Smt. Renu Saraf (L/H of Late Shambhu Nath Saraf), Barakar V. J.C.I.T Rg - 1,Asansol, Asansol

ITA 1147/KOL/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1571 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 01-09-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 09-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P B PARAMANICK JCITSRDR
• Assessee Lawyers: S S GUPTA
• Keywords: Capital asset; Cost of acquisition; Fair market value
• Section: 143(3)

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO.1146-1147/KOL/2013 ASSESSMENT YEAR:2009-10 RAM GOPAL SARAF SARAF HOUSE STATION ROAD, P.O. BARAKAR-713324 [ PAN NO.AKOPS 6713 Q ] SMT. RENU SARAF L/H LT. SHAMBHU NATH SARAF, SARAF HOUSE STATION ROAD, P.O. BARAKAR-713324 [ PAN NO.AJEPS 6708 A ] / V/S . / V/S . JCIT, RANGE-1, SAHANA APARTMENT LOWER CHELIDANG , ASANSOL-713304 JCIT, RANGE-1, SAHANA APARTMENT LOWER CHELIDANG , ASANSOL-713304 /APPELLANT .. /RESPONDENT /BY ASSESSEE SHRI S.S. GUPTA, FCA ! /BY RESPONDENT SHRI P.B. PARAMANICK, JCIT,SR-DR $ /DATE OF HEARING 15-06-2017 $ /DATE OF PRONOUNCEMENT 30-08-2017 /O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- BOTH APPEALS BY DIFFERENT ASSESSEE ARE DIRECTED AG AINST THE DIFFERENT ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS)-ASANSOL OF EVE N DATED I.E. ON 18.03.2013. ASSESSMENT WAS FRAMED BY JCIT, RANGE-1, ASANSOL U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HI S ORDERS DATED 01.12.2011FOR ASSESSMENT YEAR 2009-10. ITA NO.1146-47/KOL/2013 A.Y. 2009-10 R.G. SARAF/RENU SARAF VS. JCIT, RG-1, ASL. PAGE 2 SHRI S.S. GUPTA, LD. AUTHORIZED REPRESENTATIVE APPE ARED ON BEHALF OF ASSESSEE AND SHRI P.B. PARAMANICK, LD. DEPARTMENTAL REPRESENTATI VE REPRESENTED ON BEHALF OF REVENUE. 2. SINCE COMMON GROUNDS ARE INVOLVED IN BOTH THE AP PEALS OF ASSESSEE EXCEPT FIGURES, THEREFORE, THEY WERE HEARD TOGETHER AND AR E BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. WE CONSID ER ASSESSEES APPEAL IN ITA NO.1146/KOL/2013 AS LEAD CASE. GROUNDS RAISED BY ASSESSEE PER ITS A PPEAL ARE AS UNDER:- 1. FOR THAT, IN VIEW OF FACTS AND CIRCUMSTANCES OF THE CASE AND SUBMISSION MADE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS), ASANSOL E RRED IN LAW AS WELL AS ON FACTS IN UPHOLDING THE FINDINGS OF LD. ASSESSING OFFICER THAT FOR PURPOSE OF ASSESSING CAPITAL GAINS, ONLY THE PORTION OF SALE PRICE OF RS . 10/- OUT OF SETTLED PRICE OF RS. 825/- PER SHARE OF BATELI TEA CO. LTD, SHOULD BE CO NSIDERED AS SALE VALUE AND THE BALANCE OF RS. 815/- PER SHARE SHOULD BE THE INCOME FROM OTHER SOURCES AND HIS SUCH CONCLUSION IS BASED ON SURMISES AND CONJECTURES AND CONTRARY TO THE FACTS & MATERIAL ON RECORD. 