TMI Blog2023 (5) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... d Development Ltd by taking the total sale consideration at Rs.25 lakh. As a result, the grounds raised by the Revenue are dismissed. - ITA No. 1432/Mum./2022 - - - Dated:- 31-3-2023 - SHRI M. BALAGANESH , ACCOUNTANT MEMBER AND SHRI SANDEEP SINGH KARHAIL , JUDICIAL MEMBER For the Assessee : Shri K. Gopal For the Revenue : Shri Ajay Soneji ORDER PER SANDEEP SINGH KARHAIL , J. M. The captioned appeal has been filed by the Revenue challenging the impugned order dated 25/11/2021, passed under section 250 of the Income Tax Act, 1961 ( the Act ) by the learned Commissioner of Income Tax (Appeals) 54, Mumbai, [ learned CIT(A) ], for the assessment year 2009 10. 2. The present appeal is delayed by 130 days. At the time of the hearing, the learned Departmental Representative ( learned DR ) by referring to the authorisation memo submitted that the copy of the impugned order was received on 16/12/2021, and the last date for filing of appeal, in this case, was 14/02/2022. By placing reliance upon the order dated 10/01/2022, passed by the Hon'ble Supreme Court, in M.A. no.21 of 2022, in M.A. no.665 of 2021, in Suo-Motu Writ Petition (Civil) no.3 of 2020, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Development Ltd, considering the full value of consideration at Rs.10 crore. The return of income filed by the assessee was selected for scrutiny. Vide assessment order dated 26/12/2011, passed under section 143(3) of the Act, the income of the assessee was determined at Rs.27,28,75,510, after making disallowance under section 14A of the Act. In its appeal before the learned CIT(A), the assessee raised an additional ground of appeal relating to a recomputation of capital gains on the sale of shares of its wholly-owned subsidiary by revising the sale consideration from Rs.10 crore to Rs.25 lakh, on the basis that the parties have entered into Settlement Deed and Supplementary Share Purchase Agreement, whereby the total consideration of the sale of shares of the wholly-owned subsidiary company was reduced to Rs.25 lakh. The learned CIT(A) vide order dated 27/01/2014, rejected the request of the assessee to admit the additional ground of appeal. In further appeal, the Co ordinate Bench of the Tribunal vide order dated 28/08/2017, set aside the matter on this issue to the file of the Assessing Officer ( AO ) to verify the genuineness of the claim of the assessee that sale considera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal sales consideration of Rs.25 lakh. Being aggrieved, the Revenue is in appeal before us. 8. During the hearing, the learned DR submitted that the learned CIT(A) has not examined how the sales consideration of Rs.10 crore was reduced to Rs.25 lakh. The learned DR further submitted that the learned CIT(A) did not appreciate that the post facto event cannot reduce the sales consideration. 9. On the contrary, the learned AR by referring to the various documents, forming part of the paper book, such as initial Share Purchase Agreement, Settlement Deed, Supplementary Share Purchase Agreement, Mortgage Deed, proceedings under section 138 of the Negotiable Instrument Act, the order passed in the Civil Suit by the learned Civil Judge, Gurgaon, submitted that the parties mutually agreed to resolve and settle various legal and criminal disputes, which started after the parties came to know certain facts after the execution of the initial Share Purchase Agreement. It was further submitted that the parties also mutually agreed to revise the sale consideration of shares from Rs.10 crore to Rs.25 lakh. The learned AR further submitted the receipt of Rs.25 lakh as sale consideration of sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filing its return of income. 11. From the perusal of the Share Purchase Agreement dated 04/12/2008, forming part of the paper book from pages 1-8, it is evident that for the purchase of shares of Shivalik Land Development Ltd. from the assessee, M/s Virasat Agro Foods Private Limited had agreed to make payment of Rs.10 crore in two trenches, (i) demand draft Rs.25 lakh dated 05/12/2008, was handed over at the time of signing of the agreement, and (ii) undated cheque of Rs.9.75 crore. It was also agreed that the assessee shall be entitled to encash the undated cheque of Rs.9.75 crore on the 30th day from the Letter of Intent issued by the Competent Authority or 31/07/2009, whichever is earlier. After the transfer of shares of Shivalik Land Development Ltd., M/s Virasat Agro Foods Private Limited purchased subject land from M/s Padmini Technologies Ltd and entered into sale deed for said land. Vide Mortgage Deed dated 12/12/2008, forming part of the paper book from pages 110-114, Shivalik Land Development Ltd. agreed to mortgage the land, admeasuring 11.30 acres situated at Kherki Dhaula, Tehsil Sohna, District Gurgaon, to the assessee as a security for the payment of the balance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the cases as detailed below: Indiabulls Real Estate Ltd vs. Virasat Agro Foods Pvt. Ltd. Others (Complaint u/s 138 of NI Act bearing No 5079 dated 11.09.2009) with next date of hearing scheduled for 02-04-2012 pending in the court of Shri Sukhpreet Singh, JMIC, Gurgaon. Arbitration Case No. 444/2010 titled Indiabulls Real Estate Ltd Vs Virasat Agro Foods Pvt. Ltd Another pending before Justice P. K Bahri (Retd) with next date of hearing scheduled for 10.02.2012 (includes a claim by Indiabulls and a counter claim by Virasat). Shivalik Land Development Ltd Vs Padmini Technologies Ltd. Others (Indiabulls being Defendant No. ) Civil Suit No.369/09 pending in the court of Shri Sunil Chauhan with next date of hearing scheduled for 07-03-2012. 15. From the perusal of the aforesaid Settlement Deed, forming part of the paper book from pages 9-13, it is evident that the parties also agreed that the consideration for the purchase of shares shall stand revised from Rs.10 crore to Rs.25 lakh and in this regard shall execute a Supplementary Share Purchase Agreement to modify the terms and conditions of initial Share Purchase Agreement. It was also agreed that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated cheque of Rs. 9.75 crore was not presented by 31/07/2009, we find that the same itself is contradictory to clause 3.3 of the Share Purchase Agreement dated 04/12/2008, which reads as under:- 3.3 The Seller shall be entitled to encash the undated cheque for Rs.9,75,00,000 on the 30th day from the LOI being issued by the authorities on 31.07.2009 which ever is earlier. 18. As per the assessee, since LOI was not issued by the authorities, therefore as per the aforesaid clause the assessee could have encashed the cheque on 31/07/2009. However, as noted above the said cheque was returned unpaid due to insufficient funds, and therefore the assessee initiated proceedings under section 138 of the Negotiable Instrument Act. Nothing has been brought on record by the Revenue to show that the valuation of shares of Shivalik Land Development Ltd. is Rs.10 crore and therefore the computation of capital gains in the hands of the assessee should be done accordingly. As noted from the documents available on record, the parties agreed to a consideration of Rs.10 crore on the basis of circumstances as existing on 04/12/2008. However, subsequently, when the title of the subject land it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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