TaxTMI 
TaxTMI 
2017 (6) TMI 238
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....s below have failed to appreciate that valuation made by the valuation officer without affording any opportunity of being heard to the appellant and without providing proposed estimate of the value of the asset to the appellant with the opportunity to file objection as laid down in sub section (4) of section 16A of the wealth tax Act, is invalid and liable to be ignored. (b) That in any case, basis of the valuation of the share adopted by the valuation officer is illegal, unsustainable and is liable to be set aside being contrary to the directions of the learned Tribunal as contained in its order dated 20.07.2007 passed in ITA No.835/DEL/05 in the case of the appellant. 3(a) That that the learned CIT (A) has failed to appreciate that if the valuation report of the valuation officer is not to be considered by the AO, computation of capital gains will fail inasmuch as the valuation report was the only basis for computing the capital gains by the AO and impugned assessment made on the basis of invalid report is also invalid and is liable to be quashed. (b) That the learned CIT(A) has further erred in law in holding that sale consideration taken by the AO is ....
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.... the matter to the file of the Assessing Officer for computing the short-term capital gain after taking into account the sale consideration to be worked out as per directions of the Tribunal and to adopt the net worth of the business of the assessee as per the provisions of section 50B(3) of the Act. 3.1 Consequent to the direction of the Tribunal, in proceedings before the Assessing Officer, the assessee filed a certificate from Chartered Accountant wherein the net worth of the company was adopted at Rs. 1,46,94,768/-. For the purpose of adopting the market value of the share as on the date of the sale, the Assessing Officer made a reference under section 55A of the Act to the valuation officer, who submitted his report vide letter dated 03/12/2008. The valuation officer estimated the value of the share at not less than Rs. 10 per share. The Assessing Officer provided a copy of the valuation report to the assessee for his objections if any to the valuation estimated by the valuation officer. The assessee objected that valuation officer did not provide any opportunity to the assessee. The Assessing Officer did not accept the contention of the assessee and computed the short-term....
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.... of September, November 2000 and January 2001 adopted by the Ld. CIT-A whereas the transfer of shares had taken place on 31/07/2000. In ground No. 4 the assessee has contested the finding of the Ld. CIT-A that acquisition of shares by the assessee was at a premium to the market rate due to purchase in bulk and purchase of controlling stake. 5. Before us, the Ld. counsel of the assessee submitted a paper book containing pages 1 to 59 and referred page No. 47 to 48 of the paper book, which is an affidavit of the director of the company deposing that notices dated 24/01/2013 and 13/03/2013 issued by the Ld. CIT-A were not received. The Ld. counsel also referred to page 49 of the paper book, which is an information downloaded from the website of "Department of post, India", according to which , consignment details were not available on tracking website. The Ld. counsel also contested that the Assessing Officer as well as the Ld. CIT-A has not followed the direction of the Tribunal to obtain authentic information from the concerned exchange, regarding prevailing rates in the market before and after the date of transfer. The Ld. counsel filed copies of the information downloaded from ....
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....ansfer of undertaking in question was executed on 16/06/2000 and another agreement titled "memorandum of entry" was prepared on 31/07/2000, and therefore as per direction of the Tribunal (supra) the market price of the shares in the month from June 2000 to August 2000 should be considered for determining the market price of shares. 9. In our opinion, the additional evidences filed on behalf of the assessee are relevant to decide the issue in dispute and accordingly, we admit the same. 10. We find that in the case in hand the matter was restored to the file of the Assessing Officer by the Tribunal for complying the specific directions regarding the computation of short-term capital gain on slum sale of the undertaking. The direction of the Tribunal (supra) on the issue in dispute is as under: "8.6. The stand of the assessee regarding determination of the value of shares right from the very beginning was that the consideration determined by the AO at Rs. 4.50 crores is wrong. In this regard before the ITAT also ground nos. 8 & 9 have been taken specifically. The learned counsel pointed out that before the AO as well as before the learned CIT (Appeals) this submission w....
