AI Drafter 
TaxTMI 
TaxTMI 
2022 (12) TMI 1389
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....eedings before her in the correct perspective which is arbitrary and unjustified. 3 That the assessment order having been passed by the Assessing Officer after due application of mind and taking into consideration the various replies and material on record, the action resorted to by the Principal Commissioner of Income Tax is unwarranted and uncalled for. 4 That the issues in respect of investment in bonds u/s 54EC as well as sale of shares was scrutinised by the Assessing Officer in depth and as such revising the order passed by the Assessing Officer is arbitrary and unjustified. 5 That the Ld. Principal Commissioner of Income Tax has failed to carry out any enquiry during the course of revisionary proceedings in respect of the issues being raised by her which is mandatory and as such the order passed by her is arbitrary and unjustified. 6 That the order of Commissioner of Income tax is erroneous, arbitrary, opposed to the facts of the case and is unsustainable in law." 2. In the facts of the present case, the assessee returned an income of Rs.19,44,840/- in the return filed on 22.07.2016. Subsequently, the assessee filed a Revised return on ....
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....nce was placed on the concept of the British Calendar month which is a unit of month and not a lunar month as ld. PCIT has held. Referring to the relevant provision, it was his submission that the statutory mandate on "6 months" as interpreted in various orders of the ITAT it was argued that it would show that "the view taken by the AO is a correct view". Attention was invited to the following decisions : 1. Alkaben B. Patel vs. ITO43 Taxmann.com 333(Ahm) 2. Dr. (Smt.) Sujatha Ramesh vs. CBDT87 Taxmann.com 228 (Kar) 3. Kartick Chandra Mondal vs. PCIT113 Taxmann.com 586 (Kol) 4.3 Accordingly, it was his submission that on this first issue, on which there is a notice to the assessee, the arguments on behalf of the assessee are that due enquiries have been made by the AO which are supported by the legal position thereon. The order passed by the ld. PCIT on the other hand, it was submitted, is based on a selective reading of the MOU and ignoring the legal position on the facts. 5. Addressing the direction of the ld. PCIT on the second issue addressed vide para 6 to 6.2 at pages 6 to 9 of the order, it was his submission that on this issue, no notice was....
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....e assessment records reveals that you have claimed and were allowed exemption of Rs. 41,00,000/- u/s 54EC of the Act in respect of long term capital gain earned on sale of shares held in a company in terms of MOU signed in August 2015 among the concerned parties. From perusal of the MOU dated 26.08.2015, it was seen that there were certain conditions in that MOU and the clause 16 of the same, which is relevant here is reproduced as under: "on receipt of the full and final consideration by transferers, the transferees will be the 100% share holders in the company and will have 100% management control over the company" As per clause 16 of the MOU, on receipt of full and final consideration by the transferors, the transferee would have the 100% shareholding and management control over the transferor company. The whole amount of Rs. 1,72,05,600/- was received by you vide cheque dated 24.12.2015. 3. As per record, it is seen that a sale deed (for the sale of the shares) was executed on 30 December 2015 between you and the company signed by you and the transferee company, however payment in respect of the shareholding was received through cheques on 24.12.2015.....
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....hase and taking over of company management on 28/08/2015. As per Clause 5 of the Moil which read as under: "The effective date of takeover by transferred will be after payment of 100% payment and transfer of 100 shares by the transferors on or before 25 th February 2016 and all liabilities and claims for the past period will be responsibility of transferors" 2) Clause 16 of the MoU reads as under: "On receipt of the full and final consideration by transferors, the transferees will be the 100% shareholder in the company and will have 100% management control over the company." The same is conditional on various conditions which have to be fulfilled and cannot be read in isolation. It has to be read in conjunction to the other clause of MoU. 3) Clause 17 of MoU reads as under: "On receipt of the full and final payment, the transferors will execute transfer deeds and sale deed duly witnessed handover all original share certificates, all statutory records, all original property title documents and all accounting records to transferees. The transferor will make entries in the statutory register and record all its minutes in the minute....
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....he order. It was reiterated that on the basis of these examinations, after raising due queries, the AO passed the order. Accordingly, it was his submission that the impugned order is based on a selective reading of the documents and ignoring the fact that the issue already stood enquired into by the AO. In view of these submissions it was his prayer that the order may be quashed on this issue. Para 7.2.11 addressing the said issue it was his prayer that in the absence of a Show Cause Notice, which fact has been verified by the Ld. CIT DR from the record, the impugned order qua the findings/directions given in paras 6 to 6.2 may be held to be non-maintainable. Without prejudice to the above primary argument, it was also his submission that this issue also stood fully enquired into by the A.O. Hence, the impugned order it was his prayer may be quashed in toto. 7.3 In the said backdrop addressing the documents available on record, attention was invited to copy of the Show Cause Notice dated 16.04.2018 issued by the AO available at pages 1,2 and 3. Referring to the specific query raised on this issue which was also flagged in the CASS, it was highlighted the AO required the assessee....
