Loss claimed arising out of sham transaction between two AE is disallowed

Samtel Glass Ltd. Vs DCIT (ITAT Delhi) ITAT Delhi held that loss claimed arising out of the sham transaction between two associated enterprises (AE) is disallowed. Facts- In the course of the assessment proceedings, AO observed that the assessee­ company has inter alia claimed deduction of Rs.8,55,17,103/- on account of impairment loss as per note 26 of the balance sheet. AO issued show cause notice for substantiation of aforesaid claim of deduction along with original agreement towards payment of security deposit to M/s. Samtel Avionics Ltd. (SAL) which is stated to be associate company of t...