2. FOR THAT, WITHOUT PREJUDICE TO THE ABOVE, IN VIE W OF FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT (A) WAS WRONG AND UNJUSTIFIED IN CONF IRMING THE CONTENTION OF THE ASSESSING OFFICER THAT CONSIDERATION AMOUNT OF RS. 8426285/- ( 8529675-103390 ) IS FOR OTHER MATTERS SPECIFIED IN TERMS OF SETTLEMENT CHAR GEABLE TO TAX UNDER THE HEAD ' INCOME FROM OTHER SOURCES ', AS AGAINST THE CLAIM OF THE INCOME AS LONG TERM CAPITAL GAIN TAXABLE @ 10% U/S 112(1), IGNORING THE FACT TH AT ASSET/OBLIGATION AS ALLEGED TO HAVE BEEN TRANSFERRED/ MET BY THE APPELLANT IN FAVO UR OF TRANSFEREE AND SUCH TERMS OF SETTLEMENT ALSO DO NOT RECORD ASSUMPTIONS AS ALLEGE D. 3. FOR THAT, IN VIEW OF FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT CA) ERRED IN HOLDING THAT THE TRANSFER OF SHARES WAS IN CONSIDER ATION OF FAMILY ARRANGEMENT WHEREAS IN FACT, IT IS THE OTHER WAY ROUND, IGNORIN G THE FACT THAT APPELLANT WAS NOT RELATED WITH THE DALMIA GROUP. 4. FOR THAT, IN VIEW OF FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT (A) OUGHT TO HAVE HELD IN FAVOUR OF THE ASSESSEE THAT NO INCOME IS CH ARGEABLE TO TAX AS INCOME FROM OTHER SOURCES EVEN IF IT IS ASSUMED THAT SHARES WER E TRANSFERRED BY WAY OF FAMILY ARRANGEMENT WHICH THE APPELLANT HAS DENIED. 5. FOR THAT, WITHOUT PREJUDICE TO ABOVE, LD. A.O. A S WELL AS CIT (A) ERRED ON FACTS AS WELL AS IN LAW IN HOLDING THAT PRICE OF SHARES OF R S. 10/- ADOPTED FOR TRANSFER OF JOINT HOLDING OF SHARES BETWEEN TWO CONSTITUENTS OF DALMI A GROUP E.G. B.L.DALMIA GROUP & G.G.DALMIA GROUP, FOR SMALL NUMBER OF SHARES OF B ATELI TEA CO., SHOULD BE THE FAIR MARKET VALUE FOR ASSESSMENT OF CAPITAL GAINS I N THE HANDS OF APPELLANT. 6. FOR THAT, IN VIEW OF FACTS AND CIRCUMSTANCES OF THE CASE, LOWER AUTHORITIES ERRED ON FACTS AS WELL AS IN LAW IN ACCEPTING THE TERMS OF S ETTLEMENT IN PART ONLY FOR SHARE ITA NO.1146-47/KOL/2013 A.Y. 2009-10 R.G. SARAF/RENU SARAF VS. JCIT, RG-1, ASL. PAGE 3 PRICES OF OTHER TWO COMPANIES AND REJECTING THE SHA RE PRICE MENTIONED FOR TRANSFER OF SHARES OF BATELI TEA CO. 7. FOR THAT, IN VIEW OF FACTS AND CIRCUMSTANCES OF THE CASE, THE ASSESSING OFFICER BE DIRECTED TO TREAT RS. 8426285/- AS INCOME FROM LONG TERM CAPITAL GAINS TAXABLE U/S 112(1) @ 10% AS THE SAME IS DIRECTLY AND EXCLUSIVEL Y LINKED WITH SALE OF SHARES OF BATELI TEA CO. LTD. AND NO OTHER ASSET WAS TRANSFER RED OTHER THAN THE SHARES IN CONTENTION. 8. FOR THAT, WITHOUT PREJUDICE TO THE ABOVE, LD. CI T(A) WAS UNJUSTIFIED IN IGNORING THE FACT THAT THE APPELLANT DID NOT TRANSFER ANY OTHER ASSET OTHER THAN SHARES FOR WHICH HE RECEIVED CONSIDERATION OF RS. 825/- PER SHARE FOR S UCH TRANSFER. 9. FOR THAT, WITHOUT PREJUDICE TO THE ABOVE, LD. CI T(A) WAS WRONG AND UNJUSTIFIED IN NOT APPRECIATING THE FACT THAT ADEQUACY OF PRICE OF SHARES AGREED BETWEEN TRANSFEROR AND TRANSFEREE CANNOT BE QUESTIONED FOR LEVY OF CAP ITAL GAINS TAX. 10. FOR THAT, ORDER OF LD. CIT (APPEALS) IS OTHERWI SE BAD ON FACTS AS WELL AS IN LAW. 11. FOR THAT, THE APPELLANT CRAVES LEAVE TO ADD, SU BSTITUTE, ALTER OR WITHDRAW ANY GROUND OR GROUNDS BEFORE OR AT THE TIME OF HEARING. 