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“colourable device”

Judicial DoctrinesMcDowellMcDowell721 judgments

The decision most relied on for colourable device is Sumati Dayal v. CIT (214 ITR 801), cited in 1,967 judgments on BharatTax.

Leading authorities on colourable device

Sumati Dayal v. CIT
214 ITR 801 · 1995 · Supreme Court
1,967
citing judgments

The Revenue is entitled to look behind the apparent form of a transaction to discover its true nature, applying the test of human probabilities and surrounding circumstances. If transactions defy logic or are unnatural, they can be treated as bogus, even if supported by some documentation, especially in cases of cash credits or unexplained investments.

McDowell & Co. Ltd. v. CTO
154 ITR 148 · 1985 · Supreme Court
741
citing judgments

The Supreme Court held that while legitimate tax planning is permissible, transactions structured as a "colourable device" or "subterfuge" solely to avoid tax are impermissible. It mandates a judicial shift to look beyond the form to the substance of a transaction, allowing the lifting of the corporate veil in tax evasion arrangements.

Union of India v. Azadi Bachao Andolan
263 ITR 706 · 2003 · Supreme Court
691
citing judgments

A citizen is free to carry on business within the law, and mere tax planning without a motive to evade taxes through colorable devices is not frowned upon. The liability to taxation, for the purpose of tax treaty application, is a legal situation, not the fiscal fact of actual payment.

Sanjay Bimalchand Jain v. PCIT-1, Nagpur
89 Taxmann.com 196 · 2018 · High Court
251
citing judgments

The exemption for long-term capital gains on share transactions is unavailable if the assessee fails to discharge the onus of proving the genuineness of gains arising from dubious share transactions designed to convert unaccounted income into tax-exempt capital gains. Courts will uphold an assessment based on the Revenue's evidence of price rigging or penny stock manipulation if the assessee cannot provide cogent evidence for the abnormal rise in share value.

CIT v. Jamnadevi Agarwal
328 ITR 656 · 2010 · High Court
230
citing judgments

When faced with allegations of bogus long-term capital gains from penny stocks, the Assessing Officer must discharge the onus of proving that the assessee's transactions were not genuine. The assessee can rely on the principle of preponderance of probability, and the Revenue must present substantial evidence to establish that the transactions were a colourable device or that the assessee was an entry operator.

Vodafone International Holdings BV v. Union of India
6 SCC 613 · 2012 · Supreme Court
216
citing judgments

Tax planning is legitimate only if it is within the framework of law. Colourable devices cannot be part of tax planning, and it is wrong to encourage avoiding tax through dubious methods.

CIT v. George Williamson (Assam) Ltd.
284 ITR 619 · 2006 · High Court
111
citing judgments

An assessee may manage tax affairs to attract lower tax as permitted by law, and a genuine sale and leaseback transaction that provides substantial benefit is not a colourable device for tax avoidance.

CIT v. Smt. Jasvinder Kaur
357 ITR 638 · 2013 · Reported
91
citing judgments

The benefit of Section 10(38) for long-term capital gains is not available when transactions in penny stocks are found to be part of a scheme involving price manipulation or accommodation entries, indicating the gains are not genuine and lack actual investment.

Judgments citing colourable device

Om Prakash Gupta, Delhi vs. ACIT, Circle- 64(1), New Delhi

In the result, the appeal of the assessee is dismissed

ITA 3061/DEL/2019[2014-15]Status: DisposedITAT Delhi20 Jun 2024AY 2014-15

Bench: Dr. B.R.R. Kumar & Sh. Sudhir Kumarassessment Year: 2014-15 Om Prakash Gupta Vs. Acit 25, Surya Niketan, Circle – 64 (1) Delhi-110092 New Delhi Pan No.Aiopg4255H (Appellant) (Respondent) Appellant By Sh. Rakesh Sehgal, Ca Respondent By Sh. Anshul, Sr. Dr Date Of Hearing: 21/05/2024 Date Of Pronouncement: 20/06/2024 Order Per Sudhir Kumar, Jm:

Section 10(38)Section 143(3)

this case wherein it has been held that tax planning may be legitimate provided it is within the framework of the law and any colourable devices cannot be part of tax planning and it is wrong to encourage or entertain the belief that it is honourable to avoid the payment

Sri Sujit Singhania, Kolkata vs. ITO, Ward-49(4), Kolkata.

