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2013 (10) TMI 544 - AT - Income TaxGain on sale of shares - who is liable to be taxed - Joint ownership of shares - taxability - Held that:- There is no doubt that occupancy rights were attached to the shares of the company, the share holders have transferred their shares, the assessee has only received the cost of construction whereas the entire gain from such transfer arose to the share holder who have rightly declared the income of their respective hands and has been rightly taxed by the department in the hands of the share holders. The dual ownership of the property i.e. legally owned by the company and defacto by the members is an accepted position in the Income tax law - A perusal of the assessment order shows that the shareholder has shown long term capital loss on sale of shares at Rs. 1,08,64,687/-. The AO has observed in his assessment order that the asset under transfer is the shares of M/s. Calico Dyeing & Printing Mills Ltd. (present assessee) alongwith the right to occupy and use the immoveable property which are accrue to the buyer on payment of the construction cost to M/s. Calico Printing and Dyeing (present assessee), since the construction was carried out by the said company as stipulated in the agreement. After making minor adjustments to the proportionate value of market shares, the AO has accepted the entire sale transaction in the hands of the shareholder i.e. M/s. Calico Associates. This also proves that the Revenue has collected tax from the hands of the shareholders - Following decision of Westwind Realtors (P) Ltd. Vs DCIT [2006 (3) TMI 559 - ITAT MUMBAI] - Decided against Revenue.
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