Case: The Commissioner of Income Tax Vs. M/S. Hede Consultancy Company Private Limited

3. Briefly, the facts of the case are that the Respondent is a Company engaged in a business of Travel Agency and consultancy. On 02.12.1996, the Respondent filed the return of income declaring a total income of Rs.On 19.03.1999, the assessment was reopened under Section 147 of the Income Tax Act, by issuing a notice under Section 148. The Respondent filed a letter requesting that the return of Income filed on 02.12.1996 be considered as the return under Section 148. The assessment was completed by Order dated 30.03.2001 thereby disallowing the claim of the Respondents of long term capital loss of Rs.1,17,87,564/and, consequently, a sum of Rs.45,99,337/were brought to tax. The Commissioner of Income Tax in the Appeal preferred by the Respondent, by Order dated 18.10.2002, reversed the assessment Order holding that the transfer of the shares is not a colourable transactions and hence the long term capital loss is required to be set off against the short term capital gains made by sale of shares of MackhinonMackenzie Co. Ltd. The Appeal preferred before the Income Tax Appellate Tribunal, by Order dated 27.01.2006, upheld the Order of the Commissioner of Income Tax holding that both the transactions of transfer of shares of its group companies as well as sale os shares of MackhinonMackenzie Co. Ltd., are genuine transactions. Being aggrieved by the impugned Order dated 27.01.2006, the Appellants have preferred the present Appeal under Section 260A of the Income Tax Act.

Court's reasoning:
In the present Appeal, we find that there is no challenge by the Appellants to the findings of the Tribunal that the transactions were genuine and that the price at which the shares were sold were not inflated. In such circumstances, the contention of Shri Y. V. Nadkarni, learned Counsel appearing for the Respondents, that as the genuineness of the transactions has not been disputed by the Appellants nor have been assailed in the present Appeal, the question of contending that the transactions were colourable transactions has to be accepted. The findings of facts arrived at by the Tribunal cannot beby this Court in the present Appeal.Considering that the findings of facts arrived at by the Tribunal and the CIT(A) are on the basis of material on record and there is nothing brought by the Appellants to disclose any perversity, in such findings, the question of any interference by this Court under Section 260A of the Income Tax Act, would not arise.Taking note of the said observations of the Apex Court, we find that the Tribunal has not committed any error in coming to the conclusion that the transaction arrived at by the Respondents was legitimate within the framework of law. As such, we find considering the findings of facts arrived at by the Authorities below, that there is nothing on record to assume that the transaction was dubious and that the exercise was to avoid tax by a colourable device. The Tribunal found that the transactions were in accordance with law and have been duly implemented. Hence, we find that the substantial question of law framed by this Court is to be answered against the Appellants.