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2024 (5) TMI 951 - AT - Income TaxLTCG - sale consideration for transfer of unquoted shares - Determination of Selling Price of Shares for LTCG Calculation - AR s contention that the class of shareholders who are tenants and occupants of the property for getting the peaceful and complete possession required higher consideration and therefore that cannot be treated at par with the shareholders who were not occupants or tenants of the premises appears to be justifiable - HELD THAT - The contention of the AR that Section 50C will not be applicable in the present case as it is share of the Private Limited Company appears to be correct. The contention of the Ld. DR that invocation of Section 50C is applicable in the present case is not justified and as the asset of the Private Limited Company being immovable property has also given the share accordingly which cannot be treated at par as given u/s 50C to the value of equity share. Thus the decision of CIT vs. Salora International Limited 2016 (5) TMI 880 - DELHI HIGH COURT relied by the DR does not apply as here the assessee has explained as to why he has not been given same consideration in two group of shareholders as there were distinguishing facts involved amongst these shareholders group. DR relied upon the decision of the Tribunal in assessee s father s case in his written submission but has not filed copy of the same order. Therefore factual identification was not available in the present assessee s case. Ground no.1 is allowed. Deduction of rent paid against HRA as part of salary - Assessee provided evidence including Form 16 ledger accounts proof of rent paid and municipal receipts - HELD THAT - Assessee stated that the assessee is residing in the house of his grandfather and paying rent to the HUF for which the assessee has submitted Bank statement in respect of A.Y. 2008-09 and from the perusal of the other details it appears that the assessee is actually paying HRA and therefore in the light of the decisions taken by the Tribunal in case of Abhay Kumar Mittal 2022 (3) TMI 425 - ITAT DELHI and Bajrang Prasad Ramdharani 2013 (8) TMI 103 - ITAT AHMEDABAD the assessee is entitled for deduction of rent paid against HRA as part of salary. Ground no.2 is allowed.
Issues Involved:
1. Determination of the selling price of shares for calculating Long Term Capital Gains (LTCG). 2. Disallowance of deduction of rent paid against House Rent Allowance (HRA) received as part of salary. Summary: Issue 1: Determination of Selling Price of Shares for LTCG Calculation The assessee contested the CIT(A)'s confirmation of the selling price of 201 shares of Chamanlal Mehta & Co. Pvt. Ltd. (CMPL) at Rs. 14,616/- per share, as estimated by the AO, instead of the actual consideration received at Rs. 8,512/- per share. The assessee argued that u/s 48, the full value of consideration should denote the actual amount received. The AO had substituted the sale consideration based on the price received by another group of shareholders, who were also tenants and occupants of the property, thus receiving a higher price. The Tribunal noted that the internal arrangement justified the different prices and that Section 50C, which pertains to land or building, was not applicable. The Tribunal found the assessee's explanation reasonable and allowed the ground, stating that the CIT(A) misunderstood the explanation and the AO's substitution was not justified. Issue 2: Disallowance of Deduction of Rent Paid Against HRA The assessee challenged the CIT(A)'s confirmation of the disallowance of Rs. 1,86,400/- rent paid against HRA received. The assessee provided evidence including Form 16, ledger accounts, proof of rent paid, and municipal receipts. The Tribunal noted that the assessee resided in a house owned by the HUF and actually paid rent. Citing precedents, the Tribunal concluded that the assessee was entitled to the deduction of rent paid against HRA and allowed the ground. Conclusion: The appeal of the assessee was allowed, with both grounds decided in favor of the assessee. The Tribunal pronounced the order on January 3, 2024.
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