TMI Blog2011 (6) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act and there is no doubt that the amount received on the sale of the MOU was clearly taxable as per specific provision of the Act - The said expression in section 55(2)(a) of the Act was inserted by the Finance Act, 1997 with effect from 1-4-1998 and hence the contention of the assessee that the amendment to section 55(2)(a) bringing the transfer of commercial right to capital gain tax is effective from the assessment year 2003-04 and 2002-03, is not correct - Do not find any infirmity in the order of the CIT (A) in upholding the order of the Assessing Officer - Decided against the assessee. - IT APPEAL NO. 1331 (HYD.) OF 2010 - - - Dated:- 24-6-2011 - G.C. GUPTA, AKBER BASHA, JJ. A.V. Raghuram for the Appellant. Venkat Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and thereby erred in holding that such a transfer attracts capital gains". 6. Briefly stated facts of this issue are that the assessee company engaged in the business of consultancy for business management and financial management, filed its return of income for the assessment year 2002-03 on 31-10-2002 admitting Nil income. The return of income was processed under section 143(1) of the Act on 27-12-2002. Subsequently, it was noted by the Assessing Officer that the assessee had sold commercial rights for a consideration of Rs. 31,75,000 to M/s. Pintell Systems (P.) Limited. In order to consider the issue of capital gains, the assessment was reopened and the Assessing Officer completed the assessment under section 143(3) read with section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from section 55(2)(a) of the Act, "right to manufacture, produce or process any article or thing", held that the assessee clearly fell within the purview of section 55(2)(a) of the Act. He accordingly confirmed the action of the Assessing Officer that the amount received on the sale of the MOU was taxable as per specific provision of the Act. Aggrieved by the order of the CIT [A], the assessee is in appeal before us. 7. The learned counsel for the assessee submitted that section 2(14) of the Act defines the term "capital asset" to mean property of any kind held by an assessee whether or not connected with his business or profession. Certain exceptions have been provided in this sub-section. Therefore, marketing rights can be conveniently ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in agreement with the assessee's claim that there was no cost of acquisition for the asset sold. While accepting the assessee's contention but ignoring the Hon'ble Supreme Court's decision in the case of B.C. Srinivasa Setty applicable to the assessment year under consideration, the Assessing Officer arbitrarily imposed capital gains tax on the entire consideration received on account of transfer of the said asset. 8. On the other hand, the learned departmental representative relied on the orders of the authorities below and submitted that the assessee never sold its right to carry on the business of software development or its right to carry on any business. What was sold by the assessee company is only a specific sale contract with th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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