourable device with a view to cause a loss to the Revenue. As noted by the Tribunal, neither the assessee company nor the amalgamated company adjusted the capital loss on account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f computation of capital gain worked out to Rs.10,11,02,224/-, thereby resulting in capital loss of Rs.2,22,26,224/-. 3. The assessee had also purchased share of GDOPL on 4th April, 1996 for a consideration of Rs.8,40,83,094 and had sold those shares to Gillette Group India Private Limited(GGIPL) on 30th December, 1999 for a sale consideration of Rs.8,36,64,770/-, thereby resulting in loss of Rs.4,18,324/-. However, due to application of cost index, the capital loss on sale of these shares worked out to Rs.2,35,76,735/- The Assessing Officer noticed that the assessee company had outstanding liability of Rs.19.77 crores, used for purchase of shares of group companies. He concluded that the transactions were entered on the same date merely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Gains. It was also noted that even in the assessment of 2002-2003 the amalgamated company had brought forward the losses of earlier years. The Tribunal, therefore, felt that had the shares been sold as a device to obtain any unfair tax benefit, the assessee company or the amalgamated company would have immediately adjusted it against income from Long-Term Capital Gains. The Tribunal accepted the explanation given by the assessee that Gillette Company having suffered huge losses was not in a position to carry on its manufacturing activities and wanted to reduce its liability, prior to amalgamation by paying all funds to its group. The Tribunal was of the view that it was immaterial whether the loan was due to a group company or to an outsi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shares held by it, for the purpose of reducing its liabilities. It is also absolutely immaterial that the liabilities of the assessee company were towards group companies. Similarly, it is also immaterial that the shares sold by the assessee company were of another group company. It is also immaterial as to who the purchaser of the shares was, so long as the shares are not sold at a price which was higher or lower than their fair price and there was no restriction on sale of such shares to a group company. All these factors could have been relevant had the Tribunal found that the transactions undertaken by the assessee company were a colourable device with a view to cause a loss to the Revenue. As noted by the Tribunal, neither the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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