9911796707
TMI Blog2015 (11) TMI 539X X X X Extracts X X X X X X X X Extracts X X X X ..... (A.Y. 2007-08) read as under:- "1. That having regard to the facts and circumstances of the case Ld. CIT(A) has rightly deleted the addition of Rs. 2,34,47,563/-, which was made by AO on the ground of alleged sale proceeds of shares received by the appellant as against Rs. 3,00,000/- declared by her. 2. The Ld. CIT(A) is erred under the law while holding that AO has a valid jurisdiction u/s. 153A of the Act. 3. That the Cross Objectors craves the leave to add, amend, modify, delete any of the ground(s) of cross objection before or at the time of hearing." 4. Briefly stated the facts are that the Original return declaring net taxable income of Rs. 6,69,800/- was filed on 30.7.2007 with ACIT, Circle-35(1), New Delhi. The return was duly processed u/s 143(1) of the l.T. Act. She is one of the directors of M/s Mahagun (India) Pvt. Ltd. The search was conducted on 26.8.2008 at the business premises i.e. Plot No.A-19, Sector-63, Noida. Consequent upon search, the case was centralized with Central Circle-5, New Delhi vide order dt.06.11.2009. At the time of search, certain documents pertaining to the assessee were found and seized. Accordingly, after recording of the satisfactio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value of shares of Mahagun (India) Pvt. Ltd. as on 31.3.2006 (the case is also assessed in this Circle only). On 31.3.2006, Mahagun (India) Pvt.Ltd. had issued and allotted the. following shares at the rate and premium mentioned below.- Name of the Share Applicant No. of shares Face Value (per share) Share Premium (per share) Total amount received Mahagun Developers Ltd. 280000 10/- 240/- 7,00,00,000/- Mahagun Realtors Pvt. Ltd. 236000 10/- 240/- 5,90,00,000/- ADR Home Décor Pvt. Ltd. 11600 10/- 240/- 29,00,000/- 4.4 Thus, there is independent evidence that the value of shares of Mahagun (lndia) Pvt.Ltd. was Rs. 250/- per share after including premium of Rs. 240/- per equity share. The assessee, Smt. Divya Jain, possessed 3000 shares of Mahagun Realtors Pvt. Ltd. which were equivalent to 3000 x 45 -1,35,000 shares of Mahagun (India) Pvt. Ltd. The value of each share of Mahagun (India) Pvt. Ltd. on 31.3.2006 was Rs. 250/- and on that basis the fair market value of 3000 shares of Mahagun Realtors Pvt. Ltd. comes to 1,35,000 x 250 -Rs.3,37,50,000/-. Therefore, in view of the close nit family connections and intersee transactions, it is held that the assessee r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3,00,000/- as claimed by the assessee and computed the capital gain based on this fictional amount. Ld. CIT(A) deleted the addition and held that so far assessee is concerned, she sold her shares on 01.12.2006 much before the date of the order of High Court and she received Rs. 3,00,000/- only and when High Court approved the scheme on 10.09.2007, the share were not held by the assessee because she had already sold her shares on 01.12.2006. In fact, there is no infirmity in the order of Ld. CIT (A) as u/s 45 read with section 48, actual sale consideration in the hands of the assessee is the sole determining factor 'for computing the capital gain. Assessee sold her shares on 01.12.2006 on "as is where is" basis @ Rs. 100/shares. If by subsequent order of High Court dated 10.09.2007, some more consideration in the form of shares were to be received, it was to be received and in fact was received by the holder of shares on the date of the order of High Court which in any case was not the assessee. Therefore, there was no question to say in the present case that assessee received enhanced consideration. Fact of the matter is that assessee did not receive anything except an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is no infirmity in the order of Ld. CIT(A). Assessee's Cross Objections The only issue in Cross Objection is regarding assumption of jurisdiction u/s 153C (wrongly mentioned as 153A in the grounds of appeal). Submission of the assessee is that for assuming jurisdiction u/s 153C, not only the documents of the assessee should be found and seized but those documents found and seized must be of incriminating nature. To treat a person as searched u/s 153C is very harsh and mere discovery of disclosed documents should not confer this harsh jurisdiction, as