DCIT, Circle - 36, Kolkata, Kolkata v. Sumita Somany, Kolkata

ITA 932/KOL/2010 | 2006-2007
Pronouncement Date: 05-01-2011

Appeal Details

RSA Number 93223514 RSA 2010
Assessee PAN ALMPS0475L
Bench Kolkata
Appeal Number ITA 932/KOL/2010
Duration Of Justice 7 month(s) 24 day(s)
Appellant DCIT, Circle - 36, Kolkata, Kolkata
Respondent Sumita Somany, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 05-01-2011
Appeal Filed By Department
Bench Allotted C
Tribunal Order Date 05-01-2011
Assessment Year 2006-2007
Appeal Filed On 12-05-2010
Judgment Text
IN THE INCOME-TAX APPELLATE TRIBUNAL C BE NCH : KOLKATA [BEFORE HONBLE SHRI B. R. MITTAL JM AND HONBLE S HRI C. D. RAO AM] ITA NO. 932 (KOL) OF 2010 : ASSESSMENT YEAR : 2006 -07 DY. COMMISSIONER OF INCOME TAX -VS.- SUMITA SOMANY CIRCLE-36 KOLKATA. KOLKATA [PAN : ALMPS 0475 L] [APPELLANT] [RESPONDENT] APPELLANT BY : SHRI S. BHA DRA RESPONDENT BY : SHRI P. K. SA NGHAI PER C. D. RAO A.M. THE DEPARTMENT HAS FILED THIS APPEAL FOR ASSESSMENT YEAR 2006-07 AGAINST THE ORDER OF THE LD. CIT(A)-XX KOLKATA DATED 25.02.2010. THE ON LY ISSUE INVOLVED IN THIS APPEAL IS THAT WHETHER THE LD. CIT(A) IS JUSTIFIED ON FACTS AND LA W IN DIRECTING TO TREAT THE WHOLE CONSIDERATION ON THE SALE OF EQUITY SHARES OF HINDU STHAN NATIONAL GLASS & INDUSTRIES LIMITED FOR COMPUTING LONG TERM CAPITAL GAINS AS AGAINST AS SESSING OFFICERS VIEW THAT PART OF IT IS INTEREST AS PER TDS CERTIFICATE. 2. AT THE TIME OF HEARING BEFORE US BOTH THE PARTI ES HAVE FAIRLY CONCEDED THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF T HIS TRIBUNAL DATED 08.10.2010 IN THE CASE OF DCIT VS. ABHISHEK SOMANY FAMILY TRUST IN ITA NO.880 /KOL/2010. 3. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREF UL PERUSAL OF THE MATERIAL AVAILABLE ON RECORD IT IS OBSERVED THAT THIS ISSUE IS FAIRLY CO VERED IN FAVOUR OF THE ASSESSEE BY THE EARLIER ORDER OF I.T.A.T. KOLKATA BENCHES FOR ASSESSMENT Y EAR 2006-07 IN THE CASE OF DCIT VS. ABHISHEK SOMANY FAMILY TRUST IN ITA NO. 880/KOL/201 0 DATED 08.10.2010 WHEREIN THE TRIBUNAL HAS HELD AS UNDER :- WE HAVE HEARD THE RIVAL SUBMISSIONS CONSIDERED TH E MATERIAL AVAILABLE ON RECORD AND THE CASE LAWS CITED BY THE LD. REPRES ENTATIVES. WE FIND THAT THE ASSESSEE SOLD THE SHARES PURSUANT TO THE OFFER LETT ER IN SEPTEMBER 2005 AND RECEIVED CONSIDERATION @ RS.81.28 PER SHARE. THE A SSESSING OFFICER AT THE TIME OF ASSESSMENT COMPUTED CAPITAL GAIN OF THE ASSESSEE BY CONSIDERING THE PRICE @ RS.64.17 PER SHARE AND TREATED THE BALANCE AMOUNT OF RS.17.11 PER SHARE AS INTEREST INCOME. WE FIND FORCE IN THE SUBMISSION OF THE LD. AR OF THE ASSESSEE THAT EVEN IF THE PURCHASE PRICE COMPRISING OF TWO P ARTS STATING RS.64.17 PER EQUITY SHARE AND INTEREST OF RS.17.11 PER SHARE WHI CH IS STATED FROM 4 TH FEBRUARY ITA NO. 933/KOL/20 10 2 2003 TILL 4 TH OCTOBER 2005 THE ASSESSEE SURRENDERED THE SHARES IN OCTOBER 2005 AND RECEIVED THE ENTIRE CONSIDERATION IN THE FINANC IAL YEAR 2005-06 RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. THEREFORE THE SALE HAS TAKEN PLACE ONLY WHEN THE SHARES WERE SURRENDERED/TRANSFERRED AND AC CORDINGLY SALE CONSIDERATION