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....otice was issued, ld. AR further submitted that Para 4 of this very document would show that on the second issue also it is a matter of fact that the AO had fully enquired into this aspect. This fact is evident from the reply of the assessee on record. This issue, it was submitted, is even referred to by the AO in the first notice issued to the assessee which has been referred to at page 3 para 3 of the Paper Book on record. The replies of the assessee on the said issue are also available on record, however, reverting back to the first issue on which the ld. PCIT has show caused the assessee which is under consideration referring to page 35 which is again raised through ITBA portal, it was highlighted that the AO specifically required the assessee to give the following information: "Please refer to assessment proceeding pending in your case for the A.Y. 2016-17. You are requested please furnish detail of shares purchased and sold and exemption claimed u/s 54F and 54EC in respect of long term capital gain." 7.5 The assessee's reply to the said notice, it was submitted is available at page 37 dated 23.11.2018. It was submitted that it is after considering the reply co....
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....longer hold good. 5. The facts of the case are the assessee claimed and was allowed exemption of Rs. 41,00,000/- u/s 54EC of the Act in respect of long term capital gain earned on sale of shares held in a company in terms of MOU signed in August 2015 among the concerned parties. From perusal of the MOU dated 26.08.2015, it is seen that there were certain conditions in that MOU and the clause 16 of the same, which is relevant here is reproduced as under: "on receipt of the full and final consideration by transferers, the transferees will be the 100% share holders in the company and will have 100% management control over the company" As per clause 16 of the MOU, on receipt of full and final consideration by the transferors, the transferee would have the 100% shareholding and management control over the transferor company. The whole amount of Rs. 1,72,05,600/- was received by you vide cheque dated 24.12.2015. As per record, it is seen that a sale deed (for the sale of the shares) was executed on 30 December 2015 between the assessee and the company signed by the assessee and the transferee company, however payment in respect of the sharehol....
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....aw therein support the order passed by the Assessing Officer and the prayer of the assessee in the present proceedings. Specific attention was invited to the following case laws : 1. CIT vs. Max India Ltd. 295 ITR 282(SC) 2. CIT vs. Sunbeam Auto Ltd. 332 ITR 167 (Delhi) 3. ITO vs. D.G. Housing Projects Ltd. 343 ITR 239 (Delhi) 4. Director of Income Tax vs. Jyoti Foundation 357 ITR 388 (Delhi) 5. CIT vs. Kwality Steel Suppliers Complex 395 ITR 1 (SC) 8. The ld. CIT-DR carrying the Bench through the Show Cause Notice issued by ld. PCIT submitted that in the facts of the present case, the action of the ld. PCIT is fully justified on facts. It was his submission that clause No.16 relied upon by the ld. PCIT was the relevant clause and it is not a case that clause-5 and 17 relied upon by the assessee have been ignored. It was argued that there is a finding of fact that the total payment was finally received by the assessee on 24.12.2015. Hence, the period for claiming exemption expired on 24.06.2016. It was submitted that these facts on record are not in dispute. The final payment was received on 24.12.2015 and the REC Bonds were purchased....
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....ssment order dated 26.12.2018, no case has been made out for exercise of power. The Revisionary Authority has held it to be a case where proper enquiries were not carried out and direction has been given to the AO to pass a fresh order after making necessary enquiries/investigations. We find on a reading of the reasons set out in the impugned order that the interpretation so put by the ld. PCIT on the reading of the MOU is an incorrect and incomplete reading of the documents on record. It is a matter of fact that apart from executing a sale deed there was various other formalities pending which were still required to be fulfilled before the transaction could be said to be completed. Article 5 and Article 17 has specifically been pressed into service on behalf of the assessee. Considering the replies on the queries raised based on the documents relied upon the AO has taken a plausible view on the facts. The Ld. PCIT, on the other hand, has not taken into consideration the full facts and has failed to bring out the error in the order and has also not cared to address the legal position as to why the interpretation given by the AO to the six month period can be said to be incorrect. O....
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.... Revisionary Authority to set out the error and the prejudice caused by the assessment order. The Revisionary Authority necessarily needs to see the records as available to the AO. The order cannot be passed on mere whims and fancies. 11.1 We also deem it appropriate to address the arguments advanced by the Ld. CIT DR who has argued that by setting aside no prejudice can be said to be caused to the assessee as the assessee has full right to make his / her submissions before the AO in the next round anyway. We find such an argument is not acceptable. The assessee's time cannot be taken for granted as the assessee appearing before the tax authorities cannot be made to run around appearing again and again to justify the claim which anyway was allowable and has been allowed in the first round by the AO. The Authorities functioning under the Income Tax Act as Government Authorities are performing State functions for the benefit of the citizens. They no longer can continue to work with the mind set of administering the law applicable to colonials. This style of functioning may have been prevalent unquestioningly during colonial times under a foreign rule, however, it is no longer acce....
