TaxTMI 
TaxTMI 
2012 (12) TMI 167
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....hareholder, was capital gain. 2. The assessee as an individual had been the owner of the proprietary concern which used to provide civil engineering consultancy styled as SD Engineering Consultants. The concern was taken over by ICT-SD Engineering Consultants Pvt. Ltd. w.e.f. 31.10.2007. The assessee received Rs.1,20,00,000/- in terms of the memorandum of understanding dated 30.10.2007 and subsequent agreement dated 4.12.2007 as consideration. The two other individuals i.e. Mr. K K Kapila and his brother Mr. S D Kapila were entitled to shareholding aggregating to 55% shares in the said company; 45% was held by the assessee. In the return filed the assessee claimed that the amount received by her was on capital account and gave rise to cap....
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....f the business of S.D. Engg. Consultants as a going concern on the close of business as on 31.10.2007, for a total consideration of Rs.1,20,00,000/-, inclusive of good-will, empanelments, receivables, work in progress and all other rights and entitlements. Out of the said consideration of Rs.1,20,00,000/-, a sum of Rs.54,00,000/- was to be paid by Rs.54,000/- fully paid up the equity shares of ICT-SD Engineering Consultants Pvt. Limited. At this juncture, it would be appropriate to reproduce here-under, the relevant clauses of the said Agreement:- "1. That M/s. ICT-SD Engineering Consultants Pvt. Ltd. have taken over the assets and liabilities of the business of the party of the second part, i.e., Mrs. Sangeeta Wij under the name and style....
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....vidual assets and liabilities in such sales. 14. The assessee having carried on business for 11 years, she computed long term capital gains qua the slump sale under section 50B of the I.T. Act and under the said section, she furnished the Report of a Chartered Accountant in Form 3 CEA, determining the net worth at Rs.4,73,725/-, taking the Written Down Value of depreciable assets and the book value of the other assets, in accordance with Explanation 2 to section 50B of the Act. The long term capital gain was thus calculated at Rs.1,15,26,275/-. Seeking to avail exemption thereon u/s 54 F of the Act, the assessee invested Rs.1,76,64,235/- by purchasing an apartment in Westend Heights, DLF City-V, Gurgaon, on 13.6.2008. The complete docume....
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.... 7 of the agreement dated 4.12.2007 and also the extent of shareholding were carefully analysed by the Tribunal. In addition to these, it made detailed consideration of the law on the subject. In this regard the Tribunal took into account judgment of the Supreme Court in CIT Vs. Motor & General Stores (P) Ltd. (1967) 66 ITR 692 (SC) to the effect that the real intention of the parties has to be gathered on the appreciation of a background in its entirety instead of focusing either on the nomenclature or concentrating on certain parts of it. Furthermore, the Tribunal took note of the CBDT Circular No.779 14.09.1999 in this regard. 4. After such consideration the Tribunal held as follows: "50. The assessee's business, it may be reiterated, ....