Incorporation of Investing Companies under Companies Act not sufficient to prove genuineness of...

The Calcutta High Court has set aside an ITAT finding, ruling that "mere incorporation of investing companies under the Companies Act is not sufficient to prove the genuineness of share transactions." The court's decision reinforces the tax authorities' power to look beyond mere corporate formalities to uncover sham transactions. The ruling serves as a warning against using legal loopholes to evade taxes, emphasizing that tax authorities can go beyond procedural compliance.