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 935/KOL/2023[2014-15]Status: DisposedITAT Kolkata19 Jun 2024AY 2014-15

Bench: Dr. Manish Borad & Shri Sonjoy Sarma]

Section 10(38)Section 131Section 142(2)Section 142(3)Section 143(1)Section 143(2)Section 250

that transaction of Smart Champs IT & Infra Ltd. (Cressanda Solutions Ltd.) was a bogus or sham transaction which is nothing but used as a colourable device to defraud the revenue with the clear and planned intention to evade tax which was not accepted as genuine transaction. However, the entire LTCG

Deepa Pamnani, Mumbai vs. ITO Ward 20(1)(4), Mumbai

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

ITA 4309/MUM/2023[2015-16]Status: DisposedITAT Mumbai18 Jun 2024AY 2015-16

Bench: Shri Prashant Maharishi, Am & Shri Sunil Kumar Singh, Jm Ms. Deepa Pamnani Vs. The Income Tax Officer Pamnanai Hospital & Ward 20(1)(1) Research Center Piramal Chamber 33 Cf +6Qc , Railway Station Lal Baug Road, Prem Colony, Mandasur Mumbai 400012 Madhya Pradesh 458001 Pan Cstpp4472L (Appellant) (Respondent) Pan No. Akepg6370P Appellant By : Shri Bhupendra Shah Ca & Mr. Kapil Jain Ca Revenue By : Smt. Mahita Nair, Dr Date Of Hearing: 30.05.2024 Date Of Pronouncement : 18.06.2024 O R D E R Per Prashant Maharishi, Am:

For Appellant: Shri Bhupendra Shah CA and Mr. Kapil Jain CAFor Respondent: Smt. Mahita Nair, DR
Section 143Section 54FSection 68

right in property owned by husband of the assessee for claim of exemption under section 54F of the act are sham transaction and a colourable device to avoid tax payment involving the son of the assessee, the assessee, the husband of the assessee, the buyer of the shares

Veenita Enterprise Pvt. Ltd., Ahmedabad vs. The Dy.Commissioner of Income Tax, Central Circle-1(1), Ahmedabad

In the result, the appeal filed by the assessee is dismissed

ITA 1199/AHD/2016[2009-10]Status: DisposedITAT Ahmedabad14 Jun 2024AY 2009-10

Bench: Smt. Annapurna Gupta (Accountant Member), Shri Siddhartha Nautiyal (Judicial Member)

Section 132(4)Section 143(3)Section 147Section 148Section 68

system whereby unaccounted money belonging to the directors/assessee company has been introduced as share application money in the hands of the assessee company through colourable devices. The assessee, in the instant facts has failed to prove the genuineness of the I.T.A No. 1199/Ahd/2016 A.Y. 2009-10 Page No 16 Veenita

ITO, Ward-9(1), New Delhi vs. Falcon Realty Services P.Ltd, New Delhi

The appeal of the revenue is dismissed

ITA 7289/DEL/2019[2012-13]Status: DisposedITAT Delhi13 Jun 2024AY 2012-13

Bench: Shri Gs Pannu & Shri Anubhav Sharma

For Appellant: NoneFor Respondent: Shri Vivek Kumar Upadhyay, Sr.DR
Section 143(3)

rent paid? 8. The Ld. CIT(A) has erred in not appreciating the facts that the assessee has evaded the taxes by resorting to colourable device as is evident from the facts of the case and the transactions carried by it. 9. The appellant craves leave to add, alter

Shivanna HUF, Bengaluru vs. Assisstant Commissioner of Income Tax, Circle-7(2)(1), Bengaluru

In the result, the appeal filed by the assessee stands allowed for statistical purposes

ITA 847/BANG/2024[2017-18]Status: DisposedITAT Bangalore12 Jun 2024AY 2017-18

Bench: Smt Beena Pillai & Shri Laxmi Prasad Sahuassessment Year : 2017-18

For Appellant: Shri Shreehari Kutsa, AdvocateFor Respondent: Shri Subramanian .S, JCIT – DR
Section 250Section 69

Appeals) erred in law by not accepting the additional evidences produced under Rule 46A by holding that the evidences produced Page 3 are colourable device and against the human preponderance and consequently passed a perverse order in the facts and circumstances of the case. 9. The learned Commissioner of Income

DCIT, Chennai vs. Tvs Investments Lrd., Chennai

In the result, the Revenue's appeal as well as the assessee's Cross Objection are allowed for statistical purposes

