INCOME TAX OFFICER Vs. ARVIND NAROTTAM

JUDGEMENT

(1.) AT the time of admission of the appeal, the following substantial question of law has been formulated by this Court:

(2.) ON 9th August 2000, this Court admitted this appeal and directed it to be heard with I. T. R. No. 38 of 1998. Similar question was referred for the opinion of this Court and this Court [coram: Y. R. Meena, Acting CJ. and A. S. Dave, J. ] by order dated 28. 11. 2006 has answered the question in affirmative, i. e. in favour of the assessee and against the Revenue. This appeal, therefore, must also meet with the same fate.

(3.) IN the instant case, the Income Tax Officer has disallowed a short term capital loss of Rs. 80,000/- on the ground that the assessee has purchased 1600 shares of a closely held Company at their face value of Rs. 100/- each and sold it within a short span to a Family Trust at Rs. 50/- per share. In appeal, the Commissioner of Income Tax, [appeals] ? I, Ahmedabad by order dated 27. 07. 93 directed the Assessing Officer to allow the claim of the appellant for capital loss of Rs. 80,000/ -. The Revenue carried the matter before the Income Tax Appellate Tribunal, Ahmedabad Bench. The Tribunal, following its own order dated 08. 10. 96 in the case of Shri Shrenik Kasturbhai [huf] in ITA No. 5524/ahd/1991 wherein similar type of capital loss claimed was directed to be allowed, dismissed the appeal filed by the Revenue. Being aggrieved, the Revenue has preferred the present appeal wherein this Court framed the aforesaid question.