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TMI Blog2022 (1) TMI 1052X X X X Extracts X X X X X X X X Extracts X X X X ..... oing concern constitutes transfer of capital asset. The Tribunal proceeded to take note of the decision of the High Court of Bombay in the case of CIT Vs. Bharat Bijlee Limited, [ 2014 (5) TMI 512 - BOMBAY HIGH COURT] and granted relief to the assessee by observing that two specified hotels of the assessee were transferred to EIH Associated Limited for consideration to be settled by issuance of preference shares and debentures were a transfer of capital by way of exchange and, therefore, the provisions of Section 50B of the Act cannot be made applicable to the facts of the case on hand. We find that the finding recorded by the Tribunal to be perfectly right. In fact, the Tribunal rightly took note of the decision in the case of R.R. Ram ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the Learned Tribunal erred in law in deciding the appeal in favour of the assessee that surplus amount of ₹ 31,33,05,072/- is covered an exchange under section 2(47) of the Income Tax Act as against long term capital gains under section 50B and section 2(42C) of the Income Tax Act? (ii) Whether on the facts and in the circumstances of the case, the Learned Tribunal erred in law in deleting the disallowance of ₹ 2,84,00,909/- being 60% of the aggregate expenditure incurred on running and maintenance of aircrafts without considering that the aircrafts were also used for personal purpose of the directors? (iii) Whether on the facts and in the circumstances of the case, the Learned Tribunal erred in law in deleting the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, the Learned Tribunal erred in law in deleting the disallowance of expenditure in respect of earning dividend income tax free interest on US 64 tax free bonds without appreciating the finding of the assessing officer who disallowed 0.5% of average investment by applying rule 8D of income tax rules and made disallowance of expenses under section 14A? (viii) Whether on the facts and in the circumstances of the case, the Learned Tribunal erred in law in deleting the addition on account of interest amounting to ₹ 3,80,69,705/- being 12% of interest free advances given to subsidiary companies for non business purpose based on the presumption that those advances were made by the assessee out of its own funds and not out of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the assessee s own case for the assessment year 2008-09 in ITAT No.34 of 2020 dated 16th December, 2021. Thus, following the said decision, the said questions of law are answered against the revenue. So far as the substantial question of law no.(vi) is concerned, we find that the Tribunal has remanded the matter for a fresh decision after taking note of the decision of the Hon ble Supreme Court. Thus, we find that there is no question of law arising for consideration on the said issue and hence, the said question of law no.(vi) is rejected. So far as the substantial question of law no.(vii) is concerned, we have carefully perused the findings recorded by the Tribunal in paragraph 7.2.1 and 7.2.2 of its order. We find that after analys ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shares and debentures in EIH Associated Limited. The Tribunal took note of the argument of the assessee with regard to computation of capital gains and found that there cannot be any controversy that each of the specified hotels is an undertaking and, therefore, constituted a long term capital asset. Further, the Tribunal took note that it is not in dispute that the transfer of the business undertaking as a going concern constitutes transfer of capital asset. Reliance was placed on the decision of the Hon ble Supreme Court in the case of CIT vs. B.C. Srinivasa Setty, reported in (1981) 128 ITR 294 (SC) and on facts found that the two specified hotels which were transferred as going concerns by way of exchange of shares and debentures ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assets to a company in consideration of allotment of shares, it would be a case of exchange and not of sale, and the true nature of the transaction will not be altered, because for the purpose of stamp duty or other reasons the value of assets transferred is shown as equivalent to the face value of the shares allotted. A person carrying on business may agree with a company floated by him that the assets belonging to him shall be transferred to the company for a certain money consideration and that in satisfaction of the liability to pay that money consideration, shares of a certain face value shall be allotted to the transferor. In that case there are in truth two transactions one a transaction of sale and the other a contract under which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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