ITA 262/CHNY/2017[2010-11]Status: DisposedITAT Chennai11 Jun 2024AY 2010-11

Bench: Hon’Ble Shri Aby T. Varkey, Jm & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकरअपील सं./ Ita No.262/Chny/2017 (िनधा*रण वष* / Assessment Year: 2010-11) Dcit M/S. Tvs Capital Funds (P) Limited (Formerly Known As Tvs Investments Limited) Corporate Circle-3(1) बनाम/ Jayalakshmi Estates, Chennai-600 034. Vs. No.29, (Old No.8), Haddows Road Chennai-600 006. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaact-1154-H (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Dr. D. Praveen (Jcit) -Ld. Dr " थ"कीओरसे/Respondent By : Shri R. Vijayaraghavan, (Advocate)-Ld. Ar सुनवाईकीतारीख/Date Of Hearing : 15-05-2024 घोषणाकीतारीख /Date Of Pronouncement : 11-06-2024 आदेश / O R D E R

For Appellant: Dr. D. Praveen (JCIT) -Ld. DRFor Respondent: Shri R. Vijayaraghavan, (Advocate)-Ld. AR

sale of land owned by the assessee. According to the AO, the sale of shares at one paise per share was a colourable device to set off the capital gains. The AO fixed the sale price at Rs. 31.19per share and worked out the long term capital gains ... certain passages from Mc Dowell v CIT 154 [TR 148 (SC) to allege that the transaction by the assessee company, TVSM is a colourable device. There is no dispute that the AO can ignore a colourable device where the intention is to evade tax by resorting to dubious arrangements

Arcil Retail Loan Portfolio 001 J Trust, Mumbai vs. The Income Tax Officer-Circle 21(1)(2), Mumbai

In the result, appeals by the Revenue, being ITA No

ITA 4199/MUM/2023[2016-17]Status: DisposedITAT Mumbai07 Jun 2024AY 2016-17

Bench: Shri Narendra Kumar Billaiya & Shri Sandeep Singh Karhail

For Appellant: Shri Jeet KamdarFor Respondent: Shri Ajay Chandra
Section 143(3)Section 250Section 3Section 7

with the mechanism of the SARFAES Act,2002 and under guidance of RBI whereas it is clear that it is a smoke screen and colourable device to evade taxes.” 7. While, grounds raised by the assessee in its appeal being ITA No.4199/Mum./2023 are reproduced as under: - “1. The learned

Income Tax Officer Ward-22(1)(6), Mumbai vs. Arcil Asset Reconstruction Fund II Trust, Mumbai

In the result, appeals by the Revenue, being ITA No

ITA 3050/MUM/2023[2016-17]Status: DisposedITAT Mumbai07 Jun 2024AY 2016-17

Bench: Shri Narendra Kumar Billaiya & Shri Sandeep Singh Karhail

For Appellant: Shri Jeet KamdarFor Respondent: Shri Ajay Chandra
Section 143(3)Section 250Section 3Section 7

with the mechanism of the SARFAES Act,2002 and under guidance of RBI whereas it is clear that it is a smoke screen and colourable device to evade taxes.” 7. While, grounds raised by the assessee in its appeal being ITA No.4199/Mum./2023 are reproduced as under: - “1. The learned

Income Tax Officer Ward 22(1)(6), Mumbai vs. Arcil Shalimar Wires Industries Limited II Trust, Mumbai

ITA 2909/MUM/2023[2016-17]Status: DisposedITAT Mumbai07 Jun 2024AY 2016-17

Bench: Shri Narendra Kumar Billaiya & Shri Sandeep Singh Karhail

For Appellant: Shri Jeet KamdarFor Respondent: Shri Ajay Chandra
Section 143(3)Section 250Section 3Section 7

with the mechanism of the SARFAES Act,2002 and under guidance of RBI whereas it is clear that it is a smoke screen and colourable device to evade taxes." 7. While, grounds raised by the assessee in its appeal being ITA No.4199/Mum./2023 are reproduced as under: “1. The learned

