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TMI Blog2018 (9) TMI 1045X X X X Extracts X X X X X X X X Extracts X X X X ..... d stayed the further proceedings vide order dated 28.07.2008, which interim order was extended from time to time and is still continuing. In view of our aforesaid judgment rendered in connected ITAs as quoted above, the present writ petition is disposed of with a liberty to the asses sing authority to undertake the said reassessment proceedings now and leaving it free for the Assessee to raise the objections within the parameters of interpretation given by us vide aforesaid Judgment quoted above before the said Assessing Authority in accordance with law. - WRIT PETITION NO.6627/2008 [T-IT] - - - Dated:- 23-7-2018 - Dr. JUSTICE VINEET KOTHARI And MRS JUSTICE S SUJATHA Mr. Chythanya K K, Adv. for Petitioner. Mr. K V Aravind, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... take sometime and therefore, the allotment of shares at the face value or at a premium as the company may decide by passing appropriate resolutions may also take time and therefore, the condition imposed in clause (b) aforesaid has advisedly not prescribed the fixed time limit for the allotment of equity shares in favour of the partners of the erstwhile firm, whose business is succeeded by the Company. 18. It is not disputed before us that all the other conditions, five in number, in the said Proviso to Clause (xiii) of Section 47 except the issue raised with regard to the point of time for allotment of shares, stood satisfied in the present case, and not only all the 5 partners were allotted shares in the new company, which succeede ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utions and allotment of shares by the Board of Directors etc. as required under the provisions of the Companies Act may also be completed within a reasonable period. 21. However, the words reasonable period cannot be stretched to cover a large period like 3 to 4 years, as it happened in the present case and the apparent reason assigned by the Assessee in the present case was that the Authorized Share Capital of the company was not increased suitably to make the allotment of these shares to the partners and the consideration for their intended allotment of shares in proportion to their share capital was credited in the Shareholders Fund Account in the Books of Accounts maintained by the Company. 22. This in our opinion was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital gains tax liability by virtue of Section 47(A)(3) of the Act read with Section 47(xiii)(b) of the Act. We are of the opinion therefore that the learned Tribunal was justified in holding that the Assessee-company was liable to pay such capital gains tax liability instead of the partnership firm and to that extent the Assessing Authority as well as the First Appellate Authority viz., CIT(A) fell in error in affixing such liability on the partnership firm. 25. The provisions of Section 47A(3) of the Act are very clear in this regard and if any of the conditions laid down in Clause (a) or clause (e) of Proviso to Clause (xiii) of Section 47, are not complied with including the non-compliance with the conditions of clause (b) afore ..... X X X X Extracts X X X X X X X X Extracts X X X X
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