TaxTMI 
TaxTMI 
2018 (9) TMI 2010
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....h Land Instruments International Limited (LAND). The said JV was formed for the purposes of carrying on business of manufacture, sale and providing services for non-contact temperature measurement products systems and components thereof. Technology in respect of the said business was to be provided by LAND. The said agreement defined UniDEL Group as meaning the applicant or its subsidiary or anybody corporate in which it has controlling interest. Similarly, Land Group was defined to mean LAND or its subsidiary company. In Article 8.6 of the said Agreement it was agreed that, in the event either group is amalgamated with or is being taken over by a third party, the other group shall have the option of purchasing all the shares in JV Company of the group amalgamating or being taken over or of selling all its shares in JV company to the group being amalgamated or taken over. Enabling provision in this regard was made in Article 8.7 at page 7 of the Paper book. The JV Company formed pursuant to the JV Agreement was Land DEL Infrared Pvt. Ltd. b. Since, the applicant apprehended the breach of article 8.6 of the JV Agreement it addressed letter dated January 31, 2006 in the Mana....
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....that a. the "capital asset" in the present case, if any, was rights conferred on it by clauses 8.6 and 8.7 of the JV Agreement as per which it could bind LAND to acquire its shareholding in Land Del Infrared Pvt. Ltd. on the happening of specified events. Therefore, reference to the capital asset giving rise to capital gains in the present case as shares of the JV Company is factually incorrect and has no basis. As a matter of fact, the applicant continued to hold the shares of Land Del Infrared Pvt. Ltd. and the said shares were riot transferred to LAND. b. Further, 'transfer', if any, in the present case is the Waiver Agreement dated June 15, 2016 by which the applicant has waived the rights conferred on it by clauses 8.6 and 8.7 of the JV Agreement. In the order, the Tribunal has erroneously proceeded on the basis that letter dated May 08, 2006 by which the Applicant exercised its option to sell its shareholding tantamount to transfer. Further, as a matter of fact LAND did not discharge its obligation to acquire the shares which applicant held in Land Del Infrared Pvt. Ltd. and which the applicant had offered for sale as per clauses 8.6 and 8.7 of the J....
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....t further submits that the Tribunal's order in the case of DCIT v. SAK Industries Pvt. (2005) 1 SOT 798 also supported its submission that the receipt was capital in nature. However, contrary to the facts on record, the Tribunal has held that there was no breach of any agreement in the present case. In fact, there was a clear violation of clauses 8.6 and 8.7 of the JV agreement as, firstly LAND had transferred its shareholding in Land Del Infrared Pvt. Ltd. to Amtek Inc. USA and secondly, it was not willing to honour its obligation to purchase shares held by the applicant in the JV Company when it exercised its rights on May 08, 2006. It has also observed that, in the present, case, the applicant, has not given up its rights of first purchase of shares on account of perceived/alleged violation of agreement, firstly, this is contrary to the finding given by the Tribunal while dealing with its argument on cost of acquisition being indeterminate, where it was held that the capital asset which gave rise to the capital gains in the present case was right of first refusal. This is notwithstanding the fact that the JV agreement did not confer on it any right of first refusal. 2.6 T....
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....amalgamated or taken over by a third party, the other JV partner has the option of either purchasing all the shares of the partner getting amalgamated or taken over. It is found that LAND was taken over by a company incorporated in USA during financial year (FY) 2006-07. Subsequent to the takeover, the applicant exercised the option stated in para 8.6 of the JVA and sold its 50% shares in the JVCo to M/s. Land Instrument International Ltd., UK for Rs. 2,10,75,000/-. While deciding the appeal, we have referred to clause 2.2, 2.3, 3.1, 4.1,8.6 and 8.7.1 of the JVA dated 27.05.2005. We refer here to para 7.5.1, 7.5.2, 7.5.3, 7.5.4 and 7.5.5 of the impugned order of the Tribunal. Also we have referred to the waiver agreement dated 15.06.2006 between the applicant and LAND. We refer here to para 7.5.6 of the impugned order of the Tribunal. Due to the takeover of "LAND" by a USA- based company, the applicant exercised its option to sell all the shares of the JVCo to the other partner. Section 2(14) defines that 'capital asset' means property of any kind held by an assessee, whether or not connected with his business or profession. Further, we have mentioned at para 7.7 of the ....
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....lkart Bros., (1971) 82 ITR 50 (SC), Master Construction Co. P. Ltd. v. State of Orissa, AIR 1966 SC 1047, Karam Chand Thapar & Bros. (Coal Sales) Ltd. v. State of U.P. (1976) Tax LR 1921, 1927 (SC) and CCE v. ASCU Ltd., (2003) 9 SCC 230, 232. In fact, not a single error in the impugned order has been pointed out by the applicant. What the applicant wants is a review of the order passed by the Tribunal. The Tribunal is a creature of the statute. The Tribunal cannot review its own decision unless it is permitted to do so by the statute. The Hon'ble Supreme Court has held in Patel Narshi Thakershi v. Pradyumansinghji Arjunsinghji [AIR 1970 SC 1273] that the power to review is not an inherent power. It must be conferred by law either specifically or by necessary implication. It is a settled law that the Tribunal has no power to review its order in the garb of section 254(2) of the Act as held in CIT v. Globe Transport Corpn. [1992] 195 ITR 311 (Raj) (HC), CIT v. Roop Narain Sardar Mal [2004] 267 ITR 601 (Raj) (HC), CIT v. Devilal Soni [2004] 271 ITR 566 (Raj) (HC), Jainarain Jeevraj v. CIT [1980] 121 ITR 358 (Raj.) (HC), Prajatantra Prachar Samiti v. CIT [2003] 264 ITR 160 (Oris....