TaxTMI 
TaxTMI 
2013 (12) TMI 1354
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.... arrived at by adopting the break up value method, as against face value of Rs.10/- per share without appreciating the facts that the addition was made on account of the difference of the value of transfer of shares, on the basis of evidence found during the course of search and assessment proceedings in the case of M/s. Today Homes and Infrastructure Pvt. Ltd. New Delhi to which the shares of the company were transferred and land was sold. 2. Whether on the facts and circumstances of the case the ld. CIT(A) was justified in no appreciating the fact that Sh. Arun Kapoor, one of the Directors & share holders of the company M/s. P.R. Infrastructure Pvt. Ltd. vide his affidavit has admitted having received Rs.1,00,00,000/- (Rs. One crore) on behalf of all the partners, associates, Directors, shareholders out of the total sale consideration of Rs.12,25,00,000/- (Rs.Twelve Crores Twenty Five lacs only). 3. Whether on the facts and circumstances of the case the ld. CIT(A) was justified in not appreciating the fact that the assessee has devised a colourful device to reduce the value of shares by selling the land owned by the company M/s. P.R. Infrastrucutre (P) Ltd. separately as pe....
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....ority has also decided the issue in dispute in favour of the assessee on merit also by respectfully following the order of this Bench dated 30.12.2009 in ITA No.380(Asr)/2009 in the case of ITO Ward 5(3),Amritsar vs. Dr. Poonam Singh and others. The findings of the ld. First appellate authority on the issues in dispute are reproduced hereunder for the sake of convenience: "6. I have considered the submissions of ld. counsel for the appellant and gone through the material placed on record including the assessment order and judicial ruling relied upon by the AO. The appellant has taken up ground No.(ii) of the appeal that the AO has erred in law by taking the action u/s 147 of the Act instead of following the procedure prescribed u/s 153C of the Act. In this regard, CBDT in para 65.9 of Circular No.7 of 2003 has explained the prov9sion of section 153C as under: "The new section provides that where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in section 153A, then the books of account or documents or ....
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.... M/s. P.R. Infrastructure Ltd. recorded by the A.O of M/s. Today Homes and Infrastructure (P) Ltd. A perusal of assessment order in the case of M/s. Today Homes and Infrastructure (P) Ltd. reproduced by the AO reveals that nowhere either Sh. Arun Nayyar or Sh. Arun Kumar Kapoor has admitted any transaction in connection with transfer of shares over and above the recorded value. Sh. Arun Kumar Kapoor admitted that a sum of Rs.49,00,000/- was received in connection with some proposed project but the amount stood transferred to M/s. Today Homes and Infrastructure (P) Ltd. through the books of accounts of this company. In the various statement recorded, none of the witnesses was questioned about the sale of shares by the appellant, much less any witness stating that the appellant had been paid any amount over and above the face value of the shares by the buyer of the shares. The AO could have summoned the persons who had negotiated the deal of purchase of shares from the appellant and ascertained whether any amount over and above the face value of the shares was paid to the appellant. Therefore, the position that emerges is tat there is not an iota of evidence to establish that the app....
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....ute the fair market value of the shares of an unlisted company. None of the cases is an authority for the proposition that the AO could substitute fair market value in place of the actual sale consideration received by an assessee for transfer of an asset and proceed to compute the capital gains on that basis. The approach of the AO in taking the fair market value as the consideration for computation of capital gains was erroneous. Earlier section 52 of the Act enabled the department to substitute the fair market value of the actual consideration but that provision has been omitted long back. Further, even when section 52 was on the statute book, the Hon'ble Supreme Court in the case of Sh. K.P. Varghese (131 ITR 597) held that before the provisions of section 52 could be applied, the revenue must establish that the actual consideration received by the assessee was more than what has been disclosed. Only in the case of immovable properties, section 50C of the Act provides for substitution of actual consideration by the market value determined by the Stamp Valuation Authority. In the case of movable property, the concept of fair market value as on the date of sale is totally immater....