RAMINDER KAUR CJAWLA, MUMBAI v. ITO 12(1)(1), MUMBAI

ITA 845/MUM/2014 | 2009-2010
Pronouncement Date: 31-07-2015 | Result: Allowed

Appeal Details

RSA Number 84519914 RSA 2014
Assessee PAN AAQPC8853K
Bench Mumbai
Appeal Number ITA 845/MUM/2014
Duration Of Justice 1 year(s) 5 month(s) 24 day(s)
Appellant RAMINDER KAUR CJAWLA, MUMBAI
Respondent ITO 12(1)(1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2015
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 31-07-2015
Assessment Year 2009-2010
Appeal Filed On 06-02-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A MUMBAI BEFORE SHRI G.S. PANNU ACCOUNTANT MEMBER AND SHRI SANJAY GARG JUDICIAL MEMBER ITA NO.845/M/2014 ASSESSMENT YEAR: 2009-10 SMT. RAMINDER KAUR CHAWLA C/O. QUALITY MACHINE TOOLS 25 AMBALAL DOSHI MARG MUMBAI-400023 PAN: AAQPC8853K VS. ITO 12(1)(1) AAYAKAR BHAVAN ROOM NO.134 M.K. MARG MUMBAI -400020 (APPELLANT) (RESPONDENT) ITA NO.846/M/2014 ASSESSMENT YEAR: 2009-10 SHRI AJIT SINGH CHAWLA C/O QUALITY MACHINE TOOLS 25 AMBALAL DOSHI MARG MUMBAI-400023 PAN: AABPC0858R VS. ITO 12(1)(4) AAYAKAR BHAVAN ROOM NO.134 M.K. MARG MUMBAI -400020 (APPELLANT) (RESPONDENT) PRESENT FOR: APPELLANT BY : SHRI JAIDEV A.R. RESPONDENT BY : SHRI RAKESH RANJAN D.R. DATE OF HEARING :20.07.2015 DATE OF PRONOUNCEMENT : 31.07.2015 O R D E R PER SANJAY GARG JUDICIAL MEMBER: THE ABOVE TITLED APPEALS HAVE BEEN FILED BY THE TW O DIFFERENT ASSESSEES AGAINST ORDERS BOTH DATED 29.11.2012 PASSED BY THE LEARNED COMMISSIONER (APPEALS)23 FOR THE ASSESSMENT YEAR 2009-10. SINC E THE FACTS AS WELL THE ISSUES INVOLVED ARE IDENTICAL IN BOTH THE APPEALS HENCE THE SAME ARE TAKEN TOGETHER FOR DISPOSAL BY THIS COMMON ORDER. FOR THE SAKE OF CONVENIENCE THE ITA NO.845/M/2014 & ITA NO.846/M/2014 SMT. RAMINDER KAUR CHAWLA & SHRI AJIT SINGH CHAWLA 2 FACTS HAVE BEEN TAKEN FROM ITA NO.846/M/2014. THE ASSESSEE HAS RAISED THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL: 1. THE LEARNED CIT(A) HAS ERRED IN FACTS AND IN LA W IN CONFIRMING THE A.OS ORDER IN NOT ACCEPTING THE APPELLANTS WORKING OF T HE LONG TERM CAPITAL GAIN ARISING ON SALE OF SHARES IN A BUY BACK TRANSACTION . 2. THE LEARNED CIT(A) HAS ERRED IN FACTS AND IN LAW IN CONFIRMING THE A.OS ORDER IN HOLDING THAT FOR THE PURPOSE OF WORKING OU T LONG TERM CAPITAL GAIN THE SALE PRICE OF EACH SHARE OF SOMA TEXTILE INDUSTRIES LTD. BEING RS. 40.14 HAD TO BE BROKEN UP INTO TWO COMPONENTS COMPRISING OF ( A) PRICE TOWARDS PURCHASE OF EACH SHARE (RS.34.45) AND (B) PAYMENT T OWARDS INTEREST (RS.5.69 PER SHARE). 3. THE LEARNED CIT(A) HAS ERRED IN FACTS AND IN LA W IN CONFIRMING THE A.OS ORDER IN TAXING THE AMOUNT OF RS.1 96 896/ ( RS.5.69 PER SHARE) UNDER THE HEAD INCOME FROM OTHER SOURCES THOUGH SUCH IN TEREST PORTION ACCRUING ON TRANSFER OF SHARES IN THE BUYBACK TRANS ACTION WAS LEGALLY REQUIRED TO BE CONSIDERED AS PART OF THE SALE CONSIDERATION OF THE SAID SHARES 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE HELD 50810 EQUITY SHARES IN SOMA TEXTILES LTD. ANOTHER COMPANY M/S. MAVI INVEST MENT FUND LTD MADE AN OPEN OFFER TO BUY SHARES OF M/S. SOMA TEXTILES AND INDUSTRIES LTD AT A PRICE OF RS. 34.45 PER SHARES IN AN OPEN OFFER ON 01/06/2007 . HOWEVER THE SAID COMPANY FAILED TO