Pramod Kumar, J. - (1.) THIS is an appeal filed by the revenue and is directed against the order dated 19 -3 -1999, passed by the Commissioner (Appeals) for the assessment year 1994 -95.
(2.) BY way of this appeal, the revenue has raised the following grievances: 1. On the facts and in the circumstances of the case and in law, the learned Commissioner (Appeals) has erred in directing the assessing officer to allow the claim of assessee regarding setting off capital loss of Rs. 24,17,049 suffered on sale of 991 shares of Maharana Mills Ltd., against the long -term capital gains of Rs. 11,54,464 earned on sale of shares of Saurashtra Cement and Chemical Industries Ltd. particularly because the sale of shares of Maharana Mills Ltd., which company was under liquidation was made to a family concern of the assessee thereby being devoid of any genuine commercial consideration. 2. On the facts and in the circumstances of the case, the learned Commissioner (Appeals) erred in facts and in law in not taking cognisance of findings of the fact by the assessing officer at para 3 of the assessment order that M/s Sameta Exports (P) Ltd., a closely held company, was fully controlled by the assessee and therefore the shares of Maharana Mills Ltd., a company in liquidation, all the more was not eligible for transfer of shares as the transaction was devoid of any commercial content and Mahendra N. Mehta was having the only object of cutting down the tax liability accruing from long -term capital gain. In substance, thus, solitary grievance of the revenue is that, since the transaction of sale of 911 shares in Maharana Mills Ltd., was devoid of any genuine commercial motive, and was entered into solely to reduce the tax liability, the Commissioner (Appeals) ought to have held that the loss incurred in this contrived transaction was not eligible for set off against the long -term capital gains accruing to the assessee in other genuine transaction(s).
(3.) IN order to properly adjudicate on the controversy requiring our adjudication, it is necessary to take a careful look at factual matrix of this case and at the applicable legal position. Briefly, the material facts bereft of unnecessary details. The assessee is an individual, and the main sources of his income consist of income from salary, dividends, director's fees and director's commission etc. During the relevant previous year, the assessee also earned long -term capital gains of Rs. 11,54,464 on sale of 22,820 shares of Saurashtra Cement and Chemical Industries Ltd. The assessee, however, claimed that the assessee has also incurred a loss of 24,17,049 on sale of shares in Maharana Mills Ltd. (MML, hereinafter referred to as), which is in the nature of long -term capital loss, and is required to be set off against long term capital gains of Rs. 11,54,464. It is this claim for set off which has given rise to this litigation before us.;