Assessee-company purchased Compulsorily Convertible Debentures (CCD) of company Imperial Consultants & Sec .Pvt Ltd. (CSL)  at Rs. 85 per debenture from its subsidiary company which were later sold to its holding company Kroner Investment Ltd. (KIL) at Rs. 61.88 per debenture resulting in short-term capital loss. AO disallowed the capital loss on ground that transactions of sale and purchase of CCDs which had resulted in loss with related parties of assessee were actually colourable device to set off huge profits earned by assessee during year. Tribunal held that sale price of CCDs at Rs.61.88 per debenture was duly supported by an independent valuation report of a chartered accountant which was based on assets and liabilities of ICSL who had suffered huge loss during year.  Entire documentation such as details of investments in CCDs of ICSL, certified true copy of Board Resolution giving consent to assessee to invest its funds in securities of ICSL, etc., were furnished by assessee and no flaws were found by revenue in aforesaid documents . Purchase price of Rs. 85 per debenture was kept by assessee to ensure that its subsidiary company did not incur any loss on its investments and it was for commercial reasons On facts, impugned short-term capital loss suffered by assessee was to be construed as a genuine loss and could not be construed as a colourable device to set off huge profits earned by assessee during year and same was to be allowed. (AY. 2012-13)