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2012 (11) TMI 322 - HC - Income TaxShares transferred for settlement of debt - difference between the fair market value and the cost of shares - Held that:- There was no transfer of shares but only a pledge of shares for the purposes of obtaining a loan. This short term loan of ₹ 50 crores was repaid on 24.12.2004 as is evident from audited accounts and annual reports for the assessment year 2004-05. Further the balance sheet filed for assessment year 2005-06 also shows that an amount of ₹ 50 crores shown under the head other loans as on 31/3/2004 was shown as nil as on 31/3/2005. In case it was not a loan there would have been no occasion to repay the amounts. Also the evidence in the form of transaction statement of Demat Account dated 24/12/2004 was produced at the time of hearing showing the return of 5-crores shares of Reliance Infocomm Limited to the respondent on 24/10/2012 i.e. the date when the loan was returned by the respondent to one Mukesh Ambani - in favour of assessee. Operating lease - Whether lease hold rights are acquired on periodic payments of lease rent received as advance rent - assessee has received IRC fees in one go - Held that:- The agreement dated 30/4/2003 entered into between Reliance Infocomm Ltd. and the respondent assessee concluded that Reliance Infocomm Ltd. in terms of the agreement had only a right to use the net work during the tenure of the 20 year agreement. Further that the agreement was liable to be terminated at the sole discretion of Reliance Infocomm Ltd. and consequently, the amount received as advance for 20 years lease period would have to be returned on such termination for the balance un-utilized period. Thus the respondent assessee had in terms of AS-19 & relying on J.K. Industries ltd. v. CIT [2007 (11) TMI 401 - SUPREME COURT OF INDIA] wherein theory of matching principles and application of accounting standards upheld, correctly spread the entire fee of ₹ 3037 crores over the period of 20 years and to pay tax thereon over the entire period - in favour of assessee.
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