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TMI Blog2020 (10) TMI 411X X X X Extracts X X X X X X X X Extracts X X X X ..... he case and in law, the Ld. CIT(A) has erred granting relief to the assessee with regard to transfer of 3,50,000/- shares overlooking the fact that definition of transfer in section 2(47) is an inclusive definition and the AO had correctly formed an opinion regarding transfer of shares after detailed enquiries. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in granting relief to the assessee with regard to transfer of 1,50,000/- shares relying on the fact that the group companies had disclosed sale consideration and offered for taxation without appreciating the fact that the assessee company is also liable for payment of taxes on such transfer as it amounts to sale and resale. 4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in granting relief to the assessee with regard to transfer of 1,50,000/- shares overlooking the fact that the AO had correctly formed an opinion transfer of shares after detailed enquires. 5. For, these and other grounds that may be urged at the time of hearing, the decision of the Ld. CIT(A) may be set aside and that of the AO restored. 3. Briefly stated, the facts o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epted the contention of the assessee and deleted the addition of Rs. 35,23,75,000/- in respect of 3,50,000 shares ; in respect of 1,50,000 shares, the Ld. CIT(A) confirmed the addition made by the AO treating the same as a sale consideration. Against the order of the Ld. CIT(A), the assessee filed an appeal before the Tribunal on the issue of 1,50,000 shares whereas the Revenue filed an appeal on deletion of 3,50,000 shares. Before the Tribunal, the assessee filed an additional evidence in the form of confirmation letter dated 20.04.2004 from CCL. The Tribunal vide order dated 30.06.2009 held as under : "30. At the time of hearing before us, the assessee has moved an application U/R 29 of the ITAT Rules, 1963 seeking admission of the additional evidence in the form of letter dtd. 20.04.2004 issued by CCL confirming the transactions involving giving of 5 lacs shares by the assessee company of GTL on loan and adjustment of 1,50,000 shares out of the same against sale made by two group companies. As stated in the said application, the assessee company was neither informed by the A.O. about the non-service of summons on CCL nor was it specifically called upon by him to file the lates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and after verifying the submissions made on behalf of the assessee as narrated above. Needless to observe that the A.O. shall afford proper and sufficient opportunity to the assessee of being heard. The appeal of the Revenue on Ground No. 2 and the appeal of the assessee are accordingly treated as allowed for statistical purposes." In the order u/s 143(3) r.w.s. 254 of the Act dated 24.12.2010, the AO restricted the addition of Rs. 47,31,25,000/- in the following manner : Amount (Rs.) Total Income as per order dated 11.03.2005 77,94,93,430/- Add: Long Term Capital Gains on sale of 500000 shares of GTL lent to Classic 47,31,25,000/- Less: Long Term Capital Gains upheld by CIT(A) 12,07,50,000/- 35,23,75,000/- Revised Total income 113,18,68,430/- 4. Aggrieved by the order of the AO, the assessee filed an appeal before the Ld. CIT(A). We find that vide order dated 01.03.2013, the Ld. CIT(A) observed that (i) the AO's action in his order u/s 254 dated 24.10.2012 to restore the addition made in the original assessment order is based on contradictions in his findings at para 10 where he says that C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mat account of GCL and Leesha before the AO. Thus it is stated by him that the order passed by the Ld. CIT(A) be set aside and the one passed by the AO be restored. 6. On the other hand, the Ld. counsel for the assessee submits that in the second round of assessment, the assessee had filed before the AO the details as per letter dated 28.06.2010 along with copies of broker notes (N.H. Securities) and Demat Statement. Relying on those documents, it is stated by him that (i) the assessee had advanced 5,00,000 shares of GTL by way of loan vide letter dated 19.10.2000, (ii) shares sold by GCC and Leesha have been shown as income in their respective assessment, which has been accepted and therefore, assessing the capital gain in the hands of the assessee and in the hands of the other two concerns will lead to double taxation, (iii) 1,50,000 shares are with the assessee ; hence, cannot be assessed as capital gains, (iv) remaining 3,50,000 shares which were lent to CCL were never received back, nor any consideration was received. Relying on the decision in the case of CIT v. Mrs. Hemal Raju Shete (2016) 239 Taxman 176 (Bom) (HC), it is argued that capital gain can be assessed only if co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also shown long term capital gain of Rs. 42.39 lakhs arising out of the sale of 75,000 shares of a company Unisol to RKHS in terms of agreement dated 25-1-2006. The Assessing Officer on perusal of above agreement was of the view that under the agreement, the respondentassessee as well as other co-owners of Unisol were to receive in aggregate a sum of Rs. 20 crores and proceeded to tax entire amount of Rs. 20 crores in the subject assessment year in the hands of all co-owners of shares.This resulted in the respondent-assessee being taxed on her share of capital gains at Rs. 4.48 crores after availing exemption under section 54EC. In the result the Assessing Officer by order dated 30-12- 2008 assessed the respondent to an income of Rs. 4.60 crores. On appeal, the Commissioner (Appeals) deleted the addition of Rs. 4.48 crores made by the Assessing Officer on the ground that it is notional. On further appeal, the Tribunal upheld the findings of the Commissioner (Appeals) inter alia holding that as there is no certainty of receiving any amount as deferred consideration, the bringing to tax the maximum amount of Rs. 20 crores provided as a cap on the consideration in the agreement dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout the actual receipt of the same. If the assessee acquires a right to receive the income, the income can be said to have accrued to him though it may be received later on its being ascertained. The basic conception is that he must have acquired a right to receive the income. There must be a debt owed to him by somebody. There must be as is otherwise expressed debitum in presenti, solvendum in futuro .... .... ....'. In this case all the coowners of the shares of M/s. Unisol have no right in the subject assessment year to receive Rs. 20 crores but that is the maximum which could be received by them. This amount which could be received as deferred consideration is dependent/contingent upon certain uncertain events, therefore, it cannot be said to have accrued to the respondent-assessee. The Tribunal in the impugned order has correctly held that what has to be taxed is the amount received or accrued and not any notional or hypothetical income. As observed by the Apex Court in CIT v. Shoorji Vallabhdas & Co. [1962] 46 ITR 144 'Income-tax is a levy on income. No doubt, the Income-tax Act takes into account two points of time at which liability to tax is attracted, viz., the accrual ..... X X X X Extracts X X X X X X X X Extracts X X X X
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