2022 (2) TMI 38

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..... OURT] squarely apply. Coming to the facts of Assessment Year 2009-10, we find that the assessee has returned short term capital loss on forfeiture of convertible share warrants which was accepted as such by order framed u/s 143(1) of the Act. However, in the order framed u/s 153C of the Act, the same was disallowed. A perusal of the assessment order clearly shows that there is no nexus between the addition made in the assessment order and in the incriminating material found at the time of search - we do not find any merit in the addition made in Assessment Year 2009-10. - Decided in favour of assessee. - ITA No. 2509/DEL/2016 ITA No. 2510/DEL/2016 - - - Dated:- 27-1-2022 - SHRI SAKTIJIT DEY, JUDICIAL MEMBER, AND SHRI N.K. BILLAIY .....

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..... 3 wherein the short term capital gain of ₹ 1,57,78,318/- was assessed as business income. 7. A perusal of the assessment order shows that there is no reference to any incriminating material found during the course of search. In fact, the original assessment was framed vide order dated 13.12.2010 wherein short term capital gain was accepted as such. Therefore, in our considered opinion, in the assessment order framed u/s 153C of the Act, there has to be direct nexus between incriminating material found during the course of search qua the addition, devoid of which, the ratio laid down by the Hon'ble Jurisdictional High Court in the case of Kabul Chawla 380 ITR 573 and Meeta Gutgutia 395 ITR 526 squarely apply. 8. Coming to the .....

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..... ferent view. The restrictive meaning given to the word transfer by the Supreme Court decision in Vania Silk Mills P.Ltd. (1991) 191 ITR 647 has been over ruled by the larger Bench of the Supreme Court in the case of Mrs.Grace Collis (2001) 248 ITR 323. In the present case, we find that the forfeiture of the convertible warrant has resulted in extinguishment of the right of the assessee to obtain a share in BLB Ltd. It is not a case where the asset itself has been extinguished or destroyed. A share in a company is nothing but a share in the ownership of the company. While the right of the assessee to share in the ownership of the company BLB Ltd. Stands extinguished on account of the forfeiture, the company, with all its assets, contin .....

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