TaxTMI 
TaxTMI 
2018 (10) TMI 1391
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.... the facts and in the circumstances of the appellant's case and in law, the Ld. CIT(A) has erred in not appreciating the Assessing Officer has incorrectly adopted 22.06.2010 as the date of the transaction. 4) That on the facts and in the circumstances of the appellant's case and in law, the Ld. CIT(A) has erred in not appreciating that Assessing Officer has incorrectly worked out fair market value of the shares of M/s Global Energy Pvt. Ltd. (GEPL) as on 22.06.2010 at the rate of Rs. 31.05 per share. 5) The Ld. CIT(A)'s order being contrary to law, evidence and facts of the case should be set aside, amended or modified in the light of the ground deducted above. 6) The grounds of appeal above are independent of a without prejudice to each other. 3. Short facts apropos are that the appellant had purchased during the year under consideration, 30,00,000 shares of Global Energy Pvt. Ltd. ('GEPL') @ Rs. 30/- each from Belgundi Cements Pvt. Ltd. ('BCPL') worth Rs. 9 crores (face value of each share Rs. 10/-). BCPL had received during the financial year (FY) 2009-10 relevant to the assessment year (AY) 2010-11, Rs. 10 crores from the appellant and as such had ....
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....see filed the following working before the AO: FMV per share as on 31.03.2010 Rs.28.61 Valuation of shares as on 31.03.2011 (per share) = Net worth /No. of shares = 166,46,77,754*/2,95,91,625 = Rs. 39.36 Incremental for FY 2010-11= Rs. 39.36 - Rs. 28.61 = Rs. 10.75 Proportionate for 22.06.2010 (83 days) = Rs. 10.75 x 83/364 = Rs. 2.44 FMV per share as on 22.06.2010 = Rs. 28.61 + Rs. 2.44 Rs.31.05 Accordingly, the AO computed the FMV of these shares on the valuation date i.e. 22.06.2010 at Rs. 31.05/- and brought to tax the excess amount of Rs. 31,50,000/- u/s 56(2)(vii). 4. Aggrieved by the order of the AO, the assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) held that (i) the definition of 'balance sheet' in Rule 11U prior to amendment stated that the same should be the balance sheet drawn up as on date of valuation, (ii) the amended rule gave an option to adopt the immediately preceding approved and adopted balance sheet in cases where there was no balance sheet drawn up as on date of valuation, (iii) GEPL is a closely held company where the appellant and his wife are the only shareholders and therefore, there was nothing preventing ....
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....e valuation based on the same could never have been taken on the date of transfer and hence is wrong on facts and in law. Reliance was placed by him on Rule 11U(b) r.w. Rule 11UA. The Ld. counsel submits that the Ld. CIT(A) did not follow the amended definition of balance sheet provided in Rule 11U(b) merely on the ground that the said amendment to the Rule came only w.e.f. 29.11.2012 i.e. post the date of transaction. It is stated that the Ld. CIT(A) failed to appreciate the well-settled principle of law that amended rules of procedure which are beneficiary would be applicable to all pending proceedings. Reliance is placed by him on the decision in (i) C.W.S. (India) Ltd. v. CIT (1994) 73 Taxman 174 (SC), (ii) Urvi Chirag Sheth v. ITO (2016) 70 taxmann.com 33 ITAT Ahmedabad, (iii) DCIT v. Paras D. Gundecha (2015) 62 taxmann.com 170 ITAT Mumbai, (iv) K.P. Varghese v. ITO (1981) 7 Taxman 13 (SC), (v) CIT, Gauhati v. Sati Oil Udyog Ltd. (2015) 56 taxmann.com 285 (SC), (vi) CIT v. Tainwala Chemicals & Plastics India Ltd. (2013) 34 taxmann.om 159 (Bom.), (vii) CIT v. Berry Plastics (P.) Ltd. (2013) 35 taxmann.com 296 (Guj.) and (viii) CIT v. B.C. Srinivasa Setty (1981) 5 Taxman 1....
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....8, which sets out the object behind this clause". In Urvi Chirag Sheth (supra), it has been held that interest awarded by Court on motor accident compensation, being a capital receipt, is not taxable as income. In Paras D. Gundecha (supra), it is held that where assessee received certain sum out of family settlement, the same was not taxable u/s 56(2)(v). In K.P. Varghese (supra), it is held in case of capital gains u/s 52 (2) that understatement of consideration in a transfer of property is a necessary condition for attracting applicability of section 52(2) and it is not enough for the revenue to show that FMV of property as on date of transfer exceeds full value of consideration declared by the assessee in respect of transfer by an amount of not less than 15% of value so declared. In Sati Oil Udyog Ltd. (supra), it is held that amendment made to section 143(1A) by Finance Act 1993, with retrospective effect from 01.04.1999, was constitutionally valid. In Tainwala Chemicals & Plastics India Ltd. (supra), it is held that the Tribunal has rightly allowed the assessee's claim holding that AO had merely alleged that shares were sold at very low price, but he had not dis....
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....d question. The method for the determination of FMV of property other than immovable property has been provided in Rules 11U and 11UA vide Notification No. 23/2010/F. No. 142/21/2009-SO (TPL) dated 08.04.2010: [2010] 322 ITR (St.) 25. The meaning of "balance sheet" has been given in Rule 11U(b) of the Rules and the same has been substituted by the IT (15th Amendment) Rules, 2012, w.e.f. 29.11.2012 and the same has been relied upon by the Ld. counsel. Prior to their substitution, clause (b) reads as under: (b) "balance sheet", in relation to any company, means the balance-sheet of such company (including the notes annexed thereto and forming part of the accounts) as drawn up on the valuation date; 7.2 In view of the above factual matrix, it is crystal clear that the case of the appellant is distinguishable from the cases relied on by the Ld. counsel. 7.3 The legal nodus confronting us has been considered by the Constitution Bench of the Hon'ble Supreme Court in CIT v. Vatika Township Pvt. Ltd. (2015) 1 SCC. Their Lordships held at para 27-31 and 35 as under: "General Principles concerning retrospectivity 27. A legislation, be it a statutory Act or....
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....ach a new disability have to be treated as prospective unless the legislative intent is clearly to give the enactment a retrospective effect; unless the legislation is for purpose of supplying an obvious omission in a former legislation or to explain a former legislation. We need not note the cornucopia of case law available on the subject because aforesaid legal position clearly emerges from the various decisions and this legal position was conceded by the counsel for the parties. In any case, we shall refer to few judgments containing this dicta, a little later. 30. We would also like to point out, for the sake of completeness, that where a benefit is conferred by a legislation, the rule against a retrospective construction is different. If a legislation confers a benefit on some persons but without inflicting a corresponding detriment on some other person or on the public generally, and where to confer such benefit appears to have been the legislators' object, then the presumption would be that such a legislation, giving it a purposive construction, would warrant it to be given a retrospective effect. This exactly is the justification to treat procedural provisions as r....