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TMI Blog2017 (5) TMI 914X X X X Extracts X X X X X X X X Extracts X X X X ..... sustaining addition of long term capital gains of Rs. 6,06,424/- arising on sale of shares of M/s. Dera Farmindale Private Limited made by the Assessing Officer. 1.b That the Ld. CIT(A) erred both in facts and in law while accepting the value of shares adopted by the Assessing Officer of M/s. Dera Farmindale Pvt. Ltd. of Rs. 393.76/- as against the agreed sale price of Rs. 270/- per share. That the Ld. CIT(A) erred both in facts and in law while sustaining the adhoc disallowance of Rs. 52,312/- @ 20% made on estimate basis out of Repairs, Telephone expenses and depreciation on Car. That the appellant craves the leave to add, alter, amend or withdraw all or any ground of appeal either before or at the time of hearing of the appeal." 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs, at a sale consideration of Rs. 13,23,000/- having rate of Rs. 270 per share. This company was not listed on any stock exchange. The assessee contested that the sale consideration received was higher than the fair market value of the equity shares sold. The assessee submitted the computation of Rs. 270/- per share received as sale consideration as under: Sale Price of 4900 Equity Shares @ Rs. 270 per shares Rs Rs.13,23,000 Calculation of F.M.V. of shares of Dera Farmindale (P) Ltd. Particulars Book Value (Rs.) Fair Market Value (Rs.) Cost of Agriculture Land at Rajgarh 4,98,400 8,50,000 Building under construction 9,38,245 Mutual Fund 16,00,000 8,50,000 Bank Balance 3,15,000 3,15,000 &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n for sale of 4900 shares. 3.3 The Ld. CIT-A observed that the boundary walls did not cease to have any value in short period of five years. He further observed that the assessee did not file any evidence in support of its arguments. In view of the observations, of the Ld. CIT-A upheld the finding of the Assessing Officer. 4. Before us, the Ld. counsel of the assessee submitted that according to the provisions of capital gains during relevant period, for computing capital gain on transfer of shares, the cost of acquisition of shares and expenditure incurred in connection with transfer of such shares, was required to be deducted from the full value consideration received or accrued as a result of transfer of such shares. The Ld. counsel su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oint of computation of the capital gain is the "full value of consideration" received or accruing. The expression cannot be understood to mean a notional consideration or a consideration, which has not actually been received or accrued to the assessee. To replace the full value consideration with the fair market value, the Act has been amended by finance Act 2017 w.e.f. 01/04/2018 by introducing section 50CA of the Act, which reads as under: "Special provision for full value of consideration for transfer of share other than quoted share. 50CA. Where the consideration received or accruing as a result of the transfer by an assessee of a capital asset, being share of a company other than a quoted share, is less than the fair market value of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on "full value of the consideration" cannot be construed as the market-value but as the price bargained" for by the parties to the sale. The dictionary meaning of the word "full" is "whole or entire, or complete" (Shorter Oxford English Dictionary). The word "full" has been used in this section in contrast to "a part of the price". Consequently, the words "lull price" mean "the whole price". Clause (2) of section 12B itself clearly suggests that if no deductions are, made as 'mentioned in sub-clause '(ii) thereof, then that amount represents the full value of the consideration, or the full price. In other words, when deductions are made as specified in sub-clauses(i) and (ii), then that amount does not represent the full value. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turn of income for computing the capital gain, cannot be replaced by the fair market value of shares computed by the Assessing Officer. As a result, we set aside the order of the Ld. CIT-A on the issue in dispute and direct the Assessing Officer to re-compute the capital gain on the basis of sale consideration declared by the assessee in the return of income. The ground of appeal is accordingly allowed. 10. In ground No. 2, the assessee has challenged disallowance of Rs. 52,312/- @20% made on estimate basis out of repairs, telephone expenses and depreciation on car etc. 10.1 The Ld. counsel of the assessee submitted that disallowance made on ad-hoc basis need to be deleted. 10.2 On the other hand, the Ld. Senior DR submitted that the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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