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....urrent quotes Trading volumes Charts ADRs/GDRs Price Historic Other instruments Quote search Competitors Quarterly Results Sheet Annual Results P&L Accounts Balance Ratios Group Director's Report News Snapshot Comp. History Peer Date Open High Low Close Volume 14 JUL 00 4.05 4.05 4. 05 4.05 200 13 Jul 00 5.00 5.00 5. 00 5.00 800 12 Jul 00 5.00 5.00 5. 00 5.00 400 11 Jul 00 5.00 5.50 5. 00 5.50 1000 06 Jul 00 5.60 5.60 4. 35 5.00 4700 05 Jul 00 4.05 4.50 4. 05 4.50 800 05 Jul 00 5.00 5.00 4. 50 4.50 2400 30 Jun 00 4.05 4.05 4. 05 4.05 100 ....
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....ble on the website of the Bombay Stock Exchange regarding the share price of the appellant company during the asstt. under consideration was seen. It was observed that on the following dates, the shares were quoted at even more than Rs. 10 per share: Date Open Price High Price Low Price Close Price 30-Jan-01 9.45 9.5 9.45 9.5 02-Nov-00 10.25 10.5 9.4 9.4 Ol-Nov-OO 11.8 11.8 10 10.2 25-Sep-00 10 10 9.75 9.75 22-Sep-00 10.15 10.15 10.15 10.15 20-Sep-00 10.55 10.55 10.55 10.55 12-Sep-OO 10.95 10.95 10.95 10.95 ll-Sep-00 11.35 11.45 11.15 11.15 08-Sep-00 12.05 12.05 11.6 11.6 07-Sep-00 12.05 12.05 12.05 12.05 06-Sep-00 11.65 11.65 11.65 11.65 05-Sep-00 10.65 10.8 10.65 10.8 11. The above shows that the share was quoted at Rs. 12.05 on 7.9.2000 and 8.9.000. It was again quoted at Rs. 11.80 on 1.11.2000 and at Rs. 9.45 on 30.1.2001. This information is available in the public d....
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....he shortterm capital gain in the case of the present assessee after taking into account the sale consideration, which is to be worked out in the light of our observations made above and to adopt the net worth of the business of the assessee as per the provisions of section 50B(3) as referred to above. This has to be done after providing due opportunity of hearing to the assessee and as per law". The Hon'ble ITAT have directed the A.O. to work out the capital gain in this case as per law. The A.O. was therefore, within the mandate of directions by the Hon'ble ITAT in making a reference to the Valuation Officer for the purpose of calculation of capital gain. As discussed above, the sale consideration taken by the A.O. is justified on the basis of the face value of shares and the market rates, and the computation of capital gain is justified even if the valuation report is not considered. In view of these facts, the computation of capital gain by the A.O. cannot be said to be erroneous on the ground that he made a reference to the Valuation Officer. This is because this reference is valid in law and also because even if the valuation report is not considered, the sale consideratio....
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....adopted by the valuer. In our opinion, the Assessing Officer followed the direction of the Tribunal and sent the matter to the expert valuer and thereafter the report of the valuer was sent to the assessee for its objection, wherein the assessee filed its objection. A copy of said letter containing objections has been placed before us from page 42 to 45 of the paper book. In the letter dated 23/12/2008 filed before the Assessing Officer , the assessee objected mainly that approved valuer had not proceeded to determine the market value as directed by the Tribunal and determined the value of the shares on the basis of a report of M/s price water Coopers related to enterprise value of the acquired entity. 14. In our opinion, the Ld. CIT-A has taken into consideration the directions of the Tribunal and referred to the stock prices available on the website of the Bombay stock exchange and also taken into account the factors of purchase in bulk and acquisition of controlling stake and justified the valuation made by the valuation officer based on the net asset value(NAV) of the shares of the acquired entity. The information obtained from the website of the Bombay stock exchange is cer....