ANARKALI SARABHAI,SHAHIBAG HOUSE, AHMEDABAD vs COMMISSIONER OF INCOME TAX,AHMEDABAD

The Supreme Court addressed the issue of whether the redemption of preference shares by a company constitutes a 'transfer' under Section 2(47) of the Income Tax Act, thereby attracting capital gains tax under Section 45. The Court upheld the High Court's ruling that the amount received by the assessee upon redemption of shares is subject to tax as capital gains, clarifying that the redemption does indeed amount to a transfer. Consequently, the appeal was dismissed, affirming the tax liability of the assessee.