TaxTMI 
TaxTMI 
2012 (11) TMI 322
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.... the appellant revenue has formulated the following questions of law for the consideration of this Court: a) Whether on the facts and in the circumstances of the case and in law the Tribunal was justified in holding that the order u/s. 143(3) dated 22.12.2006 was not erroneous and prejudicial to the interest of the revenue when the shares were transferred for settlement of debt of Rs. 50 crores and so the borrower got the benefit of remission of debt liability and consequences of non-repayment and the full value of consideration in this case was not only the principal component of debt but also the difference between the fair market value and the cost of shares? b) Whether on the facts and circums....
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.... the face value per share) to one Mukesh Ambani when the market value of the share was Rs. 53.01 per share. Therefore, the notice proposed to assess a sum of Rs. 2635 crores as a short term capital gain being a difference between market value per share of Rs. 53.71 and face value per share was Rs. 1/-. (ii) amount of Rs. 3037 crores received from Reliance Infocomm Ltd. as fees for grant of Indefeasible Right of Connectivity (IRC) for a period of 20 years was income accrued to the assessee in the assessment year 2004-05 itself. c) The respondent-assessee responded to both the notices and contended that 50 crores shares of the face value of Rs. 1/- per share were given as ple....
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....ment order dated 22/12/2006 was erroneous as well as prejudicial to the interest of the revenue and he exercised powers under Section 263 of the Act. On merits he held that there had been a sale and a difference of Rs. 2635 crores (between market value of the shares and the face value of the shares) is assessable to tax as short term capital gain. So far as the amount of Rs. 3037 crores is concerned he held that the entire amount of Rs. 3037 crores received as fees for IRC is income chargeable to tax for the assessment year 2005-06. e) Being aggrieved, the respondent-assessee filed an appeal to the Tribunal. By an order dated 21/8/2009 the Tribunal allowed the respondent-assessee's appeal not only on the ground tha....
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....Act did not exist and the same was incorrectly exercised by the Commissioner of Income Tax. 4. Mr. Suresh Kumar in support of the appeal places reliance upon the order of the Commissioner of Income Tax dated 9/03/2006 and submits as under: (i) There is a sale of 50 crore share of Reliance Infocomm ltd. to one Mukesh Ambani as is evident from the fact that the shares were de materialized from the respondent assessee's account to one Mukesh Amabani's account. Consequently the market value of the 50 crores share is to be taken as consideration to arrive at the short term capital gains; and (ii) The amount of Rs. 3037 crores received as IRC fees is the fees received for an ind....
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....he Tribunal has on consideration of all facts concluded that there was no transfer of shares but only a pledge of shares for the purposes of obtaining a loan. This short term loan of Rs. 50 crores was repaid on 24.12.2004 as is evident from audited accounts and annual reports for the assessment year 2004-05. The audited accounts show that that the amount of Rs. 50 crores had been received as a loan. Further the balance sheet filed for assessment year 2005-06 also shows that an amount of Rs. 50 crores shown under the head other loans as on 31/3/2004 was shown as nil as on 31/3/2005. In case it was not a loan, as rightly observed by the Tribunal there would have been no occasion to repay the amounts. Further the appellant before us has not di....