TaxTMI 
TaxTMI 
2013 (4) TMI 446
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....action of the Assessing Officer for taking the value of sale consideration @ Rs.400 per share instead of actual sale consideration received @ Rs.390/- per share a Capital Gain is liable to be computed at Rs.9,55,73,488/-. 2. The Learned Dispute Resolution Panel-II, Delhi was not justified in making the addition of Rs.28,73,000/- under the head capital gain the same deserves to be fully deleted. 3. The Learned Dispute Resolution Panel-II, Delhi was not justified in computing the capital gain as per the provision of Section 48 of the IT Act, 1961 at Rs.9,88,76,204/-. The same deserves to be computed at Rs.9,55,73,488/-." 2. The facts of the case in brief are that the assessee, M....
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....hare, as against the actual sale consideration of Rs. 390/- per share; that while doing so, the Assessing Officer had wrongly applied the RBI Guidelines, whereas the same were under FEMA; that the mode of computation of Capital Gain, on the other hand, is provided u/s 48 of the IT Act; that though in the assessment order, the Assessing Officer had observed that the valuation as per the RBI Guidelines should be adopted, the word 'should' nowhere stands mentioned in the RBI Guidelines. 4. By virtue of the impugned Order, the DRP confirmed the assessment order. While doing so, it was observed that the RBI Guidelines are in respect of pricing of shares, when shares are being sold by a non-resident to a resident, and were binding on the asses....
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.... exceeds Rs. 20 lakhs per seller per company, at a price arrived at, at the seller's option, in any of the following manner namely (A) Or (B)** ** ** (C) Where the shares are not listed on any stock exchange, at a price which is lower of the two independent valuations of share, one by statutory auditors of the company and the other by a Chartered Accountant or by a Merchant Banker in Category 1 registered with Securities and Exchange Board of India." 6. Before us, challenging the impugned Order, the ld. counsel for the assessee has contended that the ld. DRP has erred i....
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....e other hand, has placed strong reliance on the impugned order. It has been contended that the assessee has remained unable to explain as to how the RBI Guidelines are not applicable to the assessee. It has further been contended that the Certificate of Remittance as well as the Memorandum of Understanding relate to the assessee and Sintex Industries Ltd. and so, the Assessing Officer was well justified in computing the veracity of the alleged negotiated rate of Rs. 390/-. 8. We have heard the parties and have perused the material on record. Undoubtedly, the RBI Guidelines are Guidelines for the banks, issued for FEMA purposes. Clause 2.3 (supra) of these Guidelines refers to Regulation 10B (2) of the Foreign Exchange Management (Approva....