9911796707
TMI Blog2000 (6) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the case, the learned CIT(A) ought to have looked into the fact whether the foreign company had in fact made any gain chargeable to tax under the provisions of the Income-tax Act, 1961. 3. The learned CIT(A) erred in holding that the working of capital gains chargeable to tax made by the appellant is incorrect. 4. The learned CIT(A) erred in holding that the cost of acquisition as well as the sale consideration has to be considered in 'Rupee' equivalent only. Since the assets are in India and that transfer is of shares held in Indian Company. 5. The learned CIT(A) erred in holding that the appellant's valuation based on US Dollars has to be rejected. 6. The appellant contends that the learned CIT(A) erred in not appreciating th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,67,500 4-8-1977 1,67,500 ---------------------------------------------------------------------------------------------- (b) By way of adjustment of Technical know-how fee. ---------------------------------------------------------------------------------------------- 19-6-1975 Rs. 5 00,000 ---------------------------------------------------------------------------------------------- Thus, M/S. Abex Corporation, USA has acquired 1,17,000 shares and the cost of the above shares in Indian Rupees is worked out to Rs. 11,70,000. As a part of purchase agreement between Asea Inc. Abex Corporation regarding the sale of shares of Abex Corporation vide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31-1-1990 Rs. 21,180 ------------------------- Rs. 78,770 or 80,000 --------------------------------------------------------------------------------------------- The assessee filed return of income subsequent to the above letter disclosing a loss of Rs. 2,56,354. While arriving at the above figure the cost of acquisition is arrived at in US Dollars thereby arriving at a loss. 3. After hearing the above said representation, the Assessing Officer negatived the contention of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned Deptl, Representative, Shri C.P. Ramaswamy has argued that the abovesaid Rule 115A r.w.s. section 48 of the Income-tax Act is applicable only from assessment year 1990-91 onwards. He has also further argued that the abovesaid rule is not retrospective and it is only prospective. The present case-on hand relates to assessment year 1987-88. So he vehemently argued that the arguments of the learned counsel for the assessee do not hold good to attract the abovesaid provisions. He has also further argued that the working given by the assessee is not correct since the assets are in India and the transfer of the shares held in Indian company, the cost of acquisition as well as the sale consideration is to be considered in rupee equivale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n nature in the light of the abovesaid Supreme Court judgment. Though the assessee has not drawn the attention of the Bench to the abovesaid ruling, we have taken judicial notice of the abovesaid judgment to arrive at a correct conclusion. Hence the argument of the revenue that the said Rule 115A read with section 48 of the Income-tax Act is not applicable for the relevant assessment year is not tenable. Here the assessee is a non-resident company. The shares in question were acquired by paying in US Dollars as seen from the statement of facts. The NRI company has remitted 81,422 US Dollars which came to Rs. 6,70,000 as part purchase consideration for acquiring 1,17,000 equity shares. The N.R.I. Company was allotted shares in lieu of paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ach. It is only because of the subject-matter being shares of an Indian Company, that the question of assessing the capital gains in India has arisen. 6.2 The allotment of shares in lieu of payment of technology transfer fee of Rs. 1 lakh amounts to constructive payment of technology transfer fee of Rs. 5 lakhs in US Dollars equivalent thereto. If that is so, the entire payment for acquisition of shares in question was made by the NRI company in US Dollars. The sale consideration also was received in US Dollars. The sale was made outside India. That being so, there is no reason to convert both cost of acquisition and sale consideration from US Dollars into Indian Rupees. Instead, capital gains if any should be first worked out on the basi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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