Hinima Atul Shah, Ahmedabad vs. The ITO, Ward-3(3)(2), Ahmedabad

In the result, appeal of the assessee is allowed

ITA 933/AHD/2023[2017-18]Status: DisposedITAT Ahmedabad04 Jun 2024AY 2017-18

Bench: Ms. Suchitra Kambleassessment Year: 2017-18

Section 115BSection 142(1)Section 143(1)Section 143(2)Section 234ASection 68

sales shown by the assessee during the period of 10 days just before the demonetisation is not genuine but fabricated and after thought being colourable device used to show unaccounted cash as accounted one. Thus, the Assessing Officer held that the cash deposit of Rs.35,19,500/- during the demonetisation

Agrasen Primses Private Limited, Jaipur vs. ITO Ward 5(1), Jaipur

ITA 125/JPR/2023[2014-15]Status: DisposedITAT Jaipur30 May 2024AY 2014-15
For Appellant: Ms. Parba Rana (Adv.)&For Respondent: Shri A.S. Nehra (CIT)
Section 133ASection 142(1)Section 143(2)Section 143(3)

what is apparent in this case is not real, that these financial transactions were sham ones and that this entire edifice was only a colourable device used to evade tax. 7) The Ld. AO without bringing any evidence hold with imagination that the assessee sold the shares when the prices

Income Tax Officer-10(2)(3), Aayakar Bhavan, Churchgate vs. Abdul Rahim Suleman Ghaswala, Jogeshwari

In the result, the appeals are dismissed

ITA 642/MUM/2024[2013-14]Status: DisposedITAT Mumbai29 May 2024AY 2013-14

Bench: Shri Narendra Kumar Billaiya, Hon'Ble & Shri Sandeep Singh Karhail, Hon'Bleincome Tax Officer-10(2)(3) V. Abdul Rahim Suleman Ghaswala 142/48, Ghaswala Estate Room No-212, Aayakar Bhavan S.V. Road, Jogeshwari(W) M.K. Road, Mumbai-400020 Mumbai – 400102 Pan: Aalpg9087A (Appellant) (Respondent) Assessee Represented By Shri S.M. Makhija & : Ms. Manisha Ghind Department Represented By : Shri Ajay Chandra

Section 148Section 45Section 45(3)Section 48

bank finance obtained by the firm to the tune of Rs. 250 crores. Thus, it was submitted that the revaluation was not the colourable device. Other factual details with regard to the loan availed by the firm were also placed for consideration. 15. The CIT(A) accepted the contention raised ... banks to extent of nearly Rs. 250 crores. Therefore, on facts Abdul Rahim Suleman Ghaswala the tribunal concluded that the revaluation was not a colourable device. 18. Further more on facts it was held that there was no withdrawal by the partners from capital accounts and therefore there cannot

Owens Corning, Mumbai vs. The Deputy Commissione of Income Tax _(International Taxation)-Circle-3(2)(2), Mumbai

In the result, the appeal of the assessee is allowed

ITA 4627/MUM/2023[2021-22]Status: DisposedITAT Mumbai27 May 2024AY 2021-22

Bench: Smt Kavitha Rajagopal, Jm & Ms Padmavathy S, Am

For Appellant: Shri Sandeep Bhalla a/w MsFor Respondent: 21.05.2024
Section 9(1)(vi)

that assessee himself has offered the income as "Royalty" in AY 2007-08 and that the entire arrangement of the lease transaction is a colourable device done by the assessee to avoid tax. Accordingly the AO proceeded to make an addition of Rs. 28,49,43,136/- treating the entire

DCIT 19 3, Mumbai vs. Sanjiv Mahendra Parikh, Mumbai

ITA 3515/MUM/2023[2012-13]Status: DisposedITAT Mumbai24 May 2024AY 2012-13

Bench: SHRI NARENDRA KUMAR BILLAIYA, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY (Judicial Member)

For Appellant: Shri Vijay MehtaFor Respondent: Shri Veerbhandra Mahajan
Section 142(1)Section 143(3)Section 147Section 148

suffers from perversity as it ignores the facts brought on record establishing that assessee made CCM transactions as part of colourable device to generate fictitious Loss with the aim to evade taxes due. 8. On the facts and circumstances of the case and in law the order

