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2023 (8) TMI 145 - ITAT DELHICapital gain computation - disallowance of expenses claimed u/s 48(1) - HELD THAT:- When the assessee has furnished supporting documentary evidences to establish on record that it had incurred expenditure in connection with transfer of shares, such claim of the assessee cannot be rejected/disallowed on conjectures and surmises. FAA has examined the issue with proper application of mind and having found that a part of the expenditure was actually incurred by the assessee for facilitating the transfer of shares, has allowed the expenditure. No contrary evidence has been brought on record by the Revenue for enabling us to disturb the factual finding of learned first appellate authority. Decided against revenue. Income from other sources or LTCG - as per the Escrow Agreement at the time of sale of shares the value per share was shown less as compared value in the computation of capital gain the assessee has shown total sale consideration of shares - HELD THAT:- As extra payment made to the assessee does not find place in the Escrow Agreement is due to the fact that in addition to the assessee, there are other share holders, who are party to the Escrow Agreement. Therefore, the excess payment made to the assessee could not have formed part of the Escrow Agreement. However, undeniably, the assessee was holding the controlling block of shares of EKPL When documentary evidences indicate that both the vendor and the vendee, i.e., the assessee and DLF Ltd. have treated the payment of Rs. 7.20 crores as control premium on sale of shares, there is no occasion for the Assessing Officer to rewrite the terms of agreement between the parties unilaterally. Moreover, the Assessing Officer has observed that the amount of Rs. 7.20 crores was paid to the assessee for some other purpose. The aforesaid observation of the Assessing Officer clearly indicates that he himself was not sure for what purpose the payment was made. Thus, when the Assessing Officer had no other material in his possession to disprove the claim of the assessee that the amount was received towards sale consideration of shares, he could not have disallowed the claim - Decided against revenue. Accepting the Fair Market Value (FMV) of the shares as declared by the assessee - CIT accepted FMV of the shares as on 01.04.1981 as claimed by the assessee. - HELD THAT:- It is well known that valuation is a highly technical subject, hence, has to be dealt by the experts. Therefore, when the Departmental Valuation Cell is available, the Assessing Officer, instead of referring the valuation process to the Valuation Cell, should not have taken the burden of valuation himself. Assessing Officer has observed that the nature and character of land is dairy farming land, however, the facts on record reveal that EKPL has applied for conversion of dairy farming use to residential use in the year 1970, which was eventually allowed in the year 1992. Therefore, the FMV of the lease hold rights has to be ascertained based on its character of residential use. It is further observed, though, the Assessing Officer has alleged that the Accurate Surveyors in their valuation report has not considered the value of land in same locality, however, the observation is factually incorrect. We may also observe, merely because the assessee purchased shares of EKPL over a period of 20 years at the same face value of Rs. 10 per share, it cannot be said that the FMV of the shares as on 1st April, 1981 would be Rs. 10 per share. This is so because, the actual cost of acquisition cannot be the FMV as provided under section 55(2)(b) of the Act. Decided against revenue.
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