Pr. Commissioner of Income-tax-12 v. Kingpin Investment & Finance P. Ltd
[Citation -2019-LL-1014-115]
Citation | 2019-LL-1014-115 |
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Appellant Name | Pr. Commissioner of Income-tax-12 |
Respondent Name | Kingpin Investment & Finance P. Ltd. |
Court | HIGH COURT OF BOMBAY |
Relevant Act | Income-tax |
Date of Order | 14/10/2019 |
Assessment Year | 2002-03 |
Judgment | View Judgment |
Keyword Tags | indexed cost of acquisition • long term capital loss • documentary evidence • preference shares • bogus transaction • sham transaction • allotment letter • dividend |
Bot Summary: | The Revenue urges only the following question of law for our consideration :- Whether in the facts and circumstances of the case and in law, the Tribunal was justified in holding that Long Term Capital Loss arising from the transfer of preference shares was not a sham transaction 1 of 4 ::: Uploaded on - 19/10/2019 ::: Downloaded on - 23/10/2019 10:47:07 ::: Uday S. Jagtap 931-17-ITXA-91.doc 3. These shares had been allotted by Welspun Mercantile Pvt. Ltd. and Welspun Trading Pvt. Ltd. to the respondent for appropriate consideration. Out of the above preference shares, the respondent had sold in the previous year relevant to the subject assessment year 215000 shares of Mercantile Welspun Pvt. Ltd. to Global Home-tex Ltd. and 30630 shares of M/s. Welspun Trading Pvt. Ltd. to M/s. Sheetal Financial Services Pvt. Ltd. The Assessing Officer noted that the transferee of the shares had suppressed the consideration to avoid payment of the stamp duty. Funds for the purchase of the preference shares had been received from a group company namely M/s. Wellson India Ltd. and M/s. Glofame Cotton Yarn Ltd. Thus, the Assessing Officer came to the conclusion that as these companies belong to the same group, the entire transaction is a sham transaction. On further appeal, the Tribunal on facts found that purchase of the preference shares was shown in the balace-sheet as on 31 st March, 2001 filed along with return of income for the Assessment Year 2001-02. The impugned order further records a finding of fact that the purchase of preference shares was genuine in as much as allotment letter, share certificate, consideration paid etc. On facts the Tribunal found that the loss which has arisen on the sale of the shares was due to indexed cost of acquisition and has been claimed as a set off against any profits. |