Primetals Technologies India Pvt. Ltd., Kolkata vs. ACIT, Circle - 1(1), Kolkata

In the result, appeals of the assessee for Assessment Year 2017-18

ITA 372/KOL/2022[2018-2019]Status: DisposedITAT Kolkata16 May 2024AY 2018-2019

Bench: Dr. Manish Borad, Hon’Ble & Shri Sonjoy Sarma, Hon’Blei.T.A. No. 371 & 372/Kol/2022 Assessment Year: 2017-18 & 2018-19 Primetals Technologies India Pvt. Ltd. Acit, Circle-1(1), Kolkata 5Th Floor, Tower-C Vs Dlf, It Park-I 08 Majore Arterial Road New Town Kolkata - 700156 [Pan : Aaecv9657M] अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : Shri Ajoy Vora, Sr. Advocate & Pooja Saraf, Ar Revenue By : Shri Rakesh Kumar Das, Cit, D/R सुनवाई क" तारीख/Date Of Hearing : 21/02/2024 घोषणा क" तारीख /Date Of Pronouncement: 16/05/2024 आदेश/O R D E R Per Dr. Manish Borad: The Present Appeals Are Directed At The Instance Of The Assessee Against The Final Assessment Orders Framed U/S 143(3) R.W.S. 144C & 144C(5) Of The Income Tax Act, 1961 (Hereinafter ‘The Act’) By The Deputy Commissioner Of Income Tax, Circle – 1(1), Kolkata (Hereinafter The “Ld. Ao”) Even Dt. 29/04/2022, Passed In Pursuance Of The Directions Of The Ld. Dispute Resolution Panel -2, New Delhi, Dt. 18/02/2022 For Assessment Year 2017-18 & Dt. 04/03/2022 For Assessment Year 2018-19, Passed U/S 144C(5) Of The Act. 2. The Assessee Has Raised The Following Grounds Of Appeal For Assessment Year 2017-18:- “Ground 1:

For Appellant: Shri Ajoy Vora, Sr. Advocate and Pooja Saraf, ARFor Respondent: Shri Rakesh Kumar Das, CIT, D/R
Section 143(3)Section 144CSection 144C(5)Section 156Section 32(1)Section 92C

rightly classified as goodwill. The High Court further noted that since the Tribunal had rejected the view that the slump sale agreement was a colourable device, the agreement between the parties ought to be accepted in its totality and further, since the agreement itself did not provide for splitting ... classified as goodwill. 20. In the facts of the present case, the ITAT has rejected the view that the slump sale agreement was a colourable device. Once having held so, the agreement between the parties must be accepted in its totality. The Agreement itself does not provide for splitting

Primetals Technologies India Private Limited, Kolkata vs. ACIT, Circle-1(1), Kolkata

In the result, appeals of the assessee for Assessment Year 2017-18

ITA 371/KOL/2022[2017-2018]Status: DisposedITAT Kolkata16 May 2024AY 2017-2018

Bench: Dr. Manish Borad, Hon’Ble & Shri Sonjoy Sarma, Hon’Blei.T.A. No. 371 & 372/Kol/2022 Assessment Year: 2017-18 & 2018-19 Primetals Technologies India Pvt. Ltd. Acit, Circle-1(1), Kolkata 5Th Floor, Tower-C Vs Dlf, It Park-I 08 Majore Arterial Road New Town Kolkata - 700156 [Pan : Aaecv9657M] अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : Shri Ajoy Vora, Sr. Advocate & Pooja Saraf, Ar Revenue By : Shri Rakesh Kumar Das, Cit, D/R सुनवाई क" तारीख/Date Of Hearing : 21/02/2024 घोषणा क" तारीख /Date Of Pronouncement: 16/05/2024 आदेश/O R D E R Per Dr. Manish Borad: The Present Appeals Are Directed At The Instance Of The Assessee Against The Final Assessment Orders Framed U/S 143(3) R.W.S. 144C & 144C(5) Of The Income Tax Act, 1961 (Hereinafter ‘The Act’) By The Deputy Commissioner Of Income Tax, Circle – 1(1), Kolkata (Hereinafter The “Ld. Ao”) Even Dt. 29/04/2022, Passed In Pursuance Of The Directions Of The Ld. Dispute Resolution Panel -2, New Delhi, Dt. 18/02/2022 For Assessment Year 2017-18 & Dt. 04/03/2022 For Assessment Year 2018-19, Passed U/S 144C(5) Of The Act. 2. The Assessee Has Raised The Following Grounds Of Appeal For Assessment Year 2017-18:- “Ground 1:

