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TMI Blog2022 (7) TMI 1146X X X X Extracts X X X X X X X X Extracts X X X X ..... for the assessment year 2015-16 alone and compute capital gain from transfer and determine whether it is short term or long term depending upon period of holding of asset by the assessee. Computation of capital gain on sale of shares of M/s.Akshaya JMB Properties Pvt.Ltd - assessee has sold 41,325 shares for consideration of Rs.4,46,69,825/-. - capital gain on sale of shares - HELD THAT:- Evidences placed by the assessee clearly shows that the assessee has transferred 41,325 equity shares on three dates to different persons and different rates and also received consideration through cheque. The evidences filed by the assessee further strengthened fact that entire consideration has been received through cheque and purchasers have confirmed transactions. The parties have entered into MoU to set out terms conditions of sale of shares, but nowhere specified manner in which share price is to be determined. Therefore, we are of the considered view that the Assessing Officer has completely erred in replacing full value of consideration of Rs.13,63,10,512/- as against actual consideration received by the assessee at Rs.4,46,69,825/- and computed long term capital gain and hence, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on for only one flat - HELD THAT:- As assessee pleaded for one more opportunity of being heard before the Assessing Officer to justify her case to verify eligibility of the assessee for claim of exemption u/s.54 54F. Therefore, we are of the considered view that the issue needs to go back to the file of the Assessing Officer for further examination of claim of the assessee. Hence, we set aside the issue to file of the Assessing Officer and direct the A.O. to reexamine claim of the assessee in accordance with law and decide the issue. - I.T.A.No.841/Chny/2019 - - - Dated:- 20-7-2022 - Shri V. Durga Rao, Judicial Member And Shri G. Manjunatha, Accountant Member For the Appellant : Mr. R.Venkata Raman, C.A For the Respondent : Mr. Guru Bashyam, CIT ORDER PER G. MANJUNATHA, AM: This appeal filed by the assessee is directed against order of the learned Commissioner of Income Tax (Appeals)-12, Chennai, dated 28.01.2019 and pertains to assessment year 2015-16. 2. The assessee has raised following grounds of appeal:- Conversion of limited scrutiny to complete scrutiny 1. For that the Ld.CIT(A) is not justified in upholding the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to have appreciated that there is no provision in the Income Tax Act to enable the Assessing Officer to substitute the full value of consideration arising from the sale of unquoted shares with any other value other than the actual consideration received. 11. For that without prejudice to Ground Numbers 8, 9 and 10, the Ld.CIT(A) failed to appreciate that even going on the basis of the latest value as stated in the assessment order, the value can at best be Rs.419.40 per share as against Rs.3298.50 per share taken by the Assessing Officer. 12. For that the Ld.CIT(A) failed to appreciate that the Assessing Officer in computing long term capital gains, has erred in computing the cost of acquisition at Rs.10/- per share as against the actual cost of Rs.53.87/- per share. Addition uls.56(2)(vii)(b)(ii) 13. For that the Ld.CIT(A) erred in confirming the action of the Assessing Officer in making an addition of Rs.40,50,100/- u/s.56(2)(vii)(b)(ii). 14. For that the Ld.CIT(A) failed to appreciate that in the facts and circumstances of the case, the value adopted or assessed for stamp duty purposes exceeds the fair market value of the property as on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rchased in Metropolis. During the year under consideration, the assessee had also sold 41,325 shares held by her in M/s.Akshaya JMB Properties Pvt.Ltd. for consideration of Rs.4,46,69,825/- and sale consideration was invested in one residential house by virtue of which exemption u/s.54F of the Act was claimed. During the course of assessment proceedings, the Assessing Officer noticed that the assessee has declared capital gain from sale of flats till date for the year under consideration on the ground that possession of constructed flats was handed over by the builder only during financial year relevant to the assessment year 2015-16. Therefore, the Assessing Officer opined that since capital asset sold by the assessee was held for less than specified period, the assessee is not entitled for indexed cost of acquisition and thus, re-computed long term capital gains by taking into account sale consideration of Rs.4,89,35,461/- and allowed cost of acquisition without indexation @ 750/- per sq. on total constructed area sold for whole period, including previous financial years and determined short term capital gain of Rs.3,64,32,706/-. 