Union of India v. Azadi Bachao Andolan

170 ITR 238High Court1988#6273 most cited

What is Union of India v. Azadi Bachao Andolan authority for?

An arrangement that is legally permissible and reduces tax burden should not be automatically viewed with disfavour or considered illegitimate, especially in light of the Supreme Court's clarification of the McDowell case in Azadi Bachao Andolan.

18

judgments rely on this decision, according to BharatTax’s citation analysis of 366,005 Indian tax judgments — from 2015 to 2025.

Also referred to as

Union of India v. Azadi Bachao Andolan · M.V. Vallipappan v. ITO · 170 ITR 238 · tax planning · colourable device · illegitimate tax planning · McDowell case · legitimate tax avoidance

Sections most often in play

Section 35DSection 40(a)(i)Section 80HHCSection 28(iiid)Section 35(2AB)Section 143(3)Section 35Section 45

Issues it is cited on

section 35dsection 10(33)azadi bachao andolancolourable devicewritten down valuesection 80hblock of assetssection 2(47)short term capital gainsput to usebusiness connectionsection 80hhc

Judgments citing Union of India v. Azadi Bachao Andolan

Bajaj Holdings & Investment Ltd ( Formerly Bajaj Auto Ltd), Mumbai vs. ACIT Ltu, Mumbai

ITA 5299/MUM/2010[2006-07]Status: DisposedITAT Mumbai17 Feb 2025AY 2006-07
Section 143(3)

…of tax by resorting to dubious methods. It is the obligation of every citizen to pay the taxes honestly without resorting to subterfuges." 5. The Hon'ble Supreme Court affirmed the view token by the Madras High Court in M. V. Valliappan v. TTO [1988] 170 ITR 238 and the Gujarat High Court in Banyan and Deny vs. CIT (1996) ITA No. 6838/Mum/2008, ITA No.6674/Mum/2008 ITA No.1223/Mum/2010, ITA No. 535/Mum/2010 ITA No.5299/Mum/2010, ITA No.4632/Mum/2010 Assessment Years 2004-05, 2005-06 & 2006-07 41 222 ITR 831. Reference was also made to the judgment in CWT v. Arvind Narottam [1988] 17…

Bajaj Holdings & Investments Ltd ( Formerly Known As Bajaj Auto Ltd), Mumbai vs. Addl CIT RG 3(1), Mumbai

The appeals are partly allowed

ITA 6838/MUM/2008[2004-2005]Status: DisposedITAT Mumbai17 Feb 2025AY 2004-2005

Bench: SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY (Judicial Member)

For Appellant: Ms. Vasanti PatelFor Respondent: Shri Ankush Kapoor
Section 143(3)

…payment of tax by resorting to dubious methods. It is the obligation of every citizen to pay the taxes honestly without resorting to subterfuges." 5. The Hon'ble Supreme Court affirmed the view token by the Madras High Court in M. V. Valliappan v. TTO [1988] 170 ITR 238 and the Gujarat High Court in Banyan and Deny vs. CIT (1996) ITA No. 6838/Mum/2008, ITA No.6674/Mum/2008 ITA No.1223/Mum/2010, ITA No. 535/Mum/2010 ITA No.5299/Mum/2010, ITA No.4632/Mum/2010 Assessment Years 2004-05, 2005-06 & 2006-07 222 ITR 831. Reference was also made to the judgment in CWT v. Arvind Narottam [1988] 173 FIR 479 and Mathuram…

DCIT, Circle- 27(2), New Delhi vs. Wharton Engineers & Developers Pvt. Ltd. (Earlier Wilful Finance Investment Co. Pvt.), New Delhi

In the result the appeal of the revenue is dismissed

ITA 7841/DEL/2018[2014-15]Status: DisposedITAT Delhi27 Nov 2024AY 2014-15

Bench: Sh. Pradip Kumar Kedia & Sh. Sudhir Kumarassessment Year: 2014-15 Dcit Vs. Wharton Engineers & Circle 27 (2) Developers Pvt. Ltd. New Delhi (Earlier Willful Finance Investment Co.Pvt.) New Delhi Pan No.Aaacw0629C (Appellant) (Respondent)

