What did the High Court hold?

The High Court found that the write-off was a part of a duly approved capital reduction scheme and admitted the appeal for further consideration.

The appellant wrote off an investment in preference shares as part of a court-approved capital reduction scheme. The Assessing Officer disallowed the resulting capital loss.

What were the issues?

Whether the disallowance of capital loss on extinguishment and write-off of investment due to a capital reduction scheme was justified.

Religare Enterprises Ltd vs ACIT | Delhi High Court 2024

$~74 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 141/2024

RELIGARE ENTERPRISES LTD

..... Appellant Through: Mr. Ajay Vohra, Sr. Adv. with Mr. Rohit Jain, Mr. Aniket D. Agrawal & Mr. Abhishek Singhvi, Advs.

versus

ACIT CIRCLE 19 NEW DELHI

..... Respondent Through: Mr. Sunil Agarwal, SSC with Mr. Shivansh B. Pandya, JSC & Mr. Utkarsh Tiwari, Adv.

CORAM:

HON'BLE MR. JUSTICE YASHWANT VARMA HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV

O R D E R %

28.02.2024

Notice. Since the respondent is represented by Mr. Agarwal, no further steps need be taken. 2. Having heard Mr. Vohra, learned senior counsel appearing in support of the appeal, we prima facie find that the write-off of the investment in question is stated to be a part and parcel of the capital reduction scheme of arrangement which was duly approved. In view of the aforesaid, we are of the considered opinion that the appeal would merit further consideration. 3. We consequently admit the appeal on the following question of law:

(i) Whether on the facts and circumstances of the case, the Income Tax Appellate Tribunal erred in law in upholding This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 12:44:22

the action of the Assessing Officer in disallowing the capital loss suffered by the appellant on extinguishment and consequent write-off of investment made in preference shares of RCML as a result of Court approved Capital Reduction Scheme of the said investee company? 4. Let the matter be called again on 29.04.2024.

YASHWANT VARMA, J

PURUSHAINDRA KUMAR KAURAV, J FEBRUARY 28, 2024/kk

This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 12:44:22

RELIGARE ENTERPRISES LTD vs. ACIT CIRCLE 19 NEW DELHI

What did the High Court hold?

What were the facts?

What were the issues?

Which sections of the Income-tax Act were involved?

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