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....yment through 12141 Bank, Sec. 35-4 & RTGS in Saving Bank A/c No. G3220133917 with on 24-12-2015. 2. That henceforth the seller or his representatis e will not have any claim, right or interest in the above said shares or the income thereof or accretion thereto. The said buyer can gift/sell/mortgage/alienate in any manner. This Deed of Sale has been executed in witness thereof: Witness: I 2 GSSARIN So 186 FF SECTORIAL Nagina Chinni (SELLER) readily Holiday Resorts L LOGARI (BUYER). Ruang (R.X. Garg) sco. 837-232/22. A Ality's Shary Managing Director à¤à¤¾à¤°à¤¤à¥€à¤¯ गैर नà¥à¤¯à¤¾à¤¯à¤¿à¤• à¤à¤• सौ रà¥à¤ªà¤¯à¥‡ 5 100 00100 Rs. 100 ONE HUNDRED RUPEES à¤à¤¾à¤°à¤¤ INDIA 100100100100 100100100100 100100- INDIA NON JUDICIAL चंडीगढ़ (संघ राजà¥à¤¯à¤•à¥à¤·à¥‡à¤¤à¥à¤°) CHANDIGARH (U.T.) 736240 1 CONFIRMATION DEED F This Deed of Confirmation is executed at Cha....
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.... Village Nalwa, Teh. Kasauli, Distt. Solan (H.P.) incorporated on August 10, 1998. WHEREAS the Ex Directors of the KRPL and Ex shareholders of KRPL namely, 1. Capt. Pushpinder Singh Chimni S/o Late S.D.S. Chimni, r/o H. No. 1635, Sector 36D, Chandigarh 2. Amrita Chimni w/o Capt. Pushpinder Singh Chimni, r/o #1635, Sector 36, Chandigarh A 3. Rajdeep Chimni s/o P. S. Chimn, R/o H. No. 1635, Sector 36D, Chandigarh 4. Nagina Chimni d/o Capt. Pushpinder Singh Chimni, r/o #1635, Sector 36, Chandigarh 5. 6. Vijay Ahluwalia w/o Late Capt. N. P. Ahluwalia, r/o 661, Sector 18A, Chandigarh ARein 51 Anil Ahluwalia S/o Late Capt. N. P. Ahluwalia, R/o 2 Orchard Mains, Woking. Surrey, United Kingdom GU22 CET, presently at H.No. 561, Sec. 333, Chandigarh (NRI) 7. Anureet Ahluwalia W/o Sh. Anil Ahluwalia, R/o 2 Orchard Mains, Woking. Surrey, United Kingdom GU22 CET, presently at H.No. 661, Sec.33B, Chandigarh (NRI) 8. Arun Ahluwalia S/o Late Sh. Shanti Prakash Ahluwalia, r/o 417, Ang Mo Kio Avenue 2 Horrizon Garden, Singapore (NRI) 9. Arun Ahluwalia & Mrs. Shoba Ahluwalia w/o Sh. Arun Ahluwalia, /o 417, ....
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....TT SOLAN HP OFFICE: VILLAGE NALWAKASOLI CIN: U55101HP1998PTC021679 E-MAIL ID: [email protected] RESORTS LIMITED LIST OS SHAREHOLDERS AS ON 31.03.2016 L/F Shareholder's Name 28 PICCADILY HOLIDAY Father's/ Husband Name Type of No. of Shares Shares per Amount Address Share N/A Equity 149280 10 M-10 SECOND FLOOR GREATER KAILASH PART-I NEW DELHI 29. Smt. JAI SHREE D/O SHANKAR Equity 350 10 HOUSE NO. 18 SHARMA DYAL SHARMA SECTOR-3 CHANDIGARH-160009 30. Sh. SHAM SUNDER SHARMA S/O KEDAR NATH Equity 370 10 HOUSE NO. 18 SHARMA SECTOR-3 CHANDIGARH-160009 TOTAL 150,000 Sr. Date of No. of Transferor's LIST OF SHARES TRANSFER HELD DURING THE F.Y 2015-16 Folio No. Transferee's Folio No. of Share no registration 1. of transfer Equity Name Shares 04/01/2016 15599 Capt. of Name Transferee Tranfer No. Transferor 01 Piccadily 28 124 Puspinder Singh Chimni Holiday Resorts 2. 04/01/2016 25607 Vijay 08 Ahluwalia Limited Piccadily Holiday 28 125 Resorts Limited 3.....