9911796707
TMI Blog2007 (10) TMI 293X X X X Extracts X X X X X X X X Extracts X X X X ..... on March 26, 1998. Accordingly an intimation was sent to the assessee. Later on, January 17, 1998, the assessee filed a revised return declaring a loss of Rs. 92,19,086. The same was processed on March 31, 1998. The case was taken up for scrutiny by issuing a notice under section 143(3) of the Income-tax Act. Accordingly, after discussion, accounts were verified. The assessee is an investment and trading company dealing in purchase and sale of investments. During the relevant year, the assessee claims to have sold 5,40,159 shares of M/s. ICDS Limited at the rate of Rs. 220 per share for consideration of Rs. 11,88,34,980 and taking into account the cost of shares, the surplus realised by the assessee was to the extent of Rs. 3,62,25,964. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals) in Appeal No. 35/Bang/CIT(A)-V/99-2000. The Appellate Commissioner, after hearing the parties, confirmed the order passed by the Assessing Officer. Being aggrieved by the concurrent findings of the order of assessment and the order passed by the Appellate Commissioner, an appeal was filed by the assessee before the Income-tax Appellate Tribunal, Bangalore Bench, in I. T. A. No. 750/Bang/1999. The Income-tax Appellate Tribunal considering the submissions made by both the parties, placing reliance on the judgments of the Madras High Court reported in CIT v. AL. Ramanathan [2000] 245 ITR 494 and in the case of CIT v. R. Ponnammal [2000] 164 ITR 706 held that though the assessee being a private limited company has sold the shares to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a private limited company which has sold the shares held by it in respect of M/s. ICDS Limited and M/s. Manipal Finance Corporation Limited for consideration of Rs. 3,37,49,633 to different persons (members of the Pai group of Manipal) would attract the capital gains tax. According to him, when it is shown as a transfer for consideration, automatically the respondent-assessee being a legal entity is liable to pay the capital gains tax and that the Tribunal did not consider the judgment of the hon'ble Supreme Court in Calcutta Tramways Co. Ltd. v. CWT [1972] 86 ITR 133. According to him, the shares held by the respondent-assessee were the assets of the company and they were not the assets of the shareholders. According to him, only after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... similar to each other and, therefore, the appeal filed by the Revenue has to be dismissed. 6. According to Mr. Sarangan, when the Assessing Officer has not disputed the facts involved in this case and when the shareholders of the assessee are the members of the Pai group of Manipal and when there was a serious dispute among the members of the joint family for the properties of their joint family and when there was no fraud or coercion in bringing out the arbitration award, it was for the Assessing Officer to accept the contentions raised by the assessee in order to come to the conclusion that it was only a family arrangement and not actually a sale. Therefore, he requests the court to dismiss the appeal. 7. Having heard the learned counse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by relying upon the judgments of the Madras High court in AL. Ramanathan [2000] 245 ITR 494 and R. Ponnammal [1987] 164 ITR 706. Since the respondent being a legal entity, even though shareholders are the members of the joint family, they have no individual right to exercise powers on the assets of the respondent assessee-company without invoking the provisions of the Companies Act. 9. In the circumstances, we have to answer the substantial questions in favour of the Revenue and the appeal has to be allowed. 10. At this stage, it is brought to our notice by Mr. Sarangan that the Tribunal did not consider another question that was raised by the assessee, namely, that it was not liable to pay the capital gains tax since no consideration was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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