TaxTMI 
TaxTMI 
2016 (6) TMI 852
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....peals are being disposed of together as it is an admitted position that the issues arising in both the appeals are identical, arising from identical facts. 3. The Revenue urges before us the following common questions of law in both the appeals for our consideration. (i) Whether in the facts and circumstances of the case and in law, the Tribunal was right in holding that the income from the sale consideration of the shares has to be treated as income under the head 'Capital Gains' and not under the head 'Income from other sources'. (ii) Whether in the facts and circumstances of the case and in law, the Tribunal has erred in upholding the decision of the CIT(A) that the scheme drawn by BIFR for pledge / transfer of shar....
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....s questions, the basic issue which arises in the present appeals is whether the income on account of sale of shares has to be treated as 'Capital Gains' or as 'Income from other sources' i.e. question no.(i) as urged. The other questions are in the nature of arguments / submissions / evidence in support of question no.(i). 5. During the subject assessment years, the respondent assessees had declared capital gains arising out of sale of shares held by them in M/s. Chaitra Realty Ltd. to M/s. Vishal Nirman (India) Ltd. During the course of the assessment proceedings, the respondent assessee explained that the shares in M/s. Chaitra Realty Ltd. was allotted to them as a consequence of their share holding in M/s. Hindustan Spin....
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.... shares. It further proceeds on the basis that M/s. Vishal Nirman (India) Ltd. was providing funds to M/s. Chaitra Realty Ltd. to clear its encumbrances one by one. These funds were kept in Escrow by appointing an Escrow Agent and on getting sufficient security, the amounts were disbursed by the Escrow Agent. Consequently, the Assessing Officer holds that it is not a case of sale of shares by the respondent assessee in M/s. Chaitra Realty Ltd. which gave rise to receipt of consideration in its hands, but it was a continuance of transaction starting from the formulation of the scheme under the B.I.F.R. running through the MoU to the acquisition of Prabhadevi property of M/s. Chaitra Realty Ltd. by M/s. Vishal Nirman (India) Ltd. which result....
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....ribunal. The impugned order of the Tribunal while upholding the order of the CIT(A) came to the conclusion that the respondent assessee has only sold its shares in M/s. Chaitra Realty Ltd. to M/s. Vishal Nirman (India) Ltd. and not its property at Prabhadevi. In fact, the impugned order holds that Prabhadevi property continues to be owned by M/s. Chaitra Realty Ltd. and mere change in the shareholders would not wipe out the existence of M/s. Chaitra Realty Ltd. In the above view, the claim of the respondent assessees of offering the gain on account of sale of shares to tax under the head 'capital gain' was upheld. 8. Mr. Chhotaray, learned Counsel appearing for the Revenue was at pains to point out that the impugned order passed by....
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....tion of facts found that the transfer by respondent assessees of its shares in M/s. Chaitra Realty Ltd. to M/s. Vishal Nirman (India) Ltd. took place on 8th August, 2007. This was consequent to the letter of offer dated 31st July, 2007 by M/s. Vishal Nirman (India) Ltd. and not as a consequence of MoU dated 8th May, 2006. The entire case of the Revenue as canvassed before us as also noted by the Assessing Officer proceeded on the basis that the respondent assessee had transferred its shares in M/s. Chaitra Realty Ltd. by the MoU dated 8th May, 2006 to M/s. Vishal Nirman (India) Ltd. This has been factually found to be incorrect by both the CIT(A) and the Tribunal in the impugned order. Nothing has been shown to us which even remotely indica....