Shares Sale/Purchase Not a Colourable Transaction Based on Mere Suspicion

CIT Vs Lakshmangarh Estate & Trading Co Ltd (Calcutta High Court) The case of CIT Vs Lakshmangarh Estate & Trading Co Ltd, adjudicated by the Calcutta High Court, revolves around the assessment of a significant loss claimed by the assessee company on the sale of shares. The dispute arose when the Assessing Officer disallowed the set-off of this loss against long-term capital gains, alleging the transaction to be a colourable one aimed at tax evasion. The assessee company purchased 13,04,700 shares of M/s. Hindustan Development Corporation Ltd. in July 1994, subsequently selling them ...