Section 115BSection 142(1)Section 143(2)Section 143(3)Section 37

…s otherwise valid in law cannot be treated as non est merely on the basis of some underlying motive supposedly resulting in some economic detriment or prejudice to the national interests. Hon'ble Madras High Court in the case of M. V. Valioppan v. ITO [1988] 170 ITR 238 (Mad) has held that McDowell decision does not rule out Ignoring of genuine /real transactions being ignored merely on the ground that it results in reducing the tax burden. Where there is a commercial or a business purpose in a transaction which only means that a transaction has the result of reducing the tax burden as a result of or a real depr…

M/S. Bajaj Auto Ltd., Mumbai vs. Addl. CIT. RG. - 3(1), Mumbai

ITA 1496/MUM/2007[2003-2004]Status: DisposedITAT Mumbai09 Sept 2024AY 2003-2004
Section 115JSection 14ASection 250Section 35DSection 40Section 80H

…payment of tax by resorting to dubious methods. It is the obligation of every citizen to pay the taxes honestly without resorting to subterfuges." 5. The Hon'ble Supreme Court affirmed the view token by the Madras High Court in M. V. Valliappan v. TTO [1988] 170 ITR 238 and the Gujarat High Court in Banyan and Deny vs. CIT (1996) 222 ITR 831. Reference was also made to the judgment in CWT v. Arvind Narottam [1988] 173 FIR 479 and Mathuram Agrawal v. State of Madhya Pradesh (1999) 8 SCC 667. It: was further observed that the word "device" or "sham" could not be used to defeat the effect of a legal situation. 6. I…

Bajaj Holdngs & Investment Ltd ( Erstwhile Bajaj Auto Ltd), Mumbai vs. Addl CIT RG 3(1), Mumbai

In the result, the appeal of the assessee is partly allowed and appeal of the revenue is dismissed

ITA 3043/MUM/2010[2002-013]Status: DisposedITAT Mumbai24 Jun 2024AY 2002-013

Bench: Shri Vikas Awasthy & Shri Amarjit Singhbajaj Holdings & Vs. Additional Commissioner Investment Ltd. Of Income-Tax, Range 3(1) Erstwile Bajaj Auto Ltd.) Aayakar Bhavan, Bajaj Bhavan, 226, M.K. Road, Nariman Point, Mumbai – 400 020 Mumbai – 400 021 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No:Aaacb3370K Appellant .. Respondent Dcit-3(4) Vs. M/S Bajaj Holding & Room No. 481-2, 4Th Floor, Investment Limited Aaykar Bhavan, (Erstwhile Bajaj Auto Ltd) Mumbai – 400020 226, Bajaj Bhavan, 2Nd Floor, Jamnalal Bajaj Marg, Nariman Point Mumbai – 400 021 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No:Aaacb3370K Appellant .. Respondent Appellant By : Percy Pardiwala & Vasanti Patel Respondent By : Ankush Kapoor

For Appellant: Percy Pardiwala &For Respondent: Ankush Kapoor
Section 143(3)Section 2(47)

…payment of tax by resorting to dubious methods. It is the obligation of every citizen to pay the taxes honestly without resorting to subterfuges." 5. The hon'ble Supreme Court affirmed the view token by the Madras High Court in M. V. Valliappan v. TTO [1988] 170 ITR 238 and the Gujarat High Court in Banyan and Deny vs. CIT (1996) 222 ITR 831. Reference was also made to the judgment in CWT v. Arvind Narottam [1988] 173 FIR 479 and Mathuram Agrawal v. State of Madhya Pradesh (1999) 8 SCC 667. It: was further observed that the word "device" or "sham" could not be used to defeat the effect of a legal situation. 6. I…

