TaxTMI 
TaxTMI 
2024 (3) TMI 1457
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...."PCIT"] in purported exercise of revisionary powers conferred by Section 263 of the Income Tax Act, 1961 ["Act"]. 2. As is evident from a reading of the impugned judgment rendered by the ITAT, the solitary issue which appeared to survive was with respect to the exemptions claimed under Section 54F of the Act and the long term capital gains obtained from the sale of shares of M/s Sundial Infotech Pvt. Ltd. 3. Doubting the correctness of the disclosures which were made, the PCIT appears to have undertaken an exercise to determine the fair market value. While doing so, it took note of the facts as emanating from the record and the contents whereof have been noticed in paragraph 5 of the judgment of the ITAT which reads as follows:- ....
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....interest of the revenue. In support of valuation of the shares on net assets value method, it was pointed out that land was taken at RS. 38,61,00,000/-, whereas the value of the land as per balance sheet was only Rs. 1,61,22,124/- and capital-work-in-progress was Rs. 1,09,54,963/- .The total value of fixed assets was thus Rs. 2,70,77,087/- in the books, whereas the fair market value of the land was Rs. 38,61,00,000/-. In support of such valuation, Valuation Report of Govt Approved Registered Valuer was also filed who has taken the value of land at Rs. 1,17,000/- per :sq. Mt." 4. It was this which ultimately led to the PCIT setting aside the Assessment Order dated 12 January 2015. However, and we find that the ITAT has found that the afor....
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....he following amounts namely ..............." The full value of consideration received or accruing cannot be substituted either by fair market value or otherwise at least in the assessment year 2012-13, because the provision of deeming fiction of substituting the FMV of shares has been brought by way of Section 50CA which has been introduced from w.e.f. 1.4.2018 i.e., from the A.Y. 2018-19, which provides that, where consideration received or accruing as a result of transfer of a capital assets being shares of a company is less than the fair market value determined in the manner as may be prescribed, then the value so determined shall be for the purpose of section 48 be deemed to be full value of consideration received or accrued as....
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.... has been arrived u/s 48, then only the issue of exemption u/s 54 or 54F or 54EC, etc. would apply. Thus, the full value of the consideration received from the transfer of shares by the assessee cannot be substituted either by holding that the fair market value is less or the fair market value is more. The phrase used is the full value of consideration received or accrued as a result of transfer of capital assets and nowhere the section or the Act provides that such full value of consideration receipt can be substituted except for deeming provision provided u/s 50C, 50CA and 50D. As held above, 50CA is not applicable the assessment year 2012-13 and therefore, we hold that Ld. PCIT could not under the law have tinkered with the amount of ful....
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....hen the resultant long term capital gain would be subjected to tax u/s 45. The statute then provides exemption from long term capital gain tax can be availed by an assessee, if he invests the long term capital gain in the manner given in section 54 to 54EC. First step is determination of long term capital gain and then only exemption of benefit of section 54 to 54EC is available. Here in this case the Ld. CIT is trying to hold that the long term capital gain shown by the assessee is more and therefore, deduction or exemption claimed u/s 54F has been inflated. This perhaps is not the correct approach, because first of all he has to give a definite finding as to why long term capital gain u/s 40A is not correct and then he can tinker with the....