TaxTMI 
TaxTMI 
2021 (7) TMI 759
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....red on the transfer of shares made did not represent long term capital loss. 3. That the learned CIT (A) in any case and without prejudice ought to have held that such a loss as suffered represents a loss which is an allowable business loss. 4. That the learned CIT (A) has misconceived the facts and has failed to appreciate that there being admittedly a transfer of shares made by the assessee company to HSIIDC, the transfer so made was made at market price. The finding of the learned CIT (A) that the transfer was not made at market price is misconceived and is based on no material. Nonetheless there was no justification not to have allowed the claim of long term capital loss suffered by the assessee. It is therefore prayed that it be held that the loss suffered ought to have been held as allowable and there was no justification to compute the loss at Nil. 3. Representatives of both the sides were heard at length. Case record carefully perused and with the assistance of the counsel we have considered the relevant documentary evidences brought on record in the light of rule 18 (6) of the ITAT Rules. 4. Briefly stated the facts of the case are that the assessee filed its r....
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....lotment of shares by the company M/s. GRPL would have taken much more time since the company had to apply for increase in share capital with the Registrar of Companies and after obtaining approval in the general body meeting of the company. 11. It was strongly contended that any delay in issue of shares would have resulted into cancellation of the land allotted and postponement of loan granted. The counsel continued stating that in such case entire amount incurred by the company on the project would have become zero and in turn the said company M/s. GRPL would have to pay HSIDC amount of loan availed from them with interest and penalty thereon. 12. On such a situation as mentioned above, in order to avoid delay resulting in such huge loss to the assessee company and other share holders, it was considered proper to bear this loss on transfer of shares to HSIDC and accordingly the assessee transferred 1288438 shares to HSIDC and simultaneously M/s. Unitech Holdings Limited also transferred 149026 to HSIDC. 13. Both the lower authorities have brushed aside the loss holding that the allotment of shares by M/s. GRPL to the assessee itself was wrong and against the agreement and, ther....
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....e (iv) or clause (v) shall apply to the transfer of a capital asset made after the 29th day of February, 1988, as stock-in- trade; (vi) any transfer, in a scheme of amalgamation, of a capital asset by the amalgamating company to the amalgamated company if the amalgamated company is an Indian company: (via) any transfer, in a scheme of amalgamation, of a capital asset being a share or shares held in an Indian company. by the amalgamating foreign company to the amalgamated foreign company, if- (a) at least twenty-five per cent of the shareholders of the amalgamating foreign company continue to remain shareholders of the amalgamated foreign company, and (b) such transfer does not attract tax on capital gains in the country, in which the amalgamating company is incorporated; (viaa) any transfer, in a scheme of amalgamation of a banking company with a banking institution sanctioned and brought into force by the Central Government under sub-section (7) of section 45 of the Banking Regulation Act, 1949 (10 of 1949), of a capital asset by the banking company to the banking institution. Explanation.-For the purposes of this clause,- (i) "banking company" shall have the same me....
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....nd "successor co-operative bank" shall have the meanings respectively assigned to them in section 44DB; (vicc) any transfer in a demerger, of a capital asset, being a share of a foreign company, referred to in the Explanation 5 to clause (i) of sub-section (1) of section 9, which derives, directly or indirectly, its value substantially from the share or shares of an Indian company, held by the demerged foreign company to the resulting foreign company, if (a) the shareholders, holding not less than three-fourths in value of the shares of the demerged foreign company, continue to remain shareholders of the resulting foreign company; and (b) such transfer does not attract tax on capital gains in the country in which the demerged foreign company is incorporated: Provided that the provisions of sections 391 to 39426 of the Companies Act, 1956 (l of 1956) shall not apply m case of demergers referred to in this clause; (vid) any transfer or issue of shares by the resulting company, in a scheme of demerger to the shareholders of the demerged company if the transfer or issue is made m consideration of demerger of the undertaking; (vii) any transfer by a shareholder, in a scheme ....
