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TMI Blog2023 (2) TMI 175X X X X Extracts X X X X X X X X Extracts X X X X ..... ale of their shares. It is also not in dispute that the Company had written to the KIADB and the KIADB had permitted transfer of shares. The principal argument advanced on behalf of the Revenue is, as back as on July 29, 2009, Shri. G. Somashekar Reddy has executed a Lease Deed in favour of M/s. KPIT Cummins and thus, he was functioning as the owner of the Company. Though this argument is attractive, it is relevant to note that transfer of shares shall happen only in accordance with Section 108 of Companies Act. So far as the lease agreement in favour of KPIT Cummins, we may record that the lessor is the Company namely M/s. Shailendra Techno Park Pvt. Ltd., and Shri. G. Somashekara Reddy is only described as a Director of the said Company. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 013? 2. Whether the transfer of capital assets [shares] held by Transferor took place in the present case in the year relevant to A.Y. 2008-09 or in the subsequent year of 2013 and whether the Tribunal was justified in reversing the orders passed by the Assessing Authority as well as the First Appellate Authority, in the facts and circumstances of the case? 2. Heard Shri. K.V.Aravind, learned Senior Standing Counsel for the Revenue and Shri. S. Parthasarathi, learned Advocate for the assessee. 3. Brief facts of the case are, respondent-assessees were share holders in M/s. Shailendra Techno Park Ltd., ('STPL' for short) holding 50% shares each. They entered into an MoU [Memorandum of Understanding] dated June 16, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Directors had decided to relinquish and transfer the management to the new entrepreneur Shri. Somashekara Reddy and Smt. G. Vijaya, who had offered to take over the Company. The Board had resolved to transfer 100% equity shares in their favour and requested for permission to transfer the shares. By its letter dated 06.07.2007, the KIADB accorded permission to transfer the shares. On 16.08.2007, KIADB entered into a Supplementary Agreement with the Company represented by Shri. G. Somashekara Reddy and Smt. G. Vijaya; On July 29, 2009, the Company represented by Shri. G. Somashekara Reddy has executed a lease deed in favour of M/s. KPIT Cummins Global Business Solutions Ltd. 7. In substance, Shri. Aravind argued that with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... address and occupation, if any, of the transferee, has been delivered to the company along with the certificate relating to the shares or debentures, or if no such certificate is in existence, along with the letter or allotment of the shares or debentures (Emphasis Supplied) 11. It is also settled that transfer of shares shall take place only after registration by the Registrars of the Company. (See. Mannalal Khetan v. Kedar Nath Khetan.[(1977) 2 SCC 424, para 16.] LIC v. Escorts Ltd.[ (1986) 1 SCC 264, para 84.]) 12. In Vasudev Ram Chandra Shelat Vs. Pranlal Jayanand Thakar and Others [(1974) 2 SCC 323.], it is held as follows: 13. The Companies Act of 1913 was meant to consolidate and amend the law relating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regulations contained in Table A of the 1st Schedule of the Companies Act apply. (Emphasis Supplied) 13. It is not in dispute that assessees have received Rs.35 Crores as advance sale consideration towards sale of their shares. It is also not in dispute that the Company had written to the KIADB and the KIADB had permitted transfer of shares. The principal argument advanced on behalf of the Revenue is, as back as on July 29, 2009, Shri. G. Somashekar Reddy has executed a Lease Deed in favour of M/s. KPIT Cummins and thus, he was functioning as the owner of the Company. Though this argument is attractive, it is relevant to note that transfer of shares shall happen only in accordance with Section 108 of Companies Act. So far as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of the First Part as provided herein below. Sl.No Date. Cheque/DD No Amount 1. 08.06.2007 068706 90,00,000.00 2. 18.06.2007 068708/16.06.2007 2,10,00,000.00 3. 18.06.2007 044343/16.06.2007 3,00,00,000.00 4. 07.07.2007 044346/05.07.2007 2,00,00,000.00 5. 10.07.2007 068709/05.07.2007 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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