TMI Blog2014 (6) TMI 293X X X X Extracts X X X X X X X X Extracts X X X X ..... ration of sale of shares – Held that:- Tribunal was of the view that in the absence of anything to show that the assessee has received anything more than what is disclosed in respect of the shares sold to its related concerns, no addition can be made to such value for the purpose of computing capital gains – Following CIT Versus George Henderson & Co. Ltd. [1967 (4) TMI 18 - SUPREME Court] - when the legislature wanted to make a departure a specific provision was introduced - Reference in this regard can be made to Section 50C - the AO was wrong in taking the view that the capital gain has to be assessed not on the basis of the consideration actually received but on the basis of the consideration receivable based on market rate – Decided against Revenue. - ITAT No. 193 of 2013, GA No.3485 of 2013 - - - Dated:- 6-3-2014 - Girish Chandra Gupta And Sudip Ahluwalia,JJ . For the Petitioner : Ms. Mamata Bharghav For the Respondents : Mr. J. P. Khaitan, Mr. S. Das And Mr. C. S. Das ORDER The court :- The appeal is directed against the judgment and order dated 20.5.2013 by which the learned Income Tax Appellate Tribunal allowed the appeal of the assessee. Aggrieved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computing the income of the assessee. Moreover, this is merely a wrong statement of the loan account on the balance-sheet but as per the accounting standard being followed by the assessee company. Since the same is contingent in nature, the same is disallowed and added back in the total income of the assessee. The total disallowance on this account comes to Rs.53,43,048. Aggrieved by the order of the assessing officer the assessee approached the CIT Appeal. The CIT Appeal did not examine the findings of the assessing officer on merits. He on the contrary upheld the views of the assessing officer on the ground that increase or decrease in the value of loans on account of foreign exchange would result in capital appreciation or depreciation of the value of an asset, and can not be treated an income or an expenditure. He added that in the present case the assessee is not in the business of money lending. Therefore, decrease in the value of loans advanced by it cannot be treated as revenue loss. Aggrieved by the order of the CIT the assessee preferred an appeal before the Learned Tribunal which reversed the order of the CIT based on the following reasons ;- 9. We have consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... money lent as its business profit. The case of the assessee is that the money was advanced to a sister concern which has in fact been supplying 97% of its raw material. It was as such an advance made for the purpose of running the business more profitably. This finding of the learned Tribunal was not challenged. The distinction sought to be made by the CIT as also by the learned Counsel before us that the judgment in the case of Woodward Governor India (P) Ltd. would be applicable to liabilities but not to assets has not impressed us. Closing stock is also an asset. Can it be said that the closing stock cannot be valued at the rate prevailing on the closing day of the year in case the rate is less than the cost price ? For the aforesaid reasons we find no merit in the submissions made by Ms. Bhargav. The first two questions are thus disposed of by answering them in the affirmative. The third question relates to profit arising out of sale of the shares. The Assessing Officer while making additions made the following findings;- On going through the complete details of these transactions it is found that the shares of M/s.Fast Project Ltd. was sold to the unrelated parties at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w that the assessee has received anything more than what is disclosed in respect of the shares sold to its related concerns, no addition can be made to such value for the purpose of computing capital gains. In these circumstances, respectfully following the decisions of the Hon ble Supreme Court in the case of K.P.Varghese referred to supra as also the case of George Henderson Co. Ltd. referred to supra and Gillanders Arbuthnot Co. referred to supra, the finding of ld. CIT (Appeals) on this issue stands confirmed. The views taken by the learned Tribunal are backed by the judgments of the Supreme Court. We, however, need to say a few words to affirm the views of the Tribunal. In the case of CIT Versus George Henderson Co. Ltd. reported in 66 ITR 622. Their Lordships held as follows :- But it was contended on behalf of the appellants that the expression full value of the consideration for which the sale, exchange or transfer of the capital asset is made appearing in section 12B(2) meant the market value of the asset transferred and on this ground the Appellate Tribunal was justified in taking the market value of the shares to be the full value of the consideration. We ..... X X X X Extracts X X X X X X X X Extracts X X X X
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