For Appellant: Shri Ajoy Vora, Sr. Advocate and Pooja Saraf, ARFor Respondent: Shri Rakesh Kumar Das, CIT, D/R
Section 143(3)Section 144CSection 144C(5)Section 156Section 32(1)Section 92C

rightly classified as goodwill. The High Court further noted that since the Tribunal had rejected the view that the slump sale agreement was a colourable device, the agreement between the parties ought to be accepted in its totality and further, since the agreement itself did not provide for splitting ... classified as goodwill. 20. In the facts of the present case, the ITAT has rejected the view that the slump sale agreement was a colourable device. Once having held so, the agreement between the parties must be accepted in its totality. The Agreement itself does not provide for splitting

Sachin Kanodia, New Delhi vs. ITO Ward - 42(2), New Delhi

Appeal are dismissed

ITA 9504/DEL/2019[2015-16]Status: DisposedITAT Delhi10 May 2024AY 2015-16

Bench: SHRI S. RIFAUR RAHMAN (Accountant Member), SHRI YOGESH KUMAR U.S. (Judicial Member)

Section 142(2)Section 143(2)Section 2Section 68Section 69C

observation of the Hon'ble Supreme Court is reproduced hereunder: "Tax planning may be legitimate provided it is within the framework of law. Colourable devices cannot be part of tax planning and it is wrong to encourage or entertain the belief that it is honorable to avoid the payment ... this case wherein it has been held that tax planning may be legitimate provided it is within the framework of the law and any colourable devices cannot be part of tax planning and it is wrong to encourage or entertain the belief that it is honourable to avoid the payment

Neo Structo Construction Pvt. Ltd., Ahmedabad vs. The ACIT, Circle-1(1)(1), Surat Now the ACIT, Circle-3(1)(1), Ahmedabad

In the result the appeal of the assessee is hereby allowed

ITA 351/AHD/2023[2012-13]Status: DisposedITAT Ahmedabad07 May 2024AY 2012-13

Bench: Shri Waseem Ahmed & Ms. Madhumita Royआयकरअपीलसं./ Ita No. 351/Ahd/2023 धििाधरणवरध/Asstt. Year: 2012-2013 Neo Structo Construction Pvt. Ltd., The Acit, 101-104, Gcp Business Centre, Vs. Circle-1(1)(1), Opp. Memnagar Fire Station, Surat. Vijay Cross Road, Now Ahmedabad. The Acit, Circle-3(1)(1), Ahmedabad. Pan: Aaacn7717N & आयकरअपीलसं./ Ita No. 496/Ahd/2023 धििाधरणवरध/Asstt. Year: 2012-2013 The D.C.I.T, Neo Structo Construction Pvt. Ltd., Circle-3(1)(1), Vs. 101-104, Gcp Business Centre, Ahmedabad. Opp. Memnagar Fire Station, Vijay Cross Road, Ahmedabad.

For Appellant: Shri Dhinal Shah, ARFor Respondent: Shri Sudhendu Das, CIT. DR
Section 143(3)

landowners against which the assessee has issued shares at premium. Thus, the AO treated the transaction shown by the assessee as the colourable device. The AO also observed that the assessee has not proved the identity, creditworthiness of the parties and the genuineness of the transactions. Furthermore, the notices issued

Income Tax Officer, Mumbai vs. Svadeshi Enterprise(Hubli), Mumbai

In the result, appeal filed by the revenue is dismissed

ITA 2785/MUM/2023[2014-15]Status: HeardITAT Mumbai03 May 2024AY 2014-15

Bench: Shri Narendra Kumar Billaiya, Hon'Ble & Shri Rahul Chaudhary, Hon'Bleincome Tax Officer V. Svadeshi Enterprise(Hubli) R.N. 234, 2Nd Floor 12/A Yusuf Building Kautilya Bhawan, Bkc Veer Nariman Road, Fort Mumbai, Maharashtra- 400051 Mumbai-400023 Pan: Aapfs0181B (Appellant) (Respondent) Assessee Represented By : Shri Vijay Mehta Shri Veerbhandra Mahajan Department Represented By :

Section 143(1)Section 143(3)Section 147Section 148

that, project is completed and is in sale condition only proves that, the claim of compensation payment is not genuine and is merely a colourable device to reduce the taxable income. 4. There is difference between tax planning and colourable devices. Tax planning may be legitimate provided it is within ... framework of law. Colourable devices cannot be part of tax planning and it is wrong to accept such methods as same are tools to reduce the genuine tax liabilities. Accordingly, assessee claimed deduction of compensation payment of Rs 4.61 crores which is completely unjustifiable considering the ground facts