9911796707
TMI Blog2023 (5) TMI 224X X X X Extracts X X X X X X X X Extracts X X X X ..... hat arises from the transaction since the entire transaction was a buyout of shares by virtue of order of the Apex Court. The officer, in this regard refers to the statement of the Apex Court that the transaction 'does not amount to shares being transferred inter vivos, nor can the payment for the shares be treated as deemed dividend' . Thus the clear inference that the officer has arrived at, is that there can be no instance of capital gain tax nor any levy u/s 2 (22) (e) of the Act dealing with deemed dividend. On the liability to interest on the sum of Rs.18.62 Crores, it is a timing difference, and the officer prima facie believes that the interest must be taxed in AY 2019-20 relatable to the year when the order was passed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of Apex Court dated 25.02.2019, (ii) the interest received on the aforesaid amount is proposed to be offered to tax in assessment year (AY) 2023 24 only whereas it ought to have been offered in AY 2019-20 and (iii) the issues in (i) and (ii) were not put to it for response in the notice under Section 148A(b) of the Act. 3. The petitioner is a private limited company and litigation involving the petitioner and five other entities ('shareholders') had reached the Apex Court consequent upon disputes inter se the six share holders before the Company Law Board. 4. By order dated 17.05.2018, the Hon'ble Supreme Court permitted a buyout of the shares inter se the parties. The Court also records that a sum of Rs.100 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his Court, we make it clear that there will be no triggering of the SEBI Takeover Regulations. We also make it clear that this order does not amount to shares being transferred inter vivos, nor can the payment for the shares be treated as deemed dividend. On payment, the share capital of the Company shall stand reduced by virtue of our order. The observations of the High Court will not bind in any other proceedings between the parties. Mrs. Vibha Datta Makhija, learned Senior Counsel, who appears on behalf of the Intervener, states that large sums have been defalcated by the Natarajan Group, which belong to depositors. She may urge this grievance before the appropriate forum in accordance with law. With these observations, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above entities for the buy-out of all their shares in the company. Further, the Hon'ble Supreme Court vide order dated 25.02.2019 directed M/s.SV Global Mills Ltd to deposit Rs.100 cores in the registry of Hon'ble Supreme Court within a period of two weeks and registry to invest the said amount in an interest bearing short term fixed deposit. It is observed that shares had been transferred from assessee company to M/s SV Global Mills Ltd through the order of Hon'ble Supreme Court. Hence, capital gain arising out of transfer of shares requires to be taxed in the hands of the assessee company. However, it is observed from the Income Tax return filed by the assessee company for AY 2019-20 that an amount of Rs.18,62,03,348/- h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se, the consideration has been in the form of shares. It also confirms that the interest income is proposed to be offered to tax in AY 2023-24. 11. In the impugned order dated 21.03.2023, the assessing authority has rightly concluded that there is no capital gains that arises from the transaction since the entire transaction was a buyout of shares by virtue of order of the Apex Court. The officer, in this regard refers to the statement of the Apex Court that the transaction 'does not amount to shares being transferred inter vivos, nor can the payment for the shares be treated as deemed dividend' . Thus the clear inference that the officer has arrived at, is that there can be no instance of capital gain tax nor any levy under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
