2004 (1) TMI 702

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....oorthy, J. - The respondent-assessee is a company, which is a cent per cent subsidiary company, called M/s. Annamalaiar Textiles (P.) Ltd. The shares of the assessee holding company were held practically by two groups of shareholders, the majority shareholders called 'A' group and minority shareholders called 'B' group. Since all were not well and there were some differences of opinion, they th....

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....on for transfer and after deducting the face value of shares as cost of acquisition to bring the tax, the difference of Rs. 18,19,400 as capital gains. Of course, before the said officer, assessee-company put forth a plea that this was composite transaction and the payment of Rs. 42.45 lakhs was only to set off the advantage in profitability of the subsidiary company and was not a consideration fo....

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....s had the same rights in total shareholdings before and after the transaction and only the assets had been rearranged so that one group will have control over another company and the payment of Rs. 42.45 lakhs was made only to equalise the profitability of the company on expert advise. On behalf of the revenue, it was submitted that the transfer of the shares of the subsidiary company by the asses....

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....the CBDT and the ITO can finalise the matter in accordance with the directions that may be given by CBDT. 4. The present tax case has been filed by the CIT, Madurai, questioning the correctness of the order of the Tribunal. 5. We examined the agreement dated 1st June, 1985 and also considered the submissions made by the respective counsel. That the object of the agreement to divide the two c....