3. GROUND NO. 1 TO 9 ARE INTER-RELATED AND THEREFOR E BEING TAKEN UP TOGETHER. THE ISSUE IN ALL THE INTER-RELATED GROUNDS OF APPEAL OF ASSESSEE IS THAT LD. CIT(A) ERRED IN CONFIRMING THE ORDER OF ASSESSING OFFICER BY TREATI NG THE SUM OF 84,26,285/- UNDER THE HEAD INCOME FROM OTHER SOURCE INSTEAD OF CAPI TAL GAINS. 4. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IN TH E PRESENT CASE IS AN INDIVIDUAL AND HAS SHOWN ITS INCOME UNDER THE HEAD LONG TERM CAPI TAL GAIN AND INCOME FROM OTHER SOURCES. BEFORE COMING TO THE SPECIFIC ISSUE IT IS IMPORTANT TO UNDERSTAND THE BACKGROUND OF THE CASE IN BRIEF AS DETAILED BELOW. 4.1 THE SHARES OF THREE COMPANIES WERE HELD BY THE DIFFERENT GROUPS OF FAMILIES. THE NAME OF THREE COMPANIES STANDS AS UNDER:- 1 M/S BATELI TEA CO. LTD. (BETELI) 2 NEW TERAI TEA CO. LT. (NEW TERAI) 3 BELGACHI TEA CO. LTD. (BELGACHI) THERE WERE VARIOUS DISPUTES AMONG THE VARIOUS FAMIL Y GROUPS IN RESPECT OF THE ABOVE STATED COMPANIES. THE DISPUTES WERE MAINLY WITH REG ARD TO THE CONTROL OVER THE ITA NO.1146-47/KOL/2013 A.Y. 2009-10 R.G. SARAF/RENU SARAF VS. JCIT, RG-1, ASL. PAGE 4 COMPANIES VIZ A VIZ SHAREHOLDING IN THE COMPANIES. THE DISPUTES AMONG THE SHAREHOLDERS WERE PENDING AT VARIOUS LEVELS IN THE COURTS OF LAW. 4.2 TO MITIGATE THE DISPUTES A DEED OF SETTLEMENT W AS PREPARED WHICH WAS FILED BEFORE THE HONBLE SUPREME COURT. AS PER THE DEED O F SETTLEMENT, THE SHARES WERE TRANSFERRED AMONG THE VARIOUS GROUPS OF THE SHAREHO LDERS OF THE ABOVE STATED COMPANIES AT THE PRICE AS AGREED IN THE DEED OF SET TLEMENT. THE WHOLE IDEA OF TRANSFERRING THE SHARES AMONG THE GROUPS OF SHAREHO LDERS WAS TO ACQUIRE CONTROL IN THE ABOVE-STATED COMPANIES BY THE GROUP OF RESPECTIVE S HAREHOLDERS. THE SHARES OF BATELI TEA COMPANY LTD. WERE TRANSFER RED AMONG THE GROUP OF SHAREHOLDERS AT DIFFERENT PRICE IN PURSUANCE TO THE DEED OF SETTLEMENT. THE NECESSARY DETAILS FOR THE TRANSFER OF SHARES AMONG THE VARIOU S GROUPS OF SHAREHOLDERS OF BATELI TEA COMPANY LIMITED STAND AS UNDER:- A] INTER-SE TRANSFER BETWEEN DALMIA GROUP:- SELLER PURCHASER NO. OF SHARES RATE AMOUNT REMARKS B.L. DALMIA GROUP G.G.DALMIA GROUP 36401 115 4186115 B.L. DALMIA GROUP G.G.DALMIA GROUP 11473 115 1319395 G.G.DALMIA GROUP G.G.DALMIA GROUP OF 5795= 2898 10 289080 TOTAL 50772 5 534490 AVERAGE PRICE PER SHARE FOR SALE BY INTER SE TRANSF ER 109.01 BETWEEN DALMIA GROUP B] SALE OF SHARES BY SARAF GROUP TO GG.DALMIA GROUP AS PER TERMS OF SETTLEMENT AGREED ON 20.03.2008 SELLER PURCHASER NO.OF SHARES RATE AMOUNT REMARKS B.K.SARAF GROUP G.G.DALMIA GROUP 23869 625 14918125 N.L.SARAF GROUP G.G.DALMIA 6027 500 3013500 PRAMOD KR. SARAF -DO- 5940 675 4009500 (SUB-GROUP OF N.L.SARAF) SANJAY KR. SARAF -DO- 5940 675 4009500 (SUB-GROUP OF N.L.SARAF) BISHNU KR. SARF -DO- 5856 675 3952800 (SUB-GROUP OF N.L.SARAF) TOTAL 47632 2 9903425 AVERAGE PRICE PER SHARE FOR SALE BY N.L.SARAF & R S. 627.80 B.K.SARAF GROUP ITA NO.1146-47/KOL/2013 A.Y. 2009-10 R.G. SARAF/RENU SARAF VS. JCIT, RG-1, ASL. PAGE 5 C] SALE OF SHARES BY R.G. SARAF GROUP & M.L. SARAF GROUP TO G.G.DALMIA GROUP SELLER PURCHASER NO. OF SHARES RATE AMOUNT REMARKS R.G.SARAF G.G.DALMIA GROUP 24099 825 19881675 M.L.SARAF G.G.DALMIA GROUP 2 4250 825 20006250 TOTAL 48349 39887925 AVERAGE PRICE ER SHARE FOR SALE BY R.G.SARAF & 825.00 M.L. SARAF GROUP NET AVERAGE PRICE OF SALE OF SHARES OF BATELI TEA C OMPANY 513.28 NOTE : THE ISSUE IN THE INSTANT CASE LIMITED TO THE BATELI TEA COMPANY LIMITED, THEREFORE THE FACTS OF THIS COMPANY HAS ONLY BEEN N ARRATED. NOW COMING TO THE SPECIFIC ISSUE, THE ASSESSEE WAS HOLDING 10339 SHARES OF BATELI TEA CO. LTD WHICH WERE TRANSFERRED TO GG DALMIA GROUP F OR RS. 825.00 PER SHARE. ACCORDINGLY THE ASSESSEE WORKED OUT THE LONG TERM C APITAL GAIN ON THE SALE OF SHARES OF BATELI TEA COMPANY LIMITED AS DETAILED UNDER:- ON SALE OF 10339 SHARES OF BATELI TEA CO. LTD. SALE PRICE RS.85,29,675.00 LESS: COST OF ACQUISITION OF 10339 SHARES RS. 1, 58,046.94 LTCG. RS .83,71,628.06 HOWEVER, THE AO DURING ASSESSMENT PROCEEDINGS OBSER VED THAT THE PRICE FIXED IN THE DEED OF SETTLEMENT FOR THE TRANSFER OF SHARES IS NO T LIMITED FOR THE PRICE OF SHARE ONLY BUT IT ALSO INCLUDES OTHER OBLIGATIONS SUCH AS WITH DRAWAL OF THE PENDING CASES IN THE COURT OF LAW. ACCORDINGLY THE AO ALSO OBSERVED THAT AS PER THE DEED OF SETTLEMENT THAT THERE WAS DISTRIBUTION OF VARIOUS PROPERTIES A MONG THE SHAREHOLDERS BUT NO VALUE WAS ASSIGNED TO SUCH PROPERTIES. 4.3 THE AO ALSO OBSERVED FROM THE DEED OF SETTLEMEN T THAT THE SHARES OF BATELI TEA CO. LTD. WERE ALSO TRANSFERRED AMONG THE GROUP OF S HAREHOLDERS AT DIFFERENT RATES AS DISCUSSED IN THE PRECEDING PARAGRAPHS. THE AO ALSO OBSERVED THAT THE SHARES OF BATELI TEA COMPANY LTD. WERE ALSO TRANSFERRED BY THE G.G D ALMIA GROUP TO ANOTHER G.G DALMIA GROUP FOR RS.10/- PER SHARE AS WELL. AS SUCH , THE AO FOUND THAT THERE IS NO CONSISTENCY IN FIXING THE SALE PRICE OF SHARES FOR BATELI TEA CO. LTD. ITA NO.1146-47/KOL/2013 A.Y. 2009-10 R.G. SARAF/RENU SARAF VS. JCIT, RG-1, ASL. PAGE 6 IN VIEW OF THE ABOVE, AO WAS OF THE VIEW THE PRICE OF THE SHARE IN THE INSTANT CASE ALSO INCLUDED THE COMPENSATION FOR RELINQUISHING THE RI GHT OVER THE PROPERTIES OF COMPANY IN CONSEQUENT TO THE TRANSFER OF SHARES. THUS, SUCH COMPENSATION RECEIVED BY THE ASSESSEE ON THE TRANSFER OF SHARES CANNOT BE TREATE D AS A LTCG RATHER IT REFLECTS THE INCOME FROM OTHER SOURCES. THUS FINALLY THE AO HAS TAKEN THE SALE PRICE OF BAT ELI TEA CO. LTD AS RS.10/- PER SHARE AND THE BALANCE AMOUNT OF RS. 815 (825-10) WAS TREA TED AS INCOME FROM OTHER SOURCES AGGREGATING TO RS. 84,26,285.00 ONLY 5. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE L D. CIT(A). THE ASSESSEE BEFORE LD. CIT(A) SUBMITTED THAT THE INCOME AROSE O N THE TRANSFER OF SHARE IN PURSUANCE TO THE DEED OF SETTLEMENT WAS APPROVED BY THE HON'BLE SUPREME COURT. THEREFORE, THE INCOME FROM THE TRANSFER OF SHARES C ANNOT BE TREATED AS INCOME FROM OTHER SOURCE. THE ASSESSEE IN SUPPORT OF HIS CLAIM HAS RELIED ON THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF CIT. VS. GEORGE HINDERSON & CO. LTD. 66 ITR 622 (SC). THE ASSESSEE FURTHER SUBMITTED THAT AFTER EXECUTING THE DEED OF SETTLEMENT AMONG THE SHAREHOLDERS, THE ASSETS OF THE ASSESSEE-COMPANY WE RE REVALUED WHICH WORKED OUT AT 881.23 AGAINST THE SALE PRICE OF THE SHARE OF 825 PER SHARE. THE ASSESSEE ALSO SUBMITTED THAT THE VALUATION OF THE IMPUGNED SHARES PRIOR TO THE REVALUATION OF ASSET WAS VERY LOW ON ACCOUNT OF LITIGATION WHICH WAS PEN DING IN THE COURT OF LAW. SO THE VALUATION PRIOR TO THE SETTLEMENT DEED OF IMPUGNED SHARES CANNOT BE A BASIS FOR DETERMINING THE VALUE OF THE IMPUGNED SHARE. 5.1 HOWEVER, LD. CIT(A) FROM THE ORDER OF AO AS WEL L AS THE SUBMISSION OF ASSESSEE OBSERVED THAT THERE WAS LOT OF VARIATION I N THE SALE PRICE OF THE SHARES. IN SOME CASES, THE SHARES WERE TRANSFERRED AT 10/- PER SHARE. THE TRANSFER OF SHARE WAS NOT CARRIED OUT THROUGH STOCK EXCHANGE AND THEREFOR E THE MARKET PRICE OF THE SHARES WERE NOT AVAILABLE. NO DETAILS OF WHATSOEVER HAS BE EN FURNISHED BY THE ASSESSEE FOR ANY OTHER TRANSACTIONS FOR THE SALE OF SHARES OF IM PUGNED COMPANY BETWEEN THE INDEPENDENT PARTIES WITHIN THE REASONABLE TIME WHEN THE SHARES WERE TRANSFERRED BY THE ASSESSEE. ITA NO.1146-47/KOL/2013 A.Y. 2009-10 R.G. SARAF/RENU SARAF VS. JCIT, RG-1, ASL. PAGE 7 LD. CIT(A) FURTHER OBSERVED THAT THE DEED OF SETTL EMENT AMONGST THE SHAREHOLDERS WAS COMPLEX AND IT WAS NOT LIMITED TO THE TRANSFER OF SHARES BUT ALSO INVOLVED THE CONSIDERATION FOR VARIOUS IMMOVABLE AND MOVABLE PRO PERTIES. THE DEED OF SETTLEMENT AMONGST THE SHAREHOLDERS WAS ENTERED IN ORDER TO MI TIGATE THE DISPUTES WHICH WERE PENDING IN THE COURT OF LAW. IN VIEW OF THE ABOVE, LD. CIT(A) WAS OF THE VIEW THAT THE ABNORMAL VALUES ADOPTED IN VALUATION OF SHARES SHOU LD BE IGNORED UNTIL AND UNLESS THESE ARE SUPPORTED ON THE BASIS OF JUSTIFIED AND R EASONABLE BASIS. THEREFORE, LD. CIT(A) DISREGARDED THE SUBMISSION OF ASSESSEE AND U PHELD THE ORDER OF AO. BEING AGGRIEVED BY THIS ORDER OF LD. CIT(A) ASSESSE E CAME IN SECOND APPEAL BEFORE US. 6. BEFORE US LD. AR FILED PAPER BOOK WHICH IS RUNNI NG PAGES FROM 1 TO 66 AND ALSO SUBMITTED WRITTEN SUBMISSION WHICH IS REPRODUC ED UNDER:- 1) FURTHER TO OUR SUBMISSION AND SUPPLEMENTARY SUBM ISSION MADE, THE