BECAME DUE IN OCTOBER 2005. THE QUESTION OF INTER EST ARISES ONLY WHEN AMOUNT HAS BECOME DUE TO THE ASSESSEE. WE FIND FORCE IN TH E SUBMISSION OF THE ASSESSEE THAT PRIOR TO THE LETTER OF OFFER ISSUED BY ACQUIRE R TO ACQUIRE SHARES THE SHARES COULD NOT BE SAID TO HAVE BEEN PURCHASED AND THERE FORE THERE WAS NO QUESTION OF ANY AMOUNT BECAME DUE TO THE ASSESSEE ON WHICH INTE REST CAN BE SAID TO HAVE ACCRUED. WE FIND FROM PAGE 2 OF THE PAPER BOOK THAT THE ASSESSEE SURRENDERED HIS SHARES IN SEPTEMBER 2005 AND ONLY ACCEPTANCE OF T HOSE SHARES THE ASSESSEE HAS RECEIVED SALE CONSIDERATION. AS PER SECTION 45 OF T HE I. T. ACT THE AMOUNT RECEIVED BY THE ASSESSEE ON THE TRANSFER OF SHARES IS THE CAPITAL RECEIPT AND THEREFORE FULL CONSIDERATION HAS RIGHTLY BEEN HELD TO BE ASSESSED BY THE LD. CIT(A) AS CAPITAL GAIN. WE ALSO FIND THAT IT IS AN UNDISPUTED FACT THAT THE SHARES WERE CAPITAL ASSET IN THE HANDS OF THE ASSESSEE AND THE INCOME HAS ARISEN FROM DISPOSAL OF SUCH CAPITAL ASSET. EVEN IF FOR THE SAK E OF ARGUMENT WE CONSIDER THAT THE AMOUNT OF RS.17.11 PER SHARE IS INTEREST ACCRUE D FOR THE PERIOD FOR FEBRUARY 2003 TILL 4 TH OCTOBER 2005 IN RESPECT OF THE SHARES ACQUIRED BY THE ACQUIRER FROM THE ASSESSEE IN THAT CASE IT HAS TO BE TREATED THA T THE SHARES WERE ACQUIRED IN THE FINANCIAL YEAR 2002-03 AND AS SUCH THE CAPITAL GAIN HAS TO BE COMPUTED RELEVANT TO ASSESSMENT YEAR 2003-04 AND ONLY IN THAT CASE TH E SAID AMOUNT OF RS.17.11 PER SHARE IS TO BE CONSIDERED AS INTEREST ACCRUED ON TH E AMOUNT BECAME DUE AND PAYABLE IN THE FINANCIAL YEAR 2002-03. HOWEVER IT IS NOT THE CASE AND THE ASSESSING OFFICER HAS CONSIDERED THE SALE TRANSACTI ON COMPLETED IN THE ASSESSMENT YEAR UNDER CONSIDERATION I.E. ASSESSMENT YEAR 2006-07. THEREFORE EVEN ON THAT BASIS THE ENTIRE CONSIDERATION RECEIVE D BY THE ASSESEE OF RS.81.28 PER SHARE IS THE SALE CONSIDERATION PER SHARE. WE ALSO FIND THAT THE OFFER PRICE WAS REGULATED AS PER THE SEBI GUIDELINES AND THE ASSESSEE IS NOT A PARTY TO THE PROCESS OF F IXATION. THE CASE LAWS REFERRED BY THE LD. DR ARE ALSO NOT RELEVANT TO THE FACTS OF THE CASE ON HAND. IN VIEW OF THE ABOVE AND ALSO IN THE ABSENCE OF ANY CONTROVER TING MATERIAL BROUGHT ON RECORD BY THE DEPARTMENT TO REBUT THE FINDINGS OF T HE LD. CIT(A) WE DO NOT FIND ANY INFIRMITY IN HIS ORDER AND THE SAME IS HEREBY U PHELD THE GROUND TAKEN BY THE REVENUE IS REJECTED. KEEPING IN VIEW OF THE ABOVE SINCE THE LD. CIT(A) S ORDER IS IN CONFORMITY WITH THE ORDER OF THE TRIBUNAL WE FIND NO REASON TO INTERFERE WITH T HE SAME. 4. IN THE RESULT THE APPEAL OF THE DEPARTMENT IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 05. 01. 2011. SD/- SD/- [ B. R. MITTAL ] [ C. D. RAO ] JUDICIAL MEMBER ACCOUN TANT MEMBER DATED : 5TH JANUARY 2011. ITA NO. 933/KOL/20 10 3 COPY FORWARDED TO THE - 1. DY. COMMISSIONER OF INCOME TAX CIRCLE-36 18 RABI NDRA SARANI PODEDAR COURT 3 RD FLOOR KOLKATA-700 001. 2. SUMITA SOMANY C/O. HINDUSTAN SANITARY WORKS & INDU STRIES LTD. 2 RED CROSS PLACE KOLKATA-700001. 3. CIT(A)- (4) CIT- 5. D.R. I.T.A.T. KOLKATA. [TRUE COPY] BY ORDER DEPUTY/ASSISTANT REGISTRAR (KKC) I .T.A.T. KOLKATA.