4. The learned A.R for the assessee submitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arth Finance Housing Ltd. on 19.08.2011 and admitted capital gain on transfer of 73% undivided share of the land in exchange of 27% built up area for the assessment year 2012-13. It is also an admitted fact that the assessee had declared capital gain on transfer of 27% built up area for the assessment year 2015-16, even though, sale of flats took place right from assessment year 2012-13 to 2015-16. The Assessing Officer claims that the assessee herself has offered capital gain on total consideration received for sale of built up area aggregating 16,670.34 sq.ft. for the assessment year 2015-16 on the ground that final payments have been received for the impugned assessment year and further, possession of the building was handed over by the builder for the impugned assessment year. Except this, the Assessing Officer has never disputed fact that the assessee has sold flats right from the assessment year 2012-13 upto 2015-16. In fact, the assessee has filed details of sales made in each assessment year, as per which majority of flats have been sold upto assessment year 2014-15. Further, for the assessment year 2015-16, the assessee has sold 1835 sq.ft of super built up area for Rs.6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es was sold for consideration of Rs.59,37,234/- and rate works out to Rs.3,298.5 per share. The third tranche of remaining 12,675 shares has been sold for consideration of Rs.53,15,464/- and rate works out to Rs.419.4 per share. The Assessing Officer, after considering relevant facts and also taken note of various clauses in MoU opined that agreement between parties is tool for avoidance of payment of taxes and thus, adopted Rs. 3298.50 per equity share as consideration received for transfer of 41,325 shares and determined total sale consideration of Rs.13,63,10,512/- and computed long term capital gain of Rs.13,54,59,060/-, after allowing cost of acquisition. 8. The learned A.R. for the assessee submitted that the Assessing Officer as well as the learned CIT(A) erred in considering full value of consideration for transfer of unquoted equity shares by replacing actual consideration received by the assessee for transfer of shares, without appreciating fact that there is no provision in the Income Tax Act to substitute full value of consideration arising from sale of unquoted shares with any value except actual consideration received. The learned A.R. further referring to provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ond tranche of 13,475 equity shares has been transferred @ Rs.1,797 per equity share on 13.11.2014 and received consideration of Rs.2,42,14,575/- and said consideration is received through bank. The assessee has transferred final tranche of 1000 shares@ Rs.2,063 per share on 31.03.2015 and received consideration of Rs.20,63,000/- through bank. These facts are not disputed by the Assessing Officer. However, the Assessing Officer has determined full value of consideration received for transfer of shares on the basis of MoU dated 10.05.2014 and worked out different rates of transfer by wrongly interpreting terms conditions of MoU on the ground that MoU between the parties is tax avoidance arrangement. 11. We have gone through MoU between the assessee and shareholders dated 10.05.2014 and we find that MoU does not deal with valuation of equity shares of M/s.Akshaya JMB Properties Pvt.Ltd., but it only deals with modalities and rights of respective parties and what is existing shareholders should do with dividends. Therefore, we are of the considered view that share price arrived at by the Assessing Officer @ Rs.3298.50 per share is erroneous, which is not based on any evidences to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd, evidences placed by the assessee clearly shows that the assessee has transferred 41,325 equity shares on three dates to different persons and different rates and also received consideration through cheque. The evidences filed by the assessee further strengthened fact that entire consideration has been received through cheque and purchasers have confirmed transactions. The parties have entered into MoU to set out terms conditions of sale of shares, but nowhere specified manner in which share price is to be determined. Therefore, we are of the considered view that the Assessing Officer has completely erred in replacing full value of consideration of Rs.13,63,10,512/- as against actual consideration received by the assessee at Rs.4,46,69,825/- and computed long term capital gain and hence, we direct the Assessing Officer to adopt consideration as received by the assessee for transfer of 41,325 equity shares of M/s.Akshaya JMB Properties Pvt.Ltd. for consideration of Rs.,4,46,69,825/- and compute long term capital gain in accordance with law. 12. The next issue that came up for our consideration from ground of the assessee is cost of acquisition of equity shares of M/s.Akshaya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer, the assessee has registered 440 sq.ft of UDS for consideration of Rs.3,30,000/-, whereas guideline value of 440 sq.ft was at Rs.6,60,000/-. The Assessing Officer further noted the assessee has registered UDS @ Rs.750/- per sq.ft and guideline value was at Rs.1,500/- per sq.ft and thus, difference amount has been added u/s.50C of the Income Tax Act, 1961. 16. We have heard both the parties and considered relevant material available on record. The learned A.R for the assessee pleaded for one more opportunity of being heard before the Assessing Officer to justify her case with reference to guideline value of the property and consideration for transfer of UDS. Hence, we set aside the issue to the file of the Assessing Officer and direct the Assessing Officer to reconsider the issue in accordance with law. 17. The next issue that came up for our consideration from ground no.19 20 of the assessee appeal is disallowance of exemption claimed u/s.54 54F of the Income Tax Act, 1961. The Assessing Officer has disallowed exemption claimed u/s.54 of the Income Tax Act, 1961, on the ground that the assessee does not qualify for exemption u/s.54 of the Income Tax Act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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