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....of clauses (viiac) and (viiad), - (a) "original fund" means a fund established or incorporated or registered outside India, which collects funds from its members for investing it for their benefit and fulfils the following conditions, namely: - (i) the fund is not a person resident in India; (ii) the fund is a resident of a country or a specified territory with which an agreement referred to in sub-section (1) of section 90 or sub-section (1) of section 90A has been entered into; or is established or incorporated or registered in a country or a specified territory as may be notified by the Central Government in this behalf; (iii) the fund and its activities are subject to applicable investor protection regulations in the country or specified territory where it is established or incorporated or is a resident; and (iv) fulfils such other conditions as may be prescribed; (b) "relocation " means transfer of assets of the original fund, or of its wholly owned special purpose vehicle, to a resultant fund on or before the 31st day of March, 2023, where consideration for such transfer is discharged in the form of share or unit or interest in the resulting fund to, - (i) share....
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....the 1st day of March, 1970; (ix) any transfer of a capital asset, being any work of art, archaeological, scientific or art collection, book, manuscript. drawing, painting, photograph or print, to the Government or a University or the National Museum, National Art Gallery, National Archives or any such other public museum or institution as may be notified by the Central Government in the Official Gazette to be of national importance or to be of renown throughout any State or States. Explanation. -For the purposes of this clause, "University" means a University established or incorporated by or under a Central, State or Provincial Act and includes an institution declared under section 3 of the University Grants Commission Act, 1956 (3 of 1956), to be a University for the purposes of that Act; (x) any transfer by way of conversion of bonds or debentures, debenture-stock or deposit certificates in any form, of a company into shares or debentures of that company; (xa) any transfer by way of conversion of bonds referred to in clause (a) of sub- section (1) of section 115AC into shares or debentures of any company; (xb) any transfer by way of conversion of preference shares of a....
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....rm or manner, other than by way of allotment of shares in the company; and (d) the aggregate of the shareholding in the company of the partners of the firm is not less than fifty per cent of the total voting power in the company and their shareholding continues to be as such for a period of five years from the date of the succession; (e) the demutualisation or corporatisation of a recognised stock exchange in India is carried out in accordance with a scheme for demutualisation or corporatisation which is approved by the Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), (xiiia) any transfer of a capital asset being a membership light held by a member of a recognised stock exchange in India for acquisition of shares and trading or clearing rights acquired by such member in that recognised stock exchange in accordance with a scheme for demutualisation or corporatisation which is approved by the Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992); (xiiib) any transfer of a capital asset or intangible asset by ....
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....n sells or otherwise transfers any capital asset or intangible asset to the company: Provided that- (a) all the assets and liabilities of the sole proprietary concern relating to the business immediately before the succession become the assets and liabilities of the company; (b) the shareholding of the sole proprietor m the company is not less than fifty per cent of the total voting power in the company and his shareholding continues to remain as such for a period of five years from the date of the succession: and (c) the sole proprietor does not receive any consideration or benefit, directly or indirectly, in any form or manner, other than by way of allotment of shares in the company; (xv) any transfer m a scheme for lending of any securities under an agreement or arrangement, which the assessee has entered into with the borrower of such securities and which is subject to the guidelines issued by the Securities and Exchange Board of India, established under section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992) or the Reserve Bank of India constituted under sub-section (1) of section 3 of the Reserve Bank of India Act, 1934 (2 of 1934)], in this r....
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....ection 10." 18. In our considered view when the statute has provided specific provisions then the same have to be construed strictly and must not extend beyond requirements of the language used. For this proposition we draw support from the decision of Hon'ble Supreme Court in the case of Gillanders Arbuthnot Company Ltd. Vs. CIT 76 ITR 160. 19. We further find that no adverse inference have been drawn by either of the lower authorities in so far as the value of share of the company M/s. GRPL as on the date of transfer is concerned. The valuation as given to the authorities is as under :- A= Book Value of Assets 213,51,04,932 L= Book Value of Specified Liabilities 244,60,77,552 A) Long Term Borrowings 111,29,95,033 B) Short term Borrowings 66,94,01,950 C) Trade Payable 6,66,88,486 D) Other Liabilities 59,69,92,083 PE= Total amount of paid up capital 18,65,00,000 PV= Paid Up value of shares 10 Formula (A-L) ---------------- * (PV) (PE) Thus, value of shares issued works out as under:- [213,51,04,932 (-) 244,60,77,552] &n....