Addl CIT RG 3(1), Mumbai vs. Bajaj Auto Ltd, Mumbai

In the result, the appeal of the assessee is partly allowed and appeal of the revenue is dismissed

ITA 2899/MUM/2010[2002-03]Status: DisposedITAT Mumbai24 Jun 2024AY 2002-03

Bench: Shri Vikas Awasthy & Shri Amarjit Singhbajaj Holdings & Vs. Additional Commissioner Investment Ltd. Of Income-Tax, Range 3(1) Erstwile Bajaj Auto Ltd.) Aayakar Bhavan, Bajaj Bhavan, 226, M.K. Road, Nariman Point, Mumbai – 400 020 Mumbai – 400 021 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No:Aaacb3370K Appellant .. Respondent Dcit-3(4) Vs. M/S Bajaj Holding & Room No. 481-2, 4Th Floor, Investment Limited Aaykar Bhavan, (Erstwhile Bajaj Auto Ltd) Mumbai – 400020 226, Bajaj Bhavan, 2Nd Floor, Jamnalal Bajaj Marg, Nariman Point Mumbai – 400 021 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No:Aaacb3370K Appellant .. Respondent Appellant By : Percy Pardiwala & Vasanti Patel Respondent By : Ankush Kapoor

For Appellant: Percy Pardiwala &For Respondent: Ankush Kapoor
Section 143(3)Section 2(47)

…payment of tax by resorting to dubious methods. It is the obligation of every citizen to pay the taxes honestly without resorting to subterfuges." 5. The hon'ble Supreme Court affirmed the view token by the Madras High Court in M. V. Valliappan v. TTO [1988] 170 ITR 238 and the Gujarat High Court in Banyan and Deny vs. CIT (1996) 222 ITR 831. Reference was also made to the judgment in CWT v. Arvind Narottam [1988] 173 FIR 479 and Mathuram Agrawal v. State of Madhya Pradesh (1999) 8 SCC 667. It: was further observed that the word "device" or "sham" could not be used to defeat the effect of a legal situation. 6. I…

DCIT RG. - 3(1), Mumbai vs. M/S. Bajaj Auto Ltd., Mumbai

In the result, appeal filed by the assessee is partly allowed

ITA 4372/MUM/2005[2001-2002]Status: DisposedITAT Mumbai23 Feb 2024AY 2001-2002

Bench: Shri Aby T Varkey, Hon’Ble & Shri S. Rifaur Rahman, Hon'Blem/S. Bajaj Auto Limited V. Dcit – Range – 3(1) Bajaj Bhavan, 226-Nariman Point 6Th Floor, Aayakar Bhavan Mumbai – 400021 M.K. Road, Mumbai - 400020 Pan : Aaacb3370K (Appellant) (Respondent) Dcit – Range – 3(1) V. M/S. Bajaj Auto Limited Room No. 623, 6Th Floor Bajaj Bhavan, 226-Nariman Point Mumbai – 400021 Aayakar Bhavan M.K. Road, Mumbai - 400020 Pan : Aaacb3370K (Appellant) (Respondent) Assessee Represented By : Ms. Vasanti Patel& Shri Kirit Kamdar Department Represented By : Shri Ankush Kapoor

Section 143(4)(b)Section 234Section 35Section 35DSection 37(1)Section 40

…IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “F”, MUMBAI BEFORE SHRI ABY T VARKEY, HON’BLE JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, HON'BLE ACCOUNTANT MEMBER M/s. Bajaj Auto Limited v. DCIT – Range – 3(1) Bajaj Bhavan, 226-Nariman Point 6th Floor, Aayakar Bhavan Mumbai – 400021 M.K. Road, Mumbai - 400020 PAN : AAACB3370K (Appellant) (Respondent) DCIT – Range – 3(1) v. M/s. Bajaj Auto Limited Room No. 623, 6th Floor Bajaj Bhavan, 226-Nariman Point Mumbai – 400021 Aayakar Bhavan M.K. Road, Mumbai - 400020 PAN : AAACB3370K (Appellant) (Respondent) Assessee Represented by : Ms. Vasanti Patel& Shri Kirit Kamdar…

