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Commissioner of Income Tax-IV Versus M/s. B. Arunkumar & Co.

2016 (3) TMI 758 - BOMBAY HIGH COURT

Addition on Long Term Capital Gain on account of sale of share - ITAT deleted the addition - Held that:- We find that both Commissioner of Income Tax (Appeals) as well as the Tribunal have rendered a finding of fact that the consideration of ₹ 750/- and ₹ 936/- per share received on the sale of the shares by the respondent-assessee was in fact the full consideration which have been disclosed to the revenue.

It is not the case of the revenue that the amount disclosed by th .....

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ic provision has been made in the Act. To illustrate Section 50C of the Act provides for stamp value duty in case of transfer of land or buildings. Similarly, Section 45(2) and 45(4) of the Act in cases of conversion of the investment into stock in trade or transfer of shares on dissolution of a firm to its partners respectively has to be at market value. In this case computation of capital gain is governed by Section 48 of the Act and it only refers to full value of consideration received. The .....

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of 2013 - Dated:- 8-3-2016 - M S Sanklecha And A K Menon, JJ. For the Appellant : Mr Tejveer Singh For the Respondent : Ms Vasanti Patel ORDER P. C. 1. This Appeal filed by the Revenue under Section 260A of the Income Tax Act, 1961 ( the Act) takes exception to the order dated 24th May, 2013 passed by the Income Tax Appellate Tribunal (Tribunal). The impugned order dated 24th May, 2013 relates to Assessment Year 2008-09. 2. Mr. Singh, learned counsel appearing for the revenue urges only the foll .....

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ings in M/s. Inter Gold (India) Pvt. Ltd. to one M/s. Rosy Blue (I) (P) Ltd. and returned a capital loss as under: - No. of Shares Cost (Rs.) Index Cost (Rs.) Sale Value (Rs.) Gain/Loss (Rs.) 37612 3,52,29,659 4,55,67,000 3,52,29,659 (1,03,37,341) 1,50,450 11,28,37,500 13,90,90,520 11,28,38,500 (2,62,53,020) Therefore the consideration for the sale of shares in two tranches were ₹ 750/ - per share and R.936/- per share respectively. 4. The Assessing Officer did not accept the capital loss .....

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ores instead of loss at ₹ 3.65 crores as claimed. 5. Being aggrieved the respondent assessee carried the issue in appeal to the Commissioner of Income Tax (Appeals). By order dated 20th September, 2011, the Commissioner of Income Tax (Appeals) allowed the appeal of the respondent-assessee. It referred to Section 48 of the Act to hold that the capital gains are computed as follows: from the full value of consideration received as a result of the transfer of the capital assets, the cost of a .....

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In contrast attention was drawn to Section 50C of the Act which provides for substitution of the consideration received on sale of land and buildings by the stamp duty value of land and buildings (immovable property). It further held that the Assessing Officer cannot substitute the consideration shown as received on sale of shares by the respondent-assessee in the absence of bringing evidence on record to indicate that the consideration disclosed on sale of shares was not the complete considerat .....

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g its tax liability. It was done with a veiw to consolidate the business. Moreover it observes that it is also not the case of the revenue that the entire transaction of sale was a colourable device to reduce tax liability. The Tribunal in the impugned order placed reliance upon decision of the Apex Court in CIT v/s. Gillaners Arbuthnot and Co. (87 ITR 407) and CIT v/s. George Henderson & Co. Ltd. (66 ITR 622) to conclude that where a transfer of an capital assets takes place by sale on rece .....

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Singh, learned counsel for the revenue submits that the decisions of the Apex Court relied upon in the impugned order were rendered under Income Tax Act, 1922 and therefore would not apply while considering the Act. 8. We find that both Commissioner of Income Tax (Appeals) as well as the Tribunal have rendered a finding of fact that the consideration of ₹ 750/- and ₹ 936/- per share received on the sale of the shares by the respondent-assessee was in fact the full consideration which .....

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