2005 (3) TMI 712

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..... P. Seetharama Reddy and P. Changa Reddy (together called P.S.R. Group ) has owned substantial portion of shares of two public limited companies-Madanapaloly Spinning Mills (hereinafter referred to as MSM ) and Jyothi Prakash Spinning Mills (hereinafter referred to as JPSM ) and were managing the two companies together. There appears to have some dispute between the two groups. A memorandum of understanding was entered into in September 1989 to resolve the disputes, but in spite of a number of meetings finder details for implementation could not be worked out. Arbitrators were appointed to examine. (1)The mode of separation of management and control of the two companies MSM and JPSM between TNK group and PSR group. (2)To re-examine .....

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..... and received 5,834 JPSM shares in return. The assessee filed a return as per which the capital gains was worked as under : Rs. Value of 4542 shares of MSM @ Rs. 130 per share 5,90,460 Value of 5834 shares of JPSM @ Rs. 100 per share 5,83,400 Surplus on exchange of shares 7,060 Less : Deduction under section 48(2) 7,060 Capital Gains Nil 2.2 The Assessing Officer held that the market value of shares transferred has to be taken on yield basis, which was arrived at 251.38 per share. He reduced the cost of acquisition of share transfer, and after allowing deduction under section 48(2), capital gain was computed. The learned CIT(A) aft .....

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..... transaction is a family arrangement and hence capital gain is not to be charged, we find no such ground has been raised before us in the ground of appeal. The permission to raise an additional ground was neither sought nor any such additional ground is filed. We, accordingly, do not wish to announce, whether the transaction is family arrangement and consequential, where any capital gain is chargeable. 5. As per the facts, it is seen that the assessee transferred its holding of shares, since the shares are transferred, and the same was within the definition of transfer capital gain, is chargeable to tax. The assessee while filing return of income considered, consideration of accruing, as a result of transfer at Rs. 130 per share. The lea .....

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