ACIT CIRCLE-58(1), DELHI vs. MAGICAL ENTERPRISES L.L.P , DELHI

ITA 1059/DEL/2022Status: DisposedITAT Delhi20 December 2024AY 2016-17Bench: SHRI PRADIP KUMAR KEDIA (Accountant Member), SHRI VIMAL KUMAR (Judicial Member)10 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s decision, finding no violation of Section 10(34A) and no evidence of a sham transaction. The Tribunal also found the CIT(A)'s reasoning for allowing LTCG at the special rate to be sound.

What were the facts?

The assessee claimed exemption under Section 10(34A) on profits from a share buyback scheme. The Assessing Officer disallowed this exemption, alleging the transactions were a sham to convert unaccounted money. The assessee also claimed Long Term Capital Gains (LTCG) taxed at a special rate.

What were the issues?

Whether the exemption under Section 10(34A) for share buyback profits was rightly denied by the AO, and whether LTCG was correctly treated as income from other sources instead of capital gains.

Which sections of the Income-tax Act were involved?

Section 10(34A),Section 115QA,Section 112,Section 143(3),Section 143(2)

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Income Tax Appellate Tribunal, DELHI “E” BENCH: NEW DELHI

Before: SHRI PRADIP KUMAR KEDIA & SHRI VIMAL KUMAR

For Appellant: Shri Amit Shukla, Sr.DR
For Respondent: Shri Suresh Gupta, CA
Hearing: 23.10.2024Pronounced: 20.12.2024

PER PRADIP KUMAR KEDIA, AM : The captioned appeal has been filed at the instance of the Revenue seeking to assail the First Appellate order dated 16.03.2022 passed by Ld.

Commissioner of Income Tax (A), National Faceless Appeal Centre (“NFAC”), Delhi [“Ld.CIT(A)”] under s. 250 of the Income Tax Act, 1961 [“the Act”] arising from the assessment order dated 31.12.2018 passed u/s 143(3) of the Act pertaining to assessment year 2016-17. The assessee, in turn, has also filed Cross Objection No. 86/Del/2022 against the Revenue’s Appeal in ITA No.1059/Del/202

The order continues below.

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