ASSESSEE FURTHER SUBMITS THAT VALUE FOR CAPITAL ASSET AS MEN TIONED IN THE AGREEMENT OF SALE CANNOT BE SUBTRACTED BY VALUE OF THE PROPERTY ISSUED BY THE DVO U/S 55A OF INCOME TAX AT, 1961 OR BY THE VALUE AT WHICH IT IS SOLD BY SOME OTHER PERSONS. RELIANCE IS ALSO PLACED ON THE DECISION OF HON'BLE DELHI HIGH COURT REPORTED IN (2009) 309 ITR 240 (DEL) 2) LD. AO HAS NOT GIVEN ANY BASIS FOR ADOPTING VALU E OF SHARES OF BATELI TEA CO. AT RS.10/- FOR COMPUTATION OF CAPITAL GAIN WHIL E THE SAME SHARES WERE SOLD BY THE ASSESSEE AT RS.825/- PER SHARES. LD. AO FAIL ED TO CONSIDER THE FOLLOWING UNDISPUTED FACTS BROUGHT ON RECORD BY THE ASSESSEE; I) IT HAS BEEN SPECIFICALLY MENTIONED IN TERMS OF S ETTLEMENT FILED WITH HON'BLE SUPREME COURT THAT SALE OF SHARES BY THE ASSESSEE T O G.G. DALMIA GROUP SHALL BE @ RS.825/- PER SHARES. THERE IS NO AMBIGUITY IN THIS REGARD. II) THERE IS NOTHING ON RECORD WHICH CAN SUGGEST TH AT PRICE OF RS.825/- PER SHARE BARGAINED BY THE ASSESSEE WAS ON ACCOUNT OF A NY OTHER ASSET TRANSFERRED BY THE ASSESSEE TO DALMIA GROUP. ASSETS MENTIONED I N SCHEDULE N TO TERMS OF SETTLEMENT WERE RECEIVED BY THE R.G.SARAF GOUP I N TERMS OF FAMILY SETTLEMENT DULY EXECUTED ON 22.01.1994. THERE IS NO PROPERTY IN THE SAID LIST ITA NO.1146-47/KOL/2013 A.Y. 2009-10 R.G. SARAF/RENU SARAF VS. JCIT, RG-1, ASL. PAGE 8 WHICH WAS OWNED BY DALMIA GROUP BUT RECEIVED BY R.G . SARAF GROUP IN PURSUANCE OF TERMS FILED BEFORE HON'BLE SUPREME COU RT. III) LD. AO HAS SIMPLY PRESUMED THAT SALE CONSIDERA TION OF RS810/- PER SHARE MIGHT BE FOR MEETING OTHER OBLIGATION. NATURAL JUST ICE DEMANDS THAT NO ADVERSE VIEW SHOULD BE DRAW MERELY ON THE BASIS OF SUSPICIO N. TERMS OF SETTLEMENTS WERE DULY FILED BEFORE LD. AO ANY DIVISION OF PROPE RTY, IF ANY, MADE BETWEEN DIFFERENT GROUPS WAS PROPERTIES OWNED BY THEM AND N OT BY THE COMPANY. IV) THE ASSESSEE, SHRI R.G.SARAF OR SHAMBHU NATH SA RAF, DENIES TO HAVE ANY FAMILY RELATION WITH DALMIA GROUP 3) THE ASSESSEE PUT ON RECORD THE OBJECTION OF THE ASSESSEE THAT THE COMPANIES WHOSE SHARES WERE SOLD BY THE ASSESSEE AT EXORBITAN T PRICES ARE UNKNOWN ENTITIES. THE COMPANY WHICH IS PAYING DIVIDEND AND ISSUING BONUS SHARES CANNOT BE ANY UNKNOWN ENTITY. OBSERVATIONS ARE BASE D MERELY ON PRESUMPTION. 4) LD. AO HAS MENTIONED IN PARA 6 OF THE ORDER THAT SHARES OF BATELI TEA CO. WERE SOLD BY DIFFERENT GROUPS AT DIFFERENT RATES AS SUMMARIZED BELOW:- A] INTER-SE TRANSFER BETWEEN DALMIA GROUP:- SELLER PURCHASER NO. OF SHARES RATE AMOUNT REMARKS B.L. DALMIA GROUP G.G.DALMIA GROUP 36401 115 4186115 B.L. DALMIA GROUP G.G.DALMIA GROUP 11473 115 1319395 G.G.DALMIA GROUP G.G.DALMIA GROUP OF 5795= 2898 10 289080 TOTAL 50772 5 534490 AVERAGE PRICE PER SHARE FOR SALE BY INTER SE TRANSF ER 109.01 BETWEEN DALMIA GROUP B] SALE OF SHARES BY SARAF GROUP TO GG.DALMIA GROUP