M/S. Bajaj Auto Ltd., Mumbai vs. DCIT RG. - 3(1), Mumbai

In the result, appeal filed by the assessee is partly allowed

ITA 4236/MUM/2005[2001-2002]Status: DisposedITAT Mumbai23 Feb 2024AY 2001-2002

Bench: Shri Aby T Varkey, Hon’Ble & Shri S. Rifaur Rahman, Hon'Blem/S. Bajaj Auto Limited V. Dcit – Range – 3(1) Bajaj Bhavan, 226-Nariman Point 6Th Floor, Aayakar Bhavan Mumbai – 400021 M.K. Road, Mumbai - 400020 Pan : Aaacb3370K (Appellant) (Respondent) Dcit – Range – 3(1) V. M/S. Bajaj Auto Limited Room No. 623, 6Th Floor Bajaj Bhavan, 226-Nariman Point Mumbai – 400021 Aayakar Bhavan M.K. Road, Mumbai - 400020 Pan : Aaacb3370K (Appellant) (Respondent) Assessee Represented By : Ms. Vasanti Patel& Shri Kirit Kamdar Department Represented By : Shri Ankush Kapoor

Section 143(4)(b)Section 234Section 35Section 35DSection 37(1)Section 40

…IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “F”, MUMBAI BEFORE SHRI ABY T VARKEY, HON’BLE JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, HON'BLE ACCOUNTANT MEMBER M/s. Bajaj Auto Limited v. DCIT – Range – 3(1) Bajaj Bhavan, 226-Nariman Point 6th Floor, Aayakar Bhavan Mumbai – 400021 M.K. Road, Mumbai - 400020 PAN : AAACB3370K (Appellant) (Respondent) DCIT – Range – 3(1) v. M/s. Bajaj Auto Limited Room No. 623, 6th Floor Bajaj Bhavan, 226-Nariman Point Mumbai – 400021 Aayakar Bhavan M.K. Road, Mumbai - 400020 PAN : AAACB3370K (Appellant) (Respondent) Assessee Represented by : Ms. Vasanti Patel& Shri Kirit Kamdar…

Rachit V Shah, Hyderabad vs. ITO, Ward-7(3), Hyderabad

In the result, the appeal of the assessee is dismissed

ITA 420/HYD/2022[2015-16]Status: DisposedITAT Hyderabad15 Mar 2023AY 2015-16

Bench: Shri Rama Kanta Panda & Shri Laliet Kumar

For Appellant: Shri Sunil Kumar Jain, CAFor Respondent: Shri Kumar Adithya for Shri K.P.R.R.Murthy, Sr.AR
Section 142(1)Section 143(1)Section 143(3)Section 54F

…terms. Thirdly, we would like to draw your honours kind attention to the following case laws: A. The Apex Court in Union of India vs. Azadi Bachao Andolan (2003) 177 Taxation 775 has approved a decision of Madras High Court in M. V. Vallipappan vs. ITO (1988) 170 ITR 238, where the Madras HC has held that "the decision in Me Dowell case (supra) cannot be read as laying down that every attempt at tax planning is illegitimate and must be ignored, or that every transaction or arrangement which is perfectly permissible under 9 Rachit v. Shah law, which has the effect of reducing the tax burden of the assessee, must…

M/S. Star Chemical (Bombay) P. Ltd., Mumbai vs. DCIT CIT - 3(3), Mumbai

ITA 5987/MUM/2006[1996-1997]Status: DisposedITAT Mumbai27 May 2022AY 1996-1997

Bench: Shri Kuldip Singh & Shri Gagan Goyal

For Appellant: Shri K. Shivaram, Sr. A.R. &For Respondent: Shri B.K. Bagchi, Sr. A.R

…IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “E”, MUMBAI BEFORE SHRI KULDIP SINGH, JUDICIAL MEMBER AND SHRI GAGAN GOYAL, ACCOUNTANT MEMBER ITA Nos.5986 & 5987/M/2006 Assessment Years: 1995-96 & 1996-97 M/s. Star Chemicals (Bom) Dy. CIT, Pvt. Ltd., Circle 3(3), 55/56, Jolly Maker Aayakar Bhavan, Vs. Chambers No.2, M.K. Road, Nariman Point, Mumbai - 400020 Mumbai – 400 020 PAN: AAACS7485E (Appellant) (Respondent) Present for: Assessee by : Shri K. Shivaram, Sr. A.R. & Shri Rahul Hakani, A.R. Revenue by : Shri B.K. Bagchi, Sr. A.R. Date of Hearing : 08 . 03 . 2022 Date of Pronouncement : 27 . 05 . 2022 O…

M/S. Star Chemical (Bombay) P. Ltd., Mumbai vs. DCIT CIT - 3(3), Mumbai

ITA 5986/MUM/2006[1995-1996]Status: DisposedITAT Mumbai27 May 2022AY 1995-1996

Bench: Shri Kuldip Singh & Shri Gagan Goyal

For Appellant: Shri K. Shivaram, Sr. A.R. &For Respondent: Shri B.K. Bagchi, Sr. A.R

…IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “E”, MUMBAI BEFORE SHRI KULDIP SINGH, JUDICIAL MEMBER AND SHRI GAGAN GOYAL, ACCOUNTANT MEMBER ITA Nos.5986 & 5987/M/2006 Assessment Years: 1995-96 & 1996-97 M/s. Star Chemicals (Bom) Dy. CIT, Pvt. Ltd., Circle 3(3), 55/56, Jolly Maker Aayakar Bhavan, Vs. Chambers No.2, M.K. Road, Nariman Point, Mumbai - 400020 Mumbai – 400 020 PAN: AAACS7485E (Appellant) (Respondent) Present for: Assessee by : Shri K. Shivaram, Sr. A.R. & Shri Rahul Hakani, A.R. Revenue by : Shri B.K. Bagchi, Sr. A.R. Date of Hearing : 08 . 03 . 2022 Date of Pronouncement : 27 . 05 . 2022 O…

M/S Sobha Interiors (P) Ltd vs. The Deputy Commissioner of Income Tax

In the result, both the appeals stand dismissed

ITA/164/2017HC Karnataka05 Oct 2021

Bench: S.SUJATHA,RAVI V HOSMANI

Section 23Section 260Section 260A

…sioner of Income Tax [Appeals] in both the cases. - 13 - 10. In the case of Azadi Bachao Andolan and Another supra, the Hon'ble Apex Court has held that the judgment of the Hon’ble Madras High Court in M.V.Valliapan V/s. ITO, [(1988) 170 ITR 238] has been rightly concluded. Learned counsel for the appellant, referring to the decision in McDowell and Co. Ltd., V/s. Commercial Tax Officer [(1985) 154 ITR 148], made an endeavor to submit that the agreements entered into between the assessee and its sister concern for fixing the rental value cannot be said to be a sham document or a c…

Aditya Jyot Eye Hospital Pvt. Ltd., Mumbai vs. ITO - 6(1)(1), Mumbai

In the result, all the five appeals of the assessee are allowed

ITA 5083/MUM/2018[2011-12]Status: DisposedITAT Mumbai24 Jun 2019AY 2011-12

Bench: Sri Mahavir Singh

For Appellant: Ms. Chaitee Londhe, ARFor Respondent: Shri Rajat Mittal, DR
Section 143(3)Section 147

