TaxTMI 
TaxTMI 
2018 (5) TMI 492
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....er and holder of 105,000 shares of Great Offshore Ltd. having face value of Rs. 10/- per share and purchased at a cost of Rs. 34,58,108.03 as shown in the balance sheet. The shares of Great Offshore Ltd. are listed on the recognized stock exchange. The aforesaid shares are held as long term capital asset in conformity with section 2(29A) read with section 2(42A) of the Act. During the assessment year 2009-10, the assessee along with the other shareholders entered into an agreement dated 21/10/2008 with Eleventh Land Developers Pvt. Ltd. for the sale of their respective shareholding in Great Offshore Ltd. together constituting 7.5% of paid-up equity share capital of the company at a fixed rate of Rs. 540/- per share on a spot delivery basis ....
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....der section 143(3) of the Act. The AO did not discuss the issue of liquidated damages received by the assessee in the assessment order. He accepted the view of the assessee that the liquidated damages received during the year by the assessee from M/s. Eleventh Land Developers Pvt. Ltd. is not taxable either as capital gains or as revenue receipt. The Ld. DIT(IT) issued notice to the assessee under section 263(1) of the Act wherein it was stated that the AO omitted to add back the amount of Rs. 34,57,318/- received as liquidated damages which is taxable u/s.56(2)(vi). Therefore, the assessment order was prejudicial to the interest of the revenue in terms of section 263(1) of the Act. The show cause notice was given and the assessee has filed....
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.... views are possible one view is permissible in law then invoking the provisions of section 263 is not valid. The Ld. A.R. submitted that the assessee has filed the details and documents pertaining to liquidated damages. The AO has not verified the details but AO was satisfied with the explanation of the assessee. Therefore, order is not erroneous. The Ld. A.R. relied upon the order of Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. vs. CIT (243 ITR 83, SC), CIT vs. Max India Ltd. (295 ITR 282 SC). She also relied upon the decisions of various High Courts in the case of Grasim Industries Ltd. vs. CIT (321 ITR 92, Bom) and CIT vs. DLF Power Ltd. (329 ITR 289, Del.). The Ld. A.R. further submitted that the order of Ld. DIT(IT)....
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....xable as capital gain or revenue income or does not taxable as capital gain or revenue income. We have also inquired from the Ld. A.R. that beyond assessment proceedings whether the AO has asked for any details regarding liquidated damages. The Ld. A.R. admitted that no notice regarding liquidated damages was issued by the AO. We also found from the order of Ld. DIT(IT) that Ld. DIT(IT) has passed the order without discussing the written submission which was filed before Ld. DIT(IT). The assessee has taken the contention that assessee has made full disclosure along with document and details and all the details were before the AO. Therefore, it is not taxable either as revenue receipt or capital receipt. The Ld. A.R. also relied upon the dec....