2018 (2) TMI 113

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..... t did not ignore the underlying validity of the share transaction or transfer. It proceeded to bring the amounts into question to tax – either as business receipts or as business losses. Such being the case, this Court is of the opinion that alike treatment had to be given. Furthermore, at the stage, when the ITAT intervened in gift tax proceedings (which are the subject matter in these appeals), it considered only the validity of the proceedings, but, did not consider whether in fact the transaction under Section 4(1)(a) amounted to a deemed gift; no conclusive finding in that regard was rendered; nor any finding could have been rendered or was given. For the above reasons, the impugned orders are hereby set aside. The matters are remit .....

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..... osses on account of the difference between the material value shown by them (of the rights issue) and the consideration received by them. The Assessing Officer (AO), while considering the income tax returns, held that the transaction was sham and proceeded to disregard the claim for capital loss. However, the assessment was concluded on the basis that the amounts received were in fact business receipts. The assessee s appeals before the CIT(A) and ultimately to the ITAT were successful. The Revenue appealed to this Court. By a judgment ( Commissioner of Income Tax Vs. Jindal Equipment Leasing Ors. ITA 174/2003 and connected cases), the Court reversed the findings of the ITAT. 3. In the meanwhile, Gift Tax Officer formed an opinion t .....

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..... ssee contended that the approach and findings of the ITAT, taking cognizance of the fact that the declaration with respect to the transaction being sham, was logical. It was urged that once the ITAT took note of the fact that the transaction was invalid or a device, the position with respect to how it had to be treated between the two parties was clear. In these circumstances, there was no question of resorting to the assessee under Section 16 of the Act in the present case. 7. This Court has considered the submissions. It is not disputed that in Abhinandan Investments, this Court reversed the ITAT s findings and held that the consideration received and shown by the assessee to be a capital loss in income tax proceedings was a devic .....

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