Preference Share Redemption not taxable as deemed dividend & amounts to ‘transfer’

Parle Biscuits Pvt. Ltd. Vs ACIT (ITAT Mumbai)- It is  held that redemption of preference shares amounts to ‘transfer’ of a capital asset under the Income-tax Act and any loss on redemption thereon would thus be allowable as a capital loss. The Tribunal, relyied on the Supreme Court decisions in the case of Anarkali Sarabhai v. CIT [1996] 224 ITR 422 (SC) and Kartikeya Sarabhai v. CIT [1997] 228 ITR 163 (SC) , held that redemption of preference shares has to be considered as ‘transfer’ and loss on redemption thereof is

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