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2018 (4) TMI 1138 - DELHI HIGH COURTTransfer u/s 2(47) - capital gain - shares owned by the appellant at NIIT were not transferred in the assessment year 1998-99 but were transferred on 05.05.1998 (Assessment Year 1999-2000) when the same were delivered by the bankers to the purchasers (Glad Investment Pvt. Ltd.) - Held that:- We reject and not take into consideration the factual contention that the transfer deeds were received by NIIT on 22nd August 1997, which contention even otherwise is rather strange, if not incongruous for Deutsche Bank AG has stated that the assessee, i.e. Arjun Malhotra, had deposited the said shares as security with the bank on 10th September, 1997 for a loan of ₹ 2 Crores which was extended to M/s GIPL. If the shares had been deposited by the assessee with NIIT on 22nd August, 1997, then the shares would not have been pledged by the assessee as security with Deutsche Bank AG on 10th September, 1997. Shares were certainly not pledged by M/s GIPL. This is undisputed. The letter purportedly dated 14th August, 1997 also appears to be back dated for the first paragraph of the letter states that “I had provided the 100,000 shares of NIIT as collateral security for grant of loan to Glad Investments. Shares are currently registered in your name”. The shares were pledged with the bank on 10th September, 1997 and this fact was acknowledged and accepted in the letter dated 17th March, 2001. Therefore, it should be accepted that the letter though dated 14th August, 1997 was in fact issued after the shares pledged were registered in the name of M/s GIPL, sometimes after 10th September, 1997. The findings recorded by the tribunal as to the date of transfer are primarily based on facts. Decided against the assessee and in favour of the Revenue. Entitled to exemption u/s 54F - Held that:- The appellant-assessee has not placed on record any document or material referred to in the impugned order or the orders of the authorities to establish and show that the conclusion drawn was wrong and contrary to material on record. In fact, had the Assessing Officer not treated the shares as transferred in the AY 1999-2000, the appellant-assessee would not have been entitled to benefit under Section 54F of the Act on sale of 100000 NIIT shares to M/s GIPL as per the findings approved and recorded by the tribunal i.e., the assessee being owner of an existing house. Substitution of the sale consideration with the market value of the shares quoted at the stock exchange - AO had on the basis of the fair market value increased the total sale consideration - Held that:- The appellant-assessee had acquired non-cumulative preference shares on transfer of 100000 equity shares of NIIT. This is not in debate or doubt. This is not the case of the Revenue that the market value of the noncumulative preference equity shares were issued by M/s GIPL were of a higher value. Non-cumulative preference shares did not have right of conversion. Non-cumulative preference equity shares were redeemed at par during the relevant period and payment of ₹ 5,00,00,000/- was received - Tribunal was not correct in holding that the market value of the shares quoted in the stock exchange on 5th May, 1998 can be taken as a basis for computing capital gains under Section 48 - Decided in favour of the assessee and against the Revenue
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