TMI Blog2023 (8) TMI 819X X X X Extracts X X X X X X X X Extracts X X X X ..... as more fully specified in Annexure-A. They have an absolute right to sell the shares, free from all liens, charges and encumbrances. Therefore, it is established that the adoption of value by the AO as on the date of transfer was only a hypothetical value i.e. the price as on 28.4.2008. Hence, the resulting addition is not tenable. It is settled law that full value of consideration used in section 48 does not have any reference to market value but only to consideration referred to in sale deeds as sale price of assets which have been transferred, as laid down in the case of CIT vs. Gillanders Arbuthnot Co. ( 1972 (9) TMI 13 - SUPREME COURT ) It is settled law that an agreement always has to be taken to be correct if the assessee has acted in bonafide manner, unless AO has brought evidence on record that it is fraudulent. In this case the Revenue has not been able to establish malafide on the part of the assessee. We note that decision of SA Builders Ltd. [ 2006 (12) TMI 82 - SUPREME COURT ] wherein, it has been held that AO cannot step in the shoes of the businessman and decide as to how affairs of business were to be run and wasteful or excessive expenditure was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his company at Rs. 13.50 per shares as on 28/4/2008 when the transfer actually took place. That the value of a share has got to be adopted on the date of transfer, since that is the only relevant date when the capital gain accrues. That the assessee has itself admitted the date of sale as 28/4/2008 since it has been shown in the year under consideration. That there is no dispute with regard to the fact that the price of share of this company as on 28/4/2008 was Rs. 20.50 per share. In view of the above, AO held that full value of consideration in respect of this transaction is adopted at Rs. 50.50 per share the sale value of 1538460 shares would work on to Rs. 3,15,38,430/-. The assessee has declared the full value of consideration at Rs. 20769210/- and hence the AO made addition of Rs. 1,07,69,220/-. 5. Upon assessee s appeal, the Ld. CIT(A) confirmed the action of the Assessing Officer. 6. Against this order, the assessee is in appeal before the Tribunal. We have heard both the parties and perused the records. 7. The Ld. Counsel for the assessee submitted that original return was filed on 18.03.2009 and revised return filed on 17.09.2010 declaring loss of Rs. 16,68,409 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 40,13,824 on 24 Jan. 2008 refer Pg 104 1st Instalment within 7 working days -10% of the purchaser price i.e. Rs. 20,76,921 refer Pg 56,57,76 Rs. 1,62,88,660 on 29th April 2008 refer Pg 104 On date of conclusion of open offer-remainder after set off of transaction fee-Rs. 1,42,11,739 Pg. 56,57,76 of PBK 8. The Ld. Counsel for the assessee further relied upon following propositions:- [ I ] Full value of consideration used in section 48 does not have any reference to market value but only to consideration referred to in sale deeds as sale price of assets which have been transferred i. Commissioner of Income tax vs Gillanders Arbuthnot Co. [1973] 87 ITR 407 (SC) ii. Commissioner of Income tax vs George Henderson and Co. Ltd. [1967} 66 ITR 622 (SC) iii. K.P. Varghese vs Income Tax Officer [1981] 131 ITR 597 (SC) iv. Commissioner of Income tax vs Smt. Nilofer I. Singh [2009] 309 ITR 233 (Delhi) v. Dev Kumar Jain vs Income Tax Officer [2009] 309 ITR 240 (Delhi) vi. Arjun Malhotra vs Commissioner of Income Tax {2018} 403 ITR 354 (Del) vii. Anurag Jain.In re [2005] 277 ITR 1 (AAR) Delh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee declared long term capital gain on sale of listed share of M/s Axis IT T Limited and as per the sale purchase agreement dated 11.01.2008, 60.69% shares holders came together and agreed to sell their holding to one party at an agreed rate of Rs. 13.5/- per share and all the conditions mentioned in agreement were complied in accordance with SEBI Regulations. In the agreement, it was also mentioned that there are no related party transactions. The advance of Rs. 40,13,824/- and balance payment of Rs. 1,62,88,660/- was received on 24.1.2008 and 29.4.2008 respectively after deducting transaction fee and the ledger of the purchaser in the books of the assessee was also filed vide letter dated 4.11.2011. The share price of M/s Axis IT T Limited was Rs. 11.21/- per share on the date of signing the term sheet on 30.11.2007 showing share price from the website moneycontrol.com. We note that the payments were made as per agreement to sell and the same is verifiable from the bank statements. In view thereof, it is crystal clear that the transaction was an off market transaction of listed shares held by the assessee as an investment in its balance sheet and assessee has entered into a sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he meaning of the expression full value of the consideration for which sale is made ? Is it the consideration agreed to be paid or is it the market value of the consideration? In the case of sale for a price, there is no question of any market value unlike in the case of an exchange. Therefore, in cases of sales to which the first proviso to sub-section (2) of section 12B is not attracted, all that we have to see is what is consideration bargained for. To the facts of the instant case, the first proviso was not attract. The price bargained for the sale of the shares and securities was only rupees twenty-five-lakhs. The full value of the sale price received by the assessee was only rupees seventy-five lakhs. That being so, the capital gains made by the company were Rs. 27,04,772/- as held by the High Court. The case was decided partly in favour of the assessee. 10.1 It is settled law that an agreement always has to be taken to be correct if the assessee has acted in bonafide manner, unless AO has brought evidence on record that it is fraudulent. In this case the Revenue has not been able to establish malafide on the part of the assessee. Besides above, we note that d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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