ACQUIR E THE SHARES ON THE DATE OF OFFER. THEREAFTER THE TRANSFER OF SHARES TOOK PLACE ON 24/01/2009. AS PER RULES AN D REGULATIONS OF SEBI M/S. MAVI INVESTMENTS FUND LTD COMPENSATED THE SHAREHOLD ERS BY PAYING RS. 5.69 PER SHARE FOR THE PERIOD ON WHICH IT MADE OPEN OFFE R I.E. 01/06/2007 AND THE DATE OF ACTUAL TRANSFER I.E. 24/01/2009. OUT OF TH E TOTAL SHARES ONLY 34604 WERE BOUGHT BY THE ABOVE COMPANY. THE COMPANY PAID THE E NTIRE CONSIDERATION AFTER DEDUCTION OF TDS OF RS.20 280/- ON THE INTEREST AS MENTIONED SUPRA. THE ASSESSEE TREATED THE INTEREST AS PART OF THE SALES CONSIDERATION AND FILED THE RETURN OF INCOME ACCORDINGLY. ITA NO.845/M/2014 & ITA NO.846/M/2014 SMT. RAMINDER KAUR CHAWLA & SHRI AJIT SINGH CHAWLA 3 3. THE LD. AO TREATED INTEREST OF RS. 1 96 896.76 A S INCOME FROM OTHER SOURCES AND ASSESSED THE INCOME ACCORDINGLY THERE BY REJECTING THE ASSESSEE CLAIM OF INTEREST BEING PART OF SALES CONSIDERATION . 4. THE LD. CIT(A) DISMISSED THE APPEAL AND UPHELD THE ORDER OF AO BY HOLDING THAT TRIBUNAL IN ITA NO 5584/MUM/2010 DATE D 28/12/2011 HAS HELD THAT INTEREST RECEIVED BY THE ASSESSEE CAN NOT BE TREATED AS PART OF THE SALES CONSIDERATION OF SHARES AND SAME IS TO BE ASSESSE D UNDER THE HEAD INCOME FROM OTHER SOURCES. 5. WE HAVE CONSIDERED THE RIVAL ARGUMENTS AND RECOR DS WITH US. M/S. MAVI INVESTMENTS FUND LTD MADE AN OPEN OFFER ON 01/06/20 07 AT RS 34.45 PER SHARES BUT THE PROCESS OF ACQUISITION WAS DELAYED A ND ACTUAL TRANSFER TOOK PLACE ON 24/01/2009. AS PER SEBI RULES AND REGULATIONS T HE ASSESSEE WAS COMPENSATED AND WAS PAID INTEREST @ RS. 5.69 PER SH ARE FOR THE PERIOD COMMENCING FROM 01/06/2007 TO 27/01/2009. THUS THE ASSESSEE RECEIVED RS. 40.14 PER SHARE INCLUDING INTEREST OF RS. 5.69 PER SHARE. THE DR ARGUED THAT INTEREST PRIOR TO THE DATE OF TRANSFER WAS PAID DUE TO DELAY IN PAYMENT OF SALES CONSIDERATION. THE COUNSEL OF THE ASSESSEE ARGUED T HAT RIGHT TO RECEIVE THE SALES CONSIDERATION ACCRUED TO THE ASSESSEE ON 24/0 1/2009 WHEN THE ACTUAL TRANSFER TOOK PLACE AND NOT ON THE DATE OF OPEN OFF ER BY M/S. MAVI INVESTMENTS FUND LTD. ASSESSEE FURTHER ARGUED THAT TRIBUNAL L BENCH IN THE CASE OF GENESIS INDIAN INVESTMENT COMPANY LTD. IN ITA NO. 2878/MUM/2006 DATED 14TH AUGUST 2013 ON THE IDENTICAL FACTS HAS HELD THAT THE INTEREST WHICH RELATES TO THE PERIOD PRIOR TO THE DATE OF TRANSFER IS PART OF THE SALES CONSIDERATION AND NOT INCOME FROM OTHER SOURCES. WE FIND THAT THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE ABOVE JUDGMENT OF THE TRIBUNAL HENCE FOLLOWING THE SAME WE ALLOW THE APPEAL OF THE ASSE SSEE. ITA NO.845/M/2014 & ITA NO.846/M/2014 SMT. RAMINDER KAUR CHAWLA & SHRI AJIT SINGH CHAWLA 4 ITA NO. 846/M/2014 SINCE THE ISSUE RAISED IN THIS APPEAL IS BASED ON I DENTICAL FACTS HENCE IN VIEW OF OUR FINDINGS GIVEN ABOVE THIS APPEAL OF TH E ASSESSEE IS ALSO HEREBY ALLOWED. 6. IN THE RESULT BOTH THE APPEALS ARE HEREBY ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 31.07.2015 SD/- SD/- (G.S. PANNU) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED: 31.07.2015. * PATEL P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT CONCERNED MUMBAI THE CIT (A) CONCERNED MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR ITAT MUMBAI.