TaxTMI 
TaxTMI 
2022 (1) TMI 1052
X X X X Extracts X X X X
X X X X Extracts X X X X
....n ITA No.1557/Kol/2011 and ITA No.1431/Kol/2011 for the assessment year 2007-08. The revenue has raised the following substantial questions of law for consideration: (i) Whether on the facts and in the circumstances of the case, the Learned Tribunal erred in law in deciding the appeal in favour of the assessee that surplus amount of Rs. 31,33,05,072/- is covered an exchange under section 2(47) of the Income Tax Act as against long term capital gains under section 50B and section 2(42C) of the Income Tax Act? (ii) Whether on the facts and in the circumstances of the case, the Learned Tribunal erred in law in deleting the disallowance of Rs. 2,84,00,909/- being 60% of the aggregate expenditure incurred on running and maintenance of aircra....
X X X X Extracts X X X X
X X X X Extracts X X X X
....reme Court in the case of Exide Industries Ltd. Vs. Union Bank of India which has not yet been finally decided by the apex court? (vii) Whether on the facts and in the circumstances of the case, the Learned Tribunal erred in law in deleting the disallowance of expenditure in respect of earning dividend income & tax free interest on US 64 tax free bonds without appreciating the finding of the assessing officer who disallowed 0.5% of average investment by applying rule 8D of income tax rules and made disallowance of expenses under section 14A? (viii) Whether on the facts and in the circumstances of the case, the Learned Tribunal erred in law in deleting the addition on account of interest amounting to Rs. 3,80,69,705/- being 12% of intere....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s that the substantial questions of law no.(ii), (iii), (iv), (v), (viii), (ix), (x) and (xi) have been answered against the revenue in the revenue's appeal in the assessee's own case for the assessment year 2008-09 in ITAT No.34 of 2020 dated 16th December, 2021. Thus, following the said decision, the said questions of law are answered against the revenue. So far as the substantial question of law no.(vi) is concerned, we find that the Tribunal has remanded the matter for a fresh decision after taking note of the decision of the Hon'ble Supreme Court. Thus, we find that there is no question of law arising for consideration on the said issue and hence, the said question of law no.(vi) is rejected. So far as the substantial question of law ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r as defined under Section 2(47) of the Act and noted that in the assessee's case transfer is by way of exchange, that is, by issuance of preference shares and debentures in EIH Associated Limited. The Tribunal took note of the argument of the assessee with regard to computation of capital gains and found that there cannot be any controversy that each of the specified hotels is an undertaking and, therefore, constituted a long term capital asset. Further, the Tribunal took note that it is not in dispute that the transfer of the business undertaking as a going concern constitutes transfer of capital asset. Reliance was placed on the decision of the Hon'ble Supreme Court in the case of CIT vs. B.C. Srinivasa Setty, reported in (1981) 128 ITR....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e of the asset, proviso 2 to section 10(2)(vii) would ex facie be attracted. Where the person carrying on the business transfers the assets to a company in consideration of allotment of shares, it would be a case of exchange and not of sale, and the true nature of the transaction will not be altered, because for the purpose of stamp duty or other reasons the value of assets transferred is shown as equivalent to the face value of the shares allotted. A person carrying on business may agree with a company floated by him that the assets belonging to him shall be transferred to the company for a certain money consideration and that in satisfaction of the liability to pay that money consideration, shares of a certain face value shall be allotted....