Assessee-company sold shares of two closely held companies which it had purchased earlier at a huge premium and claimed long-term capital loss of Rs. 24 crores. The same was set off against long-term capital gain arising from slump sale under section 50B. Assessing Officer disallowed said loss on the ground that the same was not supported by any valid and reasonable explanations and documents and, thus, the same was a pre-planned transaction to avoid tax. CIT(A) deleted the addition. On appeal, the Tribunal held that the assessee had made investments in preference shares of two unlisted companies during the year 2014-15, and these investments were reflected in the audited financial statements of the assessee for the assessment year 2015-16 under ‘Non-Current Investments’, and the same was reported in the Director’s report of the company in compliance with section 186. Further, these transactions were executed through proper banking channels and substantiated by share certificates, CA valuation reports, and accounting entries. Further, no evidence was brought on record by the Assessing Officer to suggest that the loss was pre-determined, the buyer of shares colluded with the assessee, and the share purchase\/sale consideration was not real. Accordingly, on facts, long-term capital loss of Rs. 24 crores on sale of shares was genuine, and assessee was entitled to set off this loss against long-term capital gain arising from slump sale under section 50B. Order of CIT A) affirmed.\u00a0 (AY. 2018-19)<\/p>\n","protected":false},"excerpt":{"rendered":"
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