×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
These are the latest case laws decided by various Income Tax Appellate Tribunals (ITAT) of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.
04-01-2019, Durai Arun Kumar, Section 2(42A), 54F, 113, Tribunal Chennai
This is an appeal filed by the assessee directed against an order dated 31.01.2018 of Commissioner of Income Tax (Appeals)-14, Chennai.
Grounds taken by the assessee are reproduced hereunder:-
“1. For that the order of the Commissioner of Income Tax(Appeals) is contrary to law, facts and circumstances of the case to the extent prejudicial to the interests of the appellant and is opposed to the principles of natural justice, equity and fair play.
2. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the order of the Assessing Officer is without jurisdiction.
3. For that the Commissioner of Income Tax (Appeals) erred in upholding the addition of Rs.1 ,93,91 ,2691- as short term capital gains
4. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the gain on sale of 85,000 shares is taxable as long term capital gains
5. For that the Commissioner of Income Tax (Appeals) failedto appreciate that the date of allotment is the date of acquisition as per the provisions of section 2(42A)
6. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the share allotment has been made and approved in the Board meeting held on
7. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the allotment of shares has been entered in the register of members on 22.08.2011
8. For that the Commissioner of Income Tax (Appeals) erred in concluding that the shares were not held for more than 1 year based on the date mentioned in the share certificate
9. For that the Commissioner of Income Tax (Appeals) erred in upholding the proportionate disallowance of exemption claimed u/s.54F
10. For that the appellant objects to the levy of interest uls.234B.”
2. Facts apropos are that assessee had sold 2,50,000 shares of one M/s. Lipi Polymers Pvt.Ltd to one M/s.Ascent GmbH and Leister AG, both of which were foreign companies, for a total consideration of ₹5,99,00,000/-. Sale as per assessee was effected on 11.01.2013. Assessee had computed long term capital gains at ₹5,58,73,351/- on the above sale after deducting indexed cost of acquisition of ₹36,59,795/-. Assessing Officer after verifying share certificates, required the assessee to explain how some of the shares which were acquired in 2012 could be considered as long term assets. Reply of the assessee was as under:-
“This leaves us with balance 85000 shares which you have mentioned in your Notice as having been acquired on 9.8.2012. However, actually these shares were also allotted by the company on 22.8.2011, I enclose a copy of the Board meeting minutes held on 22.8.2011 wherein you will find that the subject of allotment of shares to myself as well as to other shareholder. namely Mr. Mathew Varghese, has been duly included as item No.5 of the agenda. But the actual issue of share certificate for these shares was carried only on 9.8.2012. 1 enclose copy of the Board meeting minutes dated 9.8.2012 wherein you will find that the relevant resolution far issue of shares in item No.5 of the agenda is duly included. I also enclose copies of the relevant folios, namely folio Nos. 00001 and 00002 of the Register of Members of the company wherein you will find that appropriate entries have been made about allotment of 85000 shares each having been made to the two shore holders on 22.8.2011. while the issue of share certificates was made on 9.8.2012,”