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TMI Blog2008 (1) TMI 558X X X X Extracts X X X X X X X X Extracts X X X X ..... t- dismissing the appeal, that the transaction between the assessee and the finance company was reflected in the returns filed by both the parties. The Revenue failed to establish the transaction as sham and colourable. - 302 of 2004 - - - Dated:- 23-1-2008 - DEEPAK VERMA AND K.L MANJUNATH JJ. M.V. Seshachala for the appellants. Ashok Kulkarni for the respondent. JUDGMENT The judgment of the court was delivered by 1. K. L. MANJUNATH J. - Heard the learned counsel for the parties. 2. This appeal is by the Revenue challenging the order passed by the Income Appellate Tribunal, Bangalore Bench in Case No.121/Bang/98 dated September 29, 2003, wherein the Tribunal has confirmed the order passed by the Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amalgamated Coffee Estates P. Ltd. and the same has been treated as a seed money for commencement of the business and that the said money was received by the assessee with a specific understanding that out of the income so earned 45 per cent. of the same has to be shared with M/s. Mysore Amalgamated Coffee Estates P. Ltd. which is the financing company. By holding that there is no colourable device adopted by the assessee, the order of the Assessing Officer was set aside and relief was given to the assessee. 4. Being aggrieved by the order of the Commissioner of Income-tax (Appeals) the Revenue filed an appeal before the Income-tax Appellate Tribunal, Bangalore Bench. The Income-tax Appellate Tribunal, after hearing the parties also ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee Trading Company as on March 31, 1993, to show the capital investment of the proprietary concern of the assessee was received from M/s. Mysore Amalgamated Coffee Estates P. Ltd. amounting to Rs.1,30,00,000. He has also produced the return filed by M/s. Mysore Amalgamated Coffee Estates P. Ltd. for the assessment year 1994-95 to show the amount received by the said company from the assessee herein. They are taken on record. 7. He further contends that when M/s Mysore Amalgamated Coffee Estates P. Ltd. is also an assessee and assessed to tax, when the return filed by such company is accepted by the Assessing Officer and when the said company had reflected the amount of Rs.1,30,00,000 paid by it to the assessee herein and the amount of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndum of understanding instead of paying the interest, the profit has been shared at the ratio of 35 per cent. and 45 per cent. This fact is not disputed by the Revenue. The transaction between the assessee and the aforesaid company are reflected in the returns filed by both the parties. When the Revenue has accepted the return filed by M/s. Mysore Amalgamated Coffee Estates P. Ltd., we are of the opinion that the Revenue cannot reject the return filed by the assessee, on the ground that it is a sham and colourable transaction. If the transaction is held to be a sham and colourable transaction, the Revenue cannot treat the said transaction as genuine so far as it relates to one assessee and rejected the same in case of the other assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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