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TMI Blog2012 (12) TMI 684X X X X Extracts X X X X X X X X Extracts X X X X ..... ntify the same. The aggregate consideration including initial and deferred consideration, however, was capped at Rs.20 crores less debt plus cash as per clause 3.2 of the agreement and thus maximum amount of consideration, in our opinion, was erroneously taken by the CIT as only the initial consideration of Rs.2.70 crores was certainly payable as consideration for sale of shares and that alone, could be taken into consideration and not the deferred consideration the receipt of which was neither certain nor the quantum thereof was ascertainable with any reasonable certainty - there was no error in the said assessments by AO as alleged by the CIT calling for revision u/s 263 - assessment orders made by the AO u/s 143(3) are restored - in favo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essments completed u/s 143(3) on 24-12-2008, the AO accepted the long term capital gains as declared by the assessees in their returns of income. The records of the said assessments came to be examined by the learned CIT and on such examination, he found that as per clause 3.2 of the agreement for sale of shares, the consideration for sale of shares was fixed at Rs.20 crores out of which Rs.2.70 crores was paid as initial consideration and balance amount was to be paid in a deferred manner as provided in the said agreement. Since the capital gain was declared by the assessee on sale of shares taking into consideration initial consideration of Rs.2.70 crores only and the said declaration was accepted by the AO in the assessment completed u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur owners of the shares as per the formula given in the agreement was Rs.12.81 crores including initial consideration and not Rs.20 crores. It was submitted that the deferred consideration received by the assessee in the subsequent years was offered to tax in those years in consonance with the provisions of section 45(5) and there was thus no under assessment of capital gain. It was also contended that the view taken by the AO while accepting the declaration of capital gain made by the assessee, in any case, was a possible view which could not be substituted by the learned CIT by his own view u/s 263. 3. The submissions made by the assessee as above were not found acceptable by the learned CIT. According to him, the total consideration for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l position of M/s Unisol Infraservices Pvt. Ltd. for the subsequent four years and such consideration as well as initial consideration was agreed to be maximum upto Rs.20 crores. He contended that the amount of Rs.20 crores as indicated in clause 3.2 was thus the maximum consideration agreed to be paid for sale of shares and not the agreed fixed consideration as presumed by the learned CIT. He invited our attention to the relevant details placed at page No.28 of his paper book to point out that all the four owners of the shares including two assessees finally received deferred consideration of Rs.2,79,94,320/- only in the subsequent years relevant to assessment years 2008-09 and 2009-10 and the same was offered to tax as capital gains in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons and also perused the relevant material on record including the relevant clauses of the agreement for sale of shares entered into between four owners of the shares and M/s Radhakrishna Hospitality Services Pvt. Ltd. which purchased the shares from the said owners. As per the relevant terms of the said agreement, consideration for sale of shares was agreed to be paid in two stages. The initial consideration of Rs.2.70 crores was to be paid at the time of agreement whereas the deferred consideration was to be paid in the subsequent years depending on the financial position of Unisol Infraservices Pvt. Ltd. in the subsequent four years upto 31st March, 2010 as per the formula given in the agreement. The amount of deferred consideration thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t alone, in our opinion, could be taken into consideration for computing profits or gains arising from the sale of shares which was chargeable to tax in the year under consideration and the deferred consideration, the receipt of which was neither certain nor the quantum thereof was ascertainable with any reasonable certainty, could not be taken into consideration. The capital gains declared by the assessee on sale of shares of Unisol Infraservices Pvt. Ltd. by taking into consideration the initial consideration alone, therefore, was righty accepted by the AO in the assessment completed u/s 143(3) and, in our opinion, there was no error in the said assessments as alleged by the learned CIT calling for revision u/s 263. The amount of Rs.20 cr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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