AS PER TERMS OF SETTLEMENT AGREED ON 20.03.2008 SELLER PURCHASER NO.OF SHARES RATE AMOUNT REMARKS B.K.SARAF GROUP G.G.DALMIA GROUP 23869 625 14918125 N.L.SARAF GROUP G.G.DALMIA 6027 500 3013500 PRAMOD KR. SARAF -DO- 5940 675 4009500 (SUB-GROUP OF N.L.SARAF) SANJAY KR. SARAF -DO- 5940 675 4009500 (SUB-GROUP OF N.L.SARAF) BISHNU KR. SARF -DO- 5856 675 3952800 (SUB-GROUP OF N.L.SARAF) TOTAL 47632 2 9903425 ITA NO.1146-47/KOL/2013 A.Y. 2009-10 R.G. SARAF/RENU SARAF VS. JCIT, RG-1, ASL. PAGE 9 AVERAGE PRICE PER SHARE FOR SALE BY N.L.SARAF & B.K.SARAF GROUP C] SALE OF SHARES BY R.G. SARAF GROUP & M.L. SARAF GROUP TO G.G.DALMIA GROUP SELLER PURCHASER NO. OF SHARES RATE AMOUNT REMARKS R.G.SARAF G.G.DALMIA GROUP 24099 825 19881675 M.L.SARAF G.G.DALMIA GROUP 2 4250 825 20006250 TOTAL 48349 39887925 AVERAGE PRICE ER SHARE FOR SALE BY R.G.SARAF & 825.00 M.L. SARAF GROUP NET AVERAGE PRICE OF SALE OF SHARES OF BATELI TEA C OMPANY 513.28 FROM THE PERUSAL OF ABOVE CHART, IT IS CLEAR THAT S ARAF GROUP HAS NOT TRANSFERRED SHARES OF BATELI TEA CO. AT BELOW 500/- TRANSFER OF SHARES BETWEEN G.G.DALMIA GROUP A ND B.L. DALMIA GROUP IS THEIR INTERNAL MATTER AND THE ASSESSEE IS NOT EXPECTED TO KNOW THE REASONS FOR ACCEPTING LOWER SALE PRICE OF SHARE S BY OTHER GROUP. THE ASSESSEE IS UNABLE TO UNDERSTAND THE BASIS OF A DOPTING VALUE OF RS.10/- PER SHARE BY LD. AO WHICH IS THE PRICE FOR INTERNAL TRANSFER OF SHARES BETWEEN DALMIA GROUP FOR ONLY 2898 SHARES. INSTEAD OF INVESTIGATING SHARES OF UNKNOWN GROUP OF SHARES OF VERY SMALL NUMBER OF 2898 SHARES AT RS.10/- BY DALMIA GR OUP, LD. AO WAS NOT JUSTIFIED IN TAKING ADVERSE VIEW AGAINST THE ASSESSEE. MOREOVER, TRANSFER OF SHARES BETWEEN G.G.DALMIA GROUP WAS ONLY FOR 2898 SHARES (I.E. 50% OF SHARES OF 5796) WHILE TRANSFER OF SHARES BY SARAF GROUP WAS FOR SUBSTANTI AL BLOCK QUANTITY. INTERNAL TRANSFER OF SMALL QUANTITY OF SHARES BETWEEN DALMIA GROUP CA NNOT BE A BENCHMARK OR YARDSTICK FOR SELLING OF SHARES BY THE ASSESSEE OR ADOPTING S AME VALUE FOR ASSESSMENT OF CAPITAL GAINS BY LD. AO. IF LOOK ON THE BALANCE SHEET OF TH E COMPANY FIELD WITH ROC AFTER TRANSFER OF SHARES, IT WILL LOOK OUT THAT LEASE HOL D LAND HELD BY THE COMPANY HAVE BEEN REVALUED BY A SUBSTANTIAL AMOUNT OF RS.188,784,797/ - IN FYS 2009-10 AND 2011-11 E.G. BY 118,607,527/- AND 707,61,080/- RESPECTIVELY RAISING THE BOOK VALUE OF THE SHARES BY RS.881.23. THIS SIGNIFIES THAT COMPANYS BOOK VALUE OF ASSET WAS VERY VERY LOW IN COMPARISON TO ITS MARKET VALUE FOR ONLY ONE ASSETS E..G. LEASEHOLD LAND. THEREFORE, THERE CANNOT BE ANY REASON TO DOUBT ON P RICE OF SHARES SOLD BY ASSESSEE WHICH ONLYRS.825/- PER SHARE. ITA NO.1146-47/KOL/2013 A.Y. 2009-10 R.G. SARAF/RENU SARAF VS. JCIT, RG-1, ASL. PAGE 10 THE ASSESSEE DID NOT DERIVE ANY BENEFIT BY SHOWING ACTUAL SALE VALUE RECEIVED BY