…आयकर अपीलीय अधिकरण “SMC” न्यायपीठ म ुंबई में। IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI श्री महावीर स िंह, न्याययक दस्य BEFORE SRI MAHAVIR SINGH, JUDICIAL MEMBER Aayakr ApIla saM./ ITA No. 5083/Mum/2018 (inaQa-arNa baYa- / Assessment Year 2011-12) Aayakr ApIla saM./ ITA No. 5084/Mum/2018 (inaQa-arNa baYa- / Assessment Year 2012-13) Aayakr ApIla saM./ ITA No. 5085/Mum/2018 (inaQa-arNa baYa- / Assessment Year 2013-14) Aayakr ApIla saM./ ITA No. 5086/Mum/2018 (inaQa-arNa baYa- / Assessment Year 2014-15) Aayakr ApIla saM./ ITA No. 5107/Mum/2018 (inaQa-arNa baYa- / Assessment Year 2015-16) Aditya…

The Dy. DIT (Exemption), Circle-1, Ahmedabad vs. Friends of Wwb India, Ahmedabad

In the result, the appeal of the revenue and cross objection of the assesseee both are dismissed

ITA 1608/AHD/2017[2012-13]Status: DisposedITAT Ahmedabad05 Mar 2019AY 2012-13
For Appellant: Shri Sanjay R. Shah, A.RFor Respondent: Shri S.K. Dev, Sr. D.R
Section 11Section 12ASection 143(3)Section 2(15)

…IT(E) vs. Friends of WWB India concerned, the observations of Shah J. in CIT v. Roman [1968] 67 ITR 11 (SC) are very much relevant even today. We may in this connection usefully refer to the judgment of the Madras High Court in M. V. Valliappan v. ITO [1988] 170 ITR 238 , which has rightly concluded that the decision in McDowell [1985] 154 ITR 148 (SC) cannot be read as laying down that every attempt at tax planning is illegitimate and must be ignored, or that every transaction or arrangement which is perfectly permissible under law, which has the effect of reducing the tax burden of the assessee, must be looked…

Aditya Jyot Eye Hospital P.Ltd, Mumbai vs. ITO 6(1)-1, Mumbai

In the result, the appeal filed by the assessee is hereby ordered to be partly allowed

ITA 5325/MUM/2015[2010-11]Status: DisposedITAT Mumbai24 Oct 2018AY 2010-11

Bench: Shri R. C. Sharma, Am & Shri Amarjit Singh, Jm आयकर अपील सं/ I.T.A. No.5325/Mum/2015 (निर्धारण वर्ा / Assessment Year: 2010-11) Aditya Jyot Eye Hospital बिधम/ Ito 6(1)-1 5Th Floor, Aayakar Bhavan, Pvt. Ltd. Vs. 153, Major Parameshwaran Mumbai-400020. Road Wadala (W) Mumbai-400031. स्थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aadca2900R (अपीलाथी /Appellant) .. (प्रत्यथी / Respondent) Revenue By: Shri Chaitanya Anjaria (Dr) Assessee By: Shri Anil Sathe (Ar) सुनवाई की तारीख / Date Of Hearing: 04.09.2018 घोषणा की तारीख /Date Of Pronouncement: 24.10.2018 आदेश / O R D E R Per Amarjit Singh, Jm: The Assessee Has Filed The Present Appeal Against The Order Dated 13.08.2015 Passed By The Commissioner Of Income Tax (Appeals)-12, Mumbai [Hereinafter Referred To As The “Cit(A)”] Relevant To The Ay. 2010-11. 2. The Assessee Has Raised The Following Grounds: - “1. On The Facts & In The Circumstances Of The Case, Ld. Clt (Appeals) Erred In Confirming The Conclusion Of The Assessing Officer That The Flat Purchased For Providing

For Appellant: Shri Anil Sathe (AR)For Respondent: Shri Chaitanya Anjaria (DR)
Section 133(6)Section 143(1)Section 143(2)Section 2(22)(e)Section 40A(3)

