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TMI Blog2014 (6) TMI 462X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-Tax, West Bengal, And Another Versus George Henderson And Co. Ltd. [1967 (4) TMI 18 - SUPREME Court], capital gain/loss arising on sale of shares has to be treated in a special manner. Act provides different treatments for sale of shares and exchange /otherwise transfer of shares – Decided against Revenue. - ITA No. 8272/M/11 - - - Dated:- 24-5-2013 - Sh. D. Manmohan And Rajendra,JJ. For the Petitioner : Shri Nitesh Joshi For the Respondent : Shri Preetam Singh ORDER Per Rajendra, A.M. Challenging the order dt. of the CIT(A)-27, Mumbai, Assessing Officer (AO) has raised following Grounds of Appeal: 1.On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in holding that the AO h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontinued till the year 2003. M/s. Rosy Blue (India) Pvt Ltd.(RBIPL) is other concern, owned by Sh. Harshad Mehta, Sh.Arun Kumar R Mehta, Sh. Bhanu Chandra Bhansali, incorporated in the year 1998.Family members of Sh. Harshad Mehta group were holding 21% of shares in RBIPL and there was no major change in the share holding pattern of the said company between 1998 and 2003. All these concerns are associated business concerns having transactions with each other regularly. Later on business hitherto carried under Partnership firms were transferred to or converted into corporate entities. Accordingly, the diamond business of the assessee firm was transferred to RBIPL in the year 2003-04. Assessee was allotted 59.63 lakh shares (16.71%) of RBIPL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of tax liability, that the AO had also not observed anywhere in his assessment order that the transactions were a colourable device to reduce the tax liability, that mode of computation of capital gains was provided in section 48 of the Act, that the cost of acquisition of the capital asset and the expenditure incurred in connection with the transfer thereof had to be deducted from the full value consideration received as a result of transfer of the capital asset, that sub-sections 45(1A), 45(2) and 45(4) provided for adopting FMV of the asset on the date of transfer as full value of consideration received for computing the capital gains, that section 50(c) provided for adopting the stamp duty value as full value of consideration recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade by the AO. 2.2. Before us, Departmental Representative (DR) submitted that in the cases relied upon by the FAA there was sale of shares, that in the case under consideration there was exchange, that AO had rightly adopted the FMV for calculating long term capital gains. He relied upon the cases of B M Kharwar(72ITR603)and Orient Trading Co.Ltd.(224ITR371). Authorised Representative (AR) submitted that transactions entered into by the assessee were sale, that AO has specifically mentioned in his order that shares were sold, that in the grounds of appeal also issue raised by the AO is about sale consideration, that assessee had sold shares and had suffered loss, that it had calculated loss as per the provisions of the Act, that AO was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ital asset is made, appearing in section 12B(2) of the Indian Income-tax Act, 1922, does not mean the market value of the asset transferred, but the price bargained for by the parties to the sale, etc. The consideration for the transfer of a capital asset is what the transferor receives in lieu of the asset he parts with, viz., money or money's worth, and therefore the very asset transferred or parted with cannot be the consideration for the transfer.The expression full consideration in the main part of section 12B(2) cannot be construed as having a reference to the market value of the asset transferred but the expression only means the full value of the thing received by the transferor in exchange for the capital asset transferred by h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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