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TMI Blog2016 (12) TMI 1481X X X X Extracts X X X X X X X X Extracts X X X X ..... as transferee. After completion of all the formalities both the parties approached the escrow agent to finally transfer the shares as all the formalities were completed and consequently all the equity shares were transferred in the names of transferee on 31.12.2009. We are in agreement with the finding of facts recorded by the ld.CIT(A) as has been reproduced above that the shares were transferred on 31.12.2009 and therefore the investment was made within a period of six months from the date of transfer on 29.6.2010. We therefore inclined to uphold the order of ld. CIT(A) by dismissing the appeal of the revenue. - Decided in favour of assessee - I.T.A. No. 207/Mum/2015 - - - Dated:- 22-12-2016 - Shri Mahavir Singh, JM And Shri Rajesh Ku ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich he earned Long term capital gains of ₹ 4,20,39,770/-. The assessee thereafter subscribed to 500 bonds of ₹ 10,000/- each of REC Ltd on 29.6.2010. During the course of assessment proceedings the assessee submitted various documents and information before the AO including the agreements dated 29.7.2009, 30.7.2009, 31.7.2009 and 31.12.2009 which related to transfer of shares of M/s WWIL Private Limited to M/s Den Network Ltd. The AO noted that the first agreement dated 29.7.2009 which was revised by entering into subsequent agreements and shares were finally transferred in terms of agreement dated 31.12.2009. However, according to the AO the transfer of shares took place on 29.7.2009 and investment made under section 54EC 29.6. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfer of shares from one company to another company that a period is allowed to carry out due diligence so that the transferee could satisfy itself qua various legal /other formalities that have to be complied with by the transferee during the intervening period and during that period shares to be transferred and consideration for transfer were to be placed with the escrow agent and it is only after fulfilling all these conditions the shares were finally transferred to the transferee. The AO did not agree with the contention of the assessee and accordingly rejected the claim of the assessee made under section 54EC vide assessment framed u/s 143(3) vide order dated 7.3.2013 at ₹ 6,33,02,550/-. Aggrieved by the order of the AO, the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly effected.' In view of the said facts, I am in agreement with the appellant that principal agreement dated 29/07/2009 was an agreement to transfer and not the deed of transfer per se. Therefore, in the instant case, capital gain arises on the effective date of transfer i.e 31st of December, 2009 and since the appellant has already deposited an amount in eligible security within six months there from, he is entitled to claim exemption u/s 54EC of the Income-tax Act, 1961. The A.O is, therefore, directed to allow exemption u/s 54EC amounting to ₹ 50 Lac being a sum deposited by appellant in eligible security 4. The ld. DR submitted before us that the order passed by the ld. CIT(A) is incorrect as the ld.CIT(A) failed to appre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of the assessee due diligence was carried out and the shares were finally registered on 31.12.2009 and accordingly, recorded in the books of account of the assessee. The ld. AR finally submitted that in view of these facts, the assessee has rightly invested in the bonds of REC Ltd and claimed exemption of ₹ 50 lakhs which should be allowed to the assessee by upholding the order of FAA. 6. We have carefully considered the rival contentions and perused the material placed before us including the orders of authorities below. We find that the shares were registered in the name of the transferee on 31.12.2009 and accordingly recorded in the books of account of the transferor. The said shares after complying with the formali ..... X X X X Extracts X X X X X X X X Extracts X X X X
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