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TMI Blog2012 (11) TMI 942X X X X Extracts X X X X X X X X Extracts X X X X ..... ear 2007-08. The appeals are directed against the orders passed by the Commissioner of Incometax( Appeals) -I at Chennai on 2.12.2011. The appeals arise out of the respective assessments completed under sec.143(3) read with sec.153A of the Income-tax Act, 1961. 4. First we will consider the appeals filed by the Revenue. The assessees are the promoter shareholders of M/s. Cyber Hills Developers(CHD). They belong to M/s. EMMAR MGF of Koneru group of concerns. 5. The promoter shareholders (asseessees in these cases) of CHD entered into an agreement on 24.4.2006 for transfer of all share holdings to M/s. Winsome Entertainment and Tourism Pvt. Ltd. (WET). The consideration was stated at Rs.32,99,31,547/-. CHD received an amount of Rs.27,99,31,547/- from the above said consideration in the previous year relevant to the impugned assessment year 2007-08. 6. As per the agreement, 50% of the shareholdings had to be transferred to WET in the previous year relevant to the assessment year 2007-08 itself. Accordingly, the promoter assessees have transferred 50% of the share holdings to WET in the previous year relevant to the assessment year under appeal. The proportionate balance amount was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the entire capital gains arising out of the sale and transfer of the shares of CHD must be taxed in the assessment year 2007-08 itself and the assessees are not justified in dividing the long term capital gains between two assessment years 2007-08 and 2008-09. The Assessing Officer held that the transfer of shares in fact represented sale and transfer of land situated in Hyderabad. The capital asset transferred by the assessees was the land and the shares were only representing that capital asset in the nature of land. The Assessing Officer held that the land is qualified as immovable property within the meaning of sec.269UA. The Assessing Officer held that the transfer was complete in the previous year relevant to the assessment year 2007-08 in view of the provisions of sec.53A of the Transfer of Property Act. The possession of the immovable property has been transferred to WET and lion share of the consideration was already paid and therefore, WET has become the de facto owner of the property and but for the technicality of the registration and conveyance, as such, the entire sale was concluded in the impugned previous year relevant to the assessment year 2007-08 itself and conse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t only 50% shares were sold in the previous year relevant to the assessment year under appeal. Accordingly, he deleted the excess capital gains considered by the assessing authority in the hands of the assessees. He confirmed that the assessees were right in offering capital gains with reference to the sale of 50% of share holdings in CHD. 10. Revenue is aggrieved and, therefore, these appeals before us. Obviously, grounds raised in all these appeals are common. The ground is that the Commissioner of Incometax( Appeals) has failed to note that the transactions relating to sale of shares were linked with transfer of immovable property held by the company and hence sec.2(47) is relevant in these cases. It is also the case of the Revenue that the Commissioner of Income-tax(Appeals) has failed to note that the assessees had received nearly 90% of sale consideration in this assessment year itself and there is no case for treating some portion of the amount as advance and, therefore, the Assessing Officer was justified in treating the entire amount of capital gains taxable for the impugned assessment year 2007-08. 11. We heard Shri Shaji P. Jacob, the learned Commissioner appearing fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be taking a final shape only in the previous year relevant to the assessment year 2009-10. It is in anticipation of the fulfillment of all these efforts that the assessees have entered into an agreement with WET as a business proposition. The agreement is not an agreement for sale simplicitor. It is a comprehensive business deal. The company, CHD had to be conveyed with the right over the property by L&T as and when L&T gets the documents ready to execute the conveyance in favour of CHD. It is only thereafter CHD could have transferred the land and property to WET. As already mentioned by the Commissioner of Income-tax(Appeals) in his order, so many conditions are to be fulfilled by CHD before closing the agreement. The technical possession enjoyed by CHD over the land was for initiating preliminary operations for constructing the proposed buildings and structures. When all these facts and circumstances are taken into consideration, it is not possible to hold a view that the entire land and property was transferred by CHD to WET in the previous year relevant to the assessment year 2007-08. As already held by the Commissioner of Incometax( Appeals), only 50% shares of CHD were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ands of the assessees for the assessment year 2008-09 for that remaining part of long term capital gains. It is in the above background that he has passed the revision orders. 19. Now, while confirming the orders of the Commissioner of Income-tax(Appeals) for the assessment year 2007-08, we have held that the capital gains have to be assessed for the two assessment years 2007-08 and 2008-09. When that is the position, there is no necessity of making protective assessments on that ground for the assessment year 2008-09. Therefore, we find that the revision orders passed by the Commissioner of Income-tax have become infructuous. The orders are therefore, set aside. 20. In result, the appeals filed by the Revenue are dismissed and the appeals filed by the assessees are allowed. CORRIGENDUM This corrigendum is issued to set right certain errors reflected in the common order passed by the Tribunal in these appeals on 24th July, 2012. The anomaly is seen crept into the end-portion of the common order, where the result of the appeals are declared. 2. In these cases, the appeals filed by the Revenue have been dismissed by the Tribunal. The orders of the Commissioner of Income-tax(Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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