Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2023 (2) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (2) TMI 175 - HC - Income TaxCapital gain - consideration received towards sale of shares - transfer of capital asset - Relevant assessment year - transfer governed by Section 108 of Companies Act, 1956 - HELD THAT:- As settled that transfer of shares shall take place only after registration by the Registrars of the Company - Mannalal Khetan v. Kedar Nath Khetan [1976 (11) TMI 135 - SUPREME COURT] and LIC v. Escorts Ltd. [1985 (12) TMI 289 - SUPREME COURT] It is not in dispute that assessees have received Rs.35 Crores as advance sale consideration towards sale of their shares. It is also not in dispute that the Company had written to the KIADB and the KIADB had permitted transfer of shares. The principal argument advanced on behalf of the Revenue is, as back as on July 29, 2009, Shri. G. Somashekar Reddy has executed a Lease Deed in favour of M/s. KPIT Cummins and thus, he was functioning as the owner of the Company. Though this argument is attractive, it is relevant to note that transfer of shares shall happen only in accordance with Section 108 of Companies Act. So far as the lease agreement in favour of KPIT Cummins, we may record that the lessor is the Company namely M/s. Shailendra Techno Park Pvt. Ltd., and Shri. G. Somashekara Reddy is only described as a Director of the said Company. In view of the settled position of law and the factual matrix of the case recorded by the ITAT that Share Certificates were not delivered during the previous year of relevant assessment year, no exception can be taken to the ITAT's view. Revenue appeal fail.
|