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TMI Blog2010 (12) TMI 1185X X X X Extracts X X X X X X X X Extracts X X X X ..... nd argumentative in nature. The revenue has taken verbatim the same grounds of appeal in both the appeals. Thus, the solitary common grievance of the revenue is that ld. CIT (A) has erred in allowing the benefit of long-term capital loss at ₹ 1,04,45,051/- instead of ₹ 23,45,051/- allowed by the Assessing Officer in the case of each assessee. 2. The brief facts of the case are that the respondents Shri Aditya Gupta and Shri Ashish Gupta are sons of Shri J.K. Gupta. They have filed their return of income on 31.10.2002. Their return was processed u/s 143 (1) of the Act. Both the assessees have purchased 15000 shares each of Mankind Pharma (P) Ltd. on 31st March, 2000 @ ₹ 750 per share. Thus, the cost of acquisition to eac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... They apprised Ld. CIT (A) about the restrictions put under the Companies Act, 1956 for transfer of shares in respect of a private limited company. According to the assessees, it is in the discretion of the managing directors to decline any transfer for the registration of shares if the transfer involves a contravention of Clause (iii) of sub-section (1) of Section 3 of the Companies Act, 1956. The assessees on the strength of Section 48 have further apprised Ld. CIT (A) as to how long-term capital gain/loss is to be computed. They have explained the expression full value of the consideration provided in Section 48 and how this expression has been construed or interpreted in various authoritative pronouncements by the Hon ble Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . CIT (A) has adjudicated the issue. This paragraph is similarly worded in both the orders. For the facility of reference, we are reproducing the finding of Ld. CIT (A) from the order passed in the case of Shri Aditya Gupta which reads as under:- 4.4 I have gone through the facts of the case and submissions of the appellant. The A.O. though has made a note that the transfer was incurred through collusive transaction, nothing has been brought on record at all to substantiate the same. It is an admitted fact that the appellant is no way related to the company M/s Mankind Pharma Pvt. Ltd and its directors. Considering the material on record and its legal aspect, I allow the benefit of Long-Term Capital Loss of ₹ 10,445,051/- to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of George Henderson Co. Ltd. (supra) and submitted that the Assessing Officer has no jurisdiction to replace the full value of the consideration disclosed by an assessee with the fair value of the capital asset transferred. The Assessing Officer has adopted the fair value of the shares which is equivalent to the book value in the books of the Mankind Pharma (P) Ltd. The Assessing Officer has not referred any material exhibiting the fact that assessees have received something more than that disclosed by them. He also relied upon the decision of ITAT in the case of Reliance Communications Infrastructure Ltd. vs. CIT reported in 34 SOT 241 (Mum). He pointed out that in this case also the Tribunal has explained the concept of full value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing. In response to the query of the Assessing Officer, they have not disclosed that something. However, when the Assessing Officer made a reference about the non-establishment of the reason for making such investment, then, they have disclosed their motive for making the investment. This disclosure was in the submissions filed before the CIT (A) (extracted supra). The learned First Appellate Authority failed to take cognizance of this explanation or any other explanation in the impugned orders. The Ld. First Appellate Authority has reproduced the submissions made by the respondents and, thereafter, recorded his conclusion in five lines without assigning any reason. The order of Ld. CIT (A) is based on surmises and is a non-speaking one. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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