…provision of the Income Tax Act. The claim of the assessee is not liable to be declined. In this regard, we also find support of law settled in case titled as Union of India Vs. Azadi Bachao Andolan 263 ITR 706 (SC), Madras High Court in M.V. Vallipan Vs. CIT 170 ITR 238 & Bhoruka Engg. Ltd. Vs. DCIT 356 ITR 25. The assessee company neither transferred the funds outside the company nor to the director, therefore, the provision of Section 2(22)(e) of the Act is not applicable to the facts of the case. Accordingly, we set aside the finding of the CIT(A) in this regard. Since the finding given by lower authorities a…

Madhu Sarda, Mumbai vs. ITO 19(2)(4), Mumbai

In the result, the grounds of appeal raised by the

ITA 7410/MUM/2012[2006-07]Status: DisposedITAT Mumbai09 Mar 2018AY 2006-07

Bench: Shri B. R. Baskaran & Shri Pawan Singhin The Matter Of Mrs. Madhu Sarda , 38,Vikas Center, S.V. Road, Santacruz (West) Mumbai-400054 Pan: Aajps 5135R Appellant/ Assessee Versus Income Tax Officer, -19(4) Mumbai Respondent/ Revenue

For Respondent: Sh. V. Vidhyadhar (Sr.DR)
Section 143(3)Section 253Section 254(1)

…ranted, there is nothing to prevent the assessee from selling the shares in order to reduce the tax liability in respect of the capital gains. The doctrine laid down in MeDowell does not apply to the cases like the present one in M.V. Valliappan v. ITO [1988] 170 ITR 238, the Madras High Court held that a legitimate transaction which does not amount to a dubious device is not hit even by the new approach adopted by the Supreme Court in McDowell & Co. Ltd.’s case (supra). In that case a partial partition effected by the assessee was not recognised on the ground that under section 171(9) of the Act. any partial par…

DCIT Cent. Cir. - 13, Mumbai vs. M/S. Lotus Investments Ltd., Mumbai

In the result, the appeal of the assessee is partly allowed and that of

ITA 3612/MUM/2005[1998-1999]Status: DisposedITAT Mumbai30 May 2017AY 1998-1999

Bench: Shri P K Bansal, Vp & Shri Ravish Sood, Jm

For Appellant: Shri Stany SaldanhaFor Respondent: Shri Shri Pratap Singh (CIT –DR)
Section 250(4)

…lourable devices, have been considered. (a) CIT V. Aspinwall and Co. (Tranvancore Ltd.), 212 ITR 525 (Ken). (b) CIT V. Dhawan Investment and Trading Co. Ltd., 238 ITR 486 (Cal.) (c) Banyan and Berry V. CIT, 222 ITR 831 (Guj.) (d) Valbhappan (M.V.) V. I.T.O., 170 ITR 238 (Mad.) The AR also stated that the McDowell's case has also been explained and distinguished by the Supreme Court in the case of Azadi Bachao Aandolan.-263 ITR 706. It has therefore been contended that considering the totality of the facts and circumstances, the ratio of Supreme Court decision in McDowell's case (154 ITR 148) and other cases cit…

Commr.of Income Tax Delhi I vs. M/S Abhinandan Invest.Ltd

ITA/130/2001HC Delhi19 Nov 2015

Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MR. JUSTICE VIBHU BAKHRU

For Appellant: Mr. Rohit Madan, Senior Standing counsel withFor Respondent: Mr. Ajay Vohra, Senior Advocate with Ms
Section 260A

…the ITA130/2001 Page 13 of 44 circumstances, the transaction of sale of rights in question could not be considered as a paper or a sham transaction. He referred to the decision of the Madras High Court in M.V. Valliappan v, ITO: (1988) 170 ITR 238 (Mad) in support of its contention that the principles enunciated by the Supreme Court in McDowell (supra) were not applicable in the facts of the present case. 11. Mr Vohra argued that the transaction of sale of rights to subscribe to the PCDs had been accepted by the AO as the consideration received by the Assessee was reflected in the…

Union of India v. Azadi Bachao Andolan (170 ITR 238) — Cited in 18 Judgments | BharatTax