CHEQUE AS INCOME FROM CAPITAL GAINS AS HE HAS NOT C LAIMED ANY EXEMPTION. BALANCE SHEET OF THE ASSESSEE WILL SHOW THAT THEY HAVE NOT TRANSFERRED ANY OTHER ASSET. IT IS WELL SETTLED THAT HEAD OF INCOME CANNOT BE CHANGED BY LD AO MERELY ON PRESUMPTION, IF AN INCOME CANNOT BE ASSESSED UNDER ANY OTHER HEAD, SAM E COULD BE ASSESSED AS OTHER SOURCE. IN CASE OF ASSESSEE, IT IS CRYSTAL CLEAR TH AT NO ASSET OTHER THAN SALE OF SHARES HAS BEEN MADE BY ASSESSEE. THEREFORE, CORRECT HEAD OF I NCOME SHOULD BE INCOME FROM CAPITAL GAIN, AS SHARES HAVE BEEN HELD SINCE ON OR BEFORE 1974 AS INVESTMENT. 6.1 LD. AO AS ACCEPTED SALE PRICE DISCLOSED FOR SHA RE OF OTHER TWO COMPANIES, WHILE REJECTING SALE PRICE OF BATELI TEA CO. WHILE ALL SALE OF SHARES WERE COVERED BY SIMILAR TERMS OF SETTLEMENT. IN THIS WAY, LD. AO WA S NOT JUSTIFIED IN ACCEPTING TERMS OF SETTLEMENT IN PART FOR TWO COMPANIES AND DRAWING AD VERSE VIEW IN CASE OF BATELI TEA CO., MERELY ON SURMISES AND CONJECTURE. RELIANCE IS PLACED ON THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF TARA DEVI GOENKA VS. CIT 122 ITR 14 (CAL), WHERE IT HAS BEEN HELD THAT AO IS NOT JUSTIFIED IN DISCARDING OTHER PART WHILE ACCEPTING EXPLANATION FOR ONE PART. IT IS JUDICIOUSLY WELL SE TTLED THAT PRICE MENTIONED FOR TRANSFER OF SHARES CANNOT BE BIFURCATED. THIS WILL BE CLEAR FROM THE GIST OF SEVERAL CASE LAWS MENTIONED BELOW. IN THE CASE OF MAHARANI USHADEVI V S. CIT REPORTED IN 131 ITR 445 (MP) IT WAS HELD THAT:- CONTROLLING INTEREST IS INCIDENCE OF SHARE HOLDING AND HAS NO INDEPENDENT EXISTENCE. THEREFORE ENTIRE CONSIDERATION WAS REQUI RED TO BE CONSIDERED FOR THE PURPOSE OF CAPITAL GAINS IN THE HANDS OF THE ASSESS EE SAME VIEW WAS FOLLOWED IN THE SUBSEQUENT CASE OF C. R. RAJENDERA VS. CIT (20020) 125 TAXMAN 55, WHEREBY IT WAS HURLED THAT:- GROSS SALE PROCEEDS WITH REFERENCE TO SALE OF SHAR ES HELD BY ASSESSEE IN CERTAIN COMPANIES ARE TO BE TAKEN INTO CONSIDERATIO N FOR COMPUTING CAPITAL GAINS. IN A SIMILAR CASE OF THE JURISDICTIONAL HIGH COURT AS REPORTED IN 166 ITR 477 THE LD. MEMBERS OF THE BENCH OBSERVED THAT :- IT APPEARS TO US THAT THE CONTROLLING INTEREST ATT ACHED TO THE SAID BLOCK OF SHARES CANNOT BE CONSIDERED SEPARATELY FROM THE SHA RES THEMSELVES. EACH SHARE REPRESENTS A VOTE IN THE MANAGEMENT OF THE COMPANY CONTROLLING INTEREST IS ITA NO.1146-47/KOL/2013 A.Y. 2009-10 R.G. SARAF/RENU SARAF VS. JCIT, RG-1, ASL. PAGE 11 THEREFORE INEXTRICABLY ATTACHED TO THE BLOCK OF THE SHARES AND CANNOT FORM A SEPARATE ASSET BY ITSELF SECTION 48 WHICH PRESCRIBES THE METHOD OF COMPUTING CAPITAL GAINS STATES THAT:- THE INCOME CHARGEABLE UNDER THE HEAD CAPITAL GAINS SHALL BE COMPUTED BY DEDUCTING FROM THE FULL VALUE OF CONSIDERATION RECE IVED OR ACCRUING AS A RESULT OF THE TRANSFER OF THE CAPITAL ASSET. THERE IS ONLY ONE MATERIAL ASSET, