Law:

Section:

Section 47 of the Income-tax Act, 1961, read with section 4 of the Companies Act, 1956 - Capital gains - Transactions not regarded as transfer - Assessment year 1975-76 - Whether definition of 'holding company' contained in section 4(1) of the Companies Act can be applied for purpose of section 47(iv) so as to disallow short-term capital loss incurred by assessee-company on sale of share to a company which was a wholly-owned subsidiary of another company which was a wholly-owned subsidiary of assessee, by invoking section 47(iv) - Held, no FACTS The assessee was a private limited company earning dividend and interest income from its activities of making or holding investments and financing industrial enterprises. For the assessment year 1975-76, for which the accounting period ended on 31-3-1975, the assessee-company filed its return of income declaring loss. The total loss included an amount claimed by the assessee to have been incurred on account of short-term capital loss. In the assessment proceedings, the ITO noted that during the accounting period the assessee had sold its 2,300 shares of S, a private limited company, to company 'A' for Rs. 13,600 only at the rate of Rs. 6 per share. The said shares had been purchased by the assessee-company for Rs. 1,38,345 at the rate of Rs. 60.15 per share. The difference of Rs. 1,24,545 was claimed by the company as short-term loss occasioned as a result of transfer. The ITO rejected the assessee's claim for loss on the ground that the transferee-company was a subsidiary company and, therefore, the case was covered by the provisions of section 47(iv). The transferee-company was in fact subsidiary of a company which was a subsidiary of the assessee-company. The Commissioner confirmed the finding of the ITO. The Tribunal confirmed the finding of both the lower authorities that the provisions of section 47(iv) were attracted because the transferee-company was a wholly-owned subsidiary of another company which was a wholly-owned subsidiary of the assessee-company. For this purpose, the Tribunal relied on the definitions of 'holding company' and 'subsidiary company' as given in section 4 of the Companies Act, 1956. On…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492