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TMI Blog2023 (5) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... n (Civil) no.3 of 2020, the learned DR submitted that the limitation period for filing the appeal was extended upto 29/05/2022, and the Revenue filed the present appeal on 27/05/2022. Thus it was prayed that the present appeal be heard on merits. The learned Authorised Representative ("learned AR") did not raise any objection against the prayer for condonation of delay. In view of the above, since the present appeal has been filed within the extended time granted by the Hon'ble Supreme Court during the Covid period, therefore there is no delay in filing the present appeal and we proceed to decide the same on merits. 3. In its appeal, the Revenue has raised the following grounds:- "(1) On the face and in the circumstances of the case and in law, the learned CIT(A) erred in directing to compute the capital gains considering Rs. 25,00,000 as total consideration received for sale of equity shares of Shivalik Land Development Limited to Virasat Agro Foods Private Limited as against Rs. 10,00,00,000 shown by the assessee in its return of come. (2) On the facts and in the circumstances of the care and in law, the learned CIT(A) erred in holding that the re-negotiated sales considera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sideration has been reduced from Rs. 10 crore to Rs. 25 lakh and decide this issue de novo. 6. Pursuant to the directions of the Tribunal, the AO vide order dated 27/12/2018 passed under section 143(3) r/w section 254 of the Act did not agree with the submissions of the assessee that the sale consideration of shares of the subsidiary company has been reduced from Rs.10 crore to Rs.25 lakh, by observing as under:- "13 The submission of the assessee has been considered but not found to be tenable. As per section 48 of the Income Tax Act, the capital gain is to be computed having regard to the full value of consideration accruing to the assessee at the time of transfer of shares. Undisputedly, the consideration accruing at the time of transfer was Rs.10 crores which was thereafter reduced only to the extent of Rs.25 lakhs. A mere post facto event cannot result in reduction of full value of consideration. Further, the assessee has not been able to explain as to why the sum of Rs. 10 crores initially agreed upon by the assessee and the purchaser was reduced to a paltry sum of Rs. 25 lakhs. Thus, it seems that there is no commercial substance in the Act of executing a supplementary Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is nothing but a bonus to the assessee, since the title of the land, kept as a mortgage for part unpaid sale consideration, was found to be not clear and covered by the injunction order passed by the Hon'ble Debt Recovery Tribunal. As regards the loan of Rs.30 crore given by the assessee, the learned AR submitted that the same was returned substantially by Shivalik Land Development Ltd. on 08/12/2008, to the assessee. 10. We have considered the rival submissions and perused the material available on record. In the present case, on 28/07/2006, the assessee acquired 50,000 shares of Rs.10 each, being 100% share capital of Shivalik Land Development Ltd. M/s Padmini Technologies Ltd was the owner of land admeasuring 11.42 acres situated in the revenue estate of village Kherki Daula, Distt Gurgaon. M/s Padmini Technologies Ltd approached the assessee for obtaining financial help to obtain a commercial license from the DTCP, Haryana in respect of the said land. Accordingly, the assessee through its wholly-owned subsidiary, i.e. Shivalik Land Development Ltd, had entered into Development Agreement dated 01/03/2007, with M/s Padmini Technologies Ltd. The assessee gave a loan of Rs.30 cror ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of Rs.9.75 crore by M/s Virasat Agro Foods Private Limited in terms of the aforesaid Share Purchase Agreement. It was also agreed that in the event of failure of M/s Virasat Agro Foods Private Limited to pay the balance consideration in terms of the Share Purchase Agreement for any reason whatsoever, the assessee will become entitled to have the mortgaged land sold in the manner, as it may deem fit. 12. Subsequently, it came to the knowledge of M/s Virasat Agro Foods Private Limited that the title of the aforesaid land was not clear and several litigations were going against M/s Padmini Technologies Ltd. Further, M/s Padmini Technologies Ltd had also taken several loans from the Bank of India and for default on such loans, the Bank of India filed a recovery suit before the Hon'ble Debt Recovery Tribunal. The Hon'ble Debt Recovery Tribunal vide order dated 12/10/1999, granted an injunction against M/s Padmini Technologies Ltd. and restrain the property in question from transferring, eliminating, or otherwise dealing with until further orders, which order continues to be in the operation. Pursuant to the aforesaid information, M/s Virasat Agro Foods Private Limited filed a sui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al title deed of the scheduled land to M/s Virasat Agro Foods Private Limited and cancel the Mortgage Deed dated 12/12/2008, by executing the date of discharge, release, and cancellation of the mortgage. Pursuant thereto, the parties entered into the Supplementary Share Purchase Agreement, whereby the sale consideration for shares of Shivalik Land Development Ltd. was revised to Rs.25 lakh from Rs.10 crore. 16. As per the assessee, due to the aforesaid circumstances, it raised additional ground before the learned CIT(A), in 1st round of proceedings, for the computation of the capital gains on the sale of shares by considering the sale consideration of Rs.25 lakh instead of Rs.10 crore. As evident from the record, the learned CIT(A) rejected the request of the assessee to admit the aforesaid additional ground. However, the coordinate bench of the Tribunal vide order dated 28/08/2017, set aside the matter to the file of the AO for de novo adjudication after verifying the genuineness of the claim of the assessee. As evident from the record, the assessee filed the copy of Share Purchase Agreement, copy of the Mortgage Deed, copy of the Settlement Deed before the AO, during the 2nd rou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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