held in the judicial decisions given herein after. PB 25 is the copy of notice u/s 153C. PB 26-29 is the copy of document, which is copy of the sale deed of property, B-66, Vivek Vihar, purchased by the assessee for Rs. 22,00,000/- on the basis of which the jurisdiction has been assumed u/s 153C. PB 30-33 in the copy of return of the assessee wherein at PB-33, the property B-66, Vivek Vihar has been shown for Rs. 11,72,959/- (being half share of the assessee, inclusive of expenses). PB 34-40 are the submission before Ld. A.O. submitting that the document was not incriminating and was disclosed in the retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale of capital assets take place the capital gain arising out of such transfer has to be computed by looking at full value of consideration received or accruing as a result of such transfer. The expression "full value of consideration" is not the same as "fair market value" as appearing in section 55A of the Act. Thus for the purpose of computing capital gain there is no necessity to determine the fair market value unless it is specifically provided in the Act. Reliance is placed on the following authorities:- Moral Trading & Investment Ltd. vis. DCIT (2011) 007 ITR (Trib) 0548 (Delhi) CIT vis. I.P. Chaudhari (2010) 328 ITR0007 (Del) CIT v. Lake Palace Hotels and Motels Ltd. [2010]321 ITR 165 (Raj) CIT vis. Ni/ofar I Singh (2009) 309 ITR 0233 (Del) Rupee Finance Vs ACIT( Mumbai ITAT) (2009) 310 ITR 403 Dev Kumar Jain vis. ITO (2009) 309 ITR 0240(Del) Commissioner of Income Taxrge Henderson and Co. Ltd. (1967) 066 ITR 0622 (SC) Commissioner of Income Tax vis. Gillianders Arbuthnot and Co. Gillanders Arbuthnot and Co. v/s. Commissioner of Income Tax (1973) 087 ITR 0407 (SC) CIT v/s Shivakami Co. P Ltd. [1986]159 ITR 0071. CIT v. Vania Silk Mills P. Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that when a sale of capital assets take place the capital gain arising out of such transfer has to be computed by looking at full value of consideration received or accruing as a result of such transfer. The expression "full value of consideration" is not the same as "fair market value" as appearing in section 55A of the Act. Thus for the purpose of computing capital gain there is no necessity to determine the fair market value unless it is specifically provided in the Act. We have perused the following case laws as relied cited by the Ld. CIT(A), which supports the case of the Assessee:- Moral Trading & Investment Ltd. vis. DCIT (2011) 007 ITR (Trib) 0548 (Delhi) CIT vis. I.P. Chaudhari (2010) 328 ITR0007 (Del) CIT v. Lake Palace Hotels and Motels Ltd. [2010]321 ITR 165 (Raj) CIT vis. Nilofar I Singh (2009) 309 ITR 0233 (Del) Rupee Finance Vs ACIT( Mumbai ITAT) (2009) 310 ITR 403 Dev Kumar Jain vis. ITO (2009) 309 ITR 0240(Del) Commissioner of Income Taxrge Henderson and Co. Ltd. (1967) 066 ITR 0622 (SC) Commissioner of Income Tax vis. Gillianders Arbuthnot and Co. Gillanders Arbuthnot and Co. v/s. Commissioner of Income Tax (1973) 087 ITR 0407 (SC) CIT v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lding the action of the Ld. CIT(A) of deletion of the addition, as aforesaid, hence, this issue has become infructuous as such. 11. As regards the issue involved in ground no. 2 of the Cross Objection regarding the assumption of jurisdiction u/s. 153(C) (wrongly mentioned as 153A in the ground of appeal) is concerned. Ld. Counsel of the assessee has stated that certain documents belonging to the assessee were seized by the Search Party of the Department, which the assessee has already disclosed while filing the return of income for the assessment year in dispute. Therefore, no incriminating material belonging to the assessee were found during search period. Therefore, he stated that the assessment made in the case of the assessee is without jurisdiction, in view of the Hon'ble Jurisdictional High Court decision dated 28.8.2015 in the case of CIT vs. Kabul Chawla passed in ITA No. 707, 709 and 713/2014. He further stated that when no incriminating material are found relating to assessee in the course of search, then the proceedings initiated u/s. 153C is null and void and this issue has already been adjudicated and decided in favor of the assessee by the Hon'ble Jurisdictional High ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
