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TMI Blog2014 (3) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... d permitted the foreign investor to bring in the foreign currency for purchase of the shares - the entire sale consideration received by him is relatable to the transfer of shares and is assessable only as a long term capital gain. There was no reason to differ from the findings of the CIT(A) - Assessee justified the sale of shares at higher price and also explained the circumstances in which the foreign company negotiated and paid that amount - assessee is employed on salary basis and he has no business activity so as to invoke provisions of section 28(iv) - Unless there is a business activity, benefit in the business does not arise - As rightly noticed by the CIT(A), even the transfer of management rights is also transfer of capital as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d exemption under section 54F of the I.T. Act. The assessee also admitted the income from remuneration and income from other sources besides admitting short term capital gain. There is no dispute with regard to the determination of income under the head Salary , short term capital gain or Income from other sources . The A.O. however, did not accept the computation of long term capital gain on sale of shares of Yodeva Plastics Pvt. Ltd. held by the assessee. The A.O. was of the view that the fair market value of the share can at best be determined at Rs.614/- per share. The A.O. was, therefore, of the view that the balance consideration of Rs.346/- per share was not attributable to the sale of shares but represents the amount additionall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption u/s. 54F only to the said extent. He determined the profit assessable under section 28(iv) at Rs.1,53,26,762/-. 3. It was submitted before the learned CIT(A) that the share holdings in Yodeva Plastics Pvt. Ltd. was held by the assessee and his family members. Some of the shares were sold by the other family members in the preceding A.Y. itself. With the acquisition of the said shares the International company Alpla India Pvt. Ltd., held 66.90% shares. The said company wanted to acquire the balance of shares and the assessee did not like to dispose of the shares as the assessee had seen financial growth of the company because of its association with Alpla India Pvt. Ltd. Therefore, the assessee quoted a price of Rs.1500/- per s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, he was in a position to demand a higher price. d) The assessee also relied on the proceedings before the FIPB wherein the foreign investor was permitted to acquire the equity shares of Yodeva Plastics Pvt. Ltd. at Rs.6.97 crores. It was submitted by the assessee that such permission was obtained even for the earlier sale. Therefore, the assessee submitted that the market value for sale of shares has the approval by one wing of Government of India. e) The assessee also submitted that the right to the controlling interest in the management of the company is also a capital asset and not a stock in trade for the assessee and, therefore, the assessee claimed that the balance of consideration also is attributable to transfer of a ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of Rs.960/- per share. The appellant brought on record evidence to show that the foreign company intended to acquire the total share holdings and the appellant was in a position to quote the rate per share. Therefore, the appellant could get a substantial rate. The appellant also brought on record evidence to show that one Government Wing accepted the rate and permitted the foreign investor to bring in the foreign currency for purchase of the shares. Therefore, I am satisfied with the contention of the appellant that the entire sale consideration received by him is relatable to the transfer of shares and is assessable only as a long term capital gain. I am also impressed with the alternate claim made by the appellant. The Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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