Equivalent value attachment under money laundering law upheld where received funds were treated as proceeds of crime and prior-acquired property could...
ITAT held that the impugned shares were acquired by the assessee in a bona fide secondary market transaction in 2013 from a related concern and consistently reflected as investments in its balance sheet. The subsequent reduction of share capital pursuant to NCLT approval constituted a transfer taxable under the head "capital gains," and not "income from other sources." ITAT ruled that s.56(2)(viib) was inapplicable as there was no issue of shares at premium and that the AO wrongly applied the s.56 valuation methodology. For s.50CA, fair market value must be determined as on the actual date of transfer, which the assessee had substantiated. As the consideration was not below fair market value, s.50CA did not apply. The addition was deleted and the assessee's appeal allowed.
ITAT held that the impugned shares were acquired by the assessee in a bona fide secondary market transaction in 2013 from a related concern and consistently reflected as investments in its balance sheet. The subsequent reduction of share capital pursuant to NCLT approval constituted a transfer taxable under the head "capital gains," and not "income from other sources." ITAT ruled that s.56(2)(viib) was inapplicable as there was no issue of shares at premium and that the AO wrongly applied the s.56 valuation methodology. For s.50CA, fair market value must be determined as on the actual date of transfer, which the assessee had substantiated. As the consideration was not below fair market value, s.50CA did not apply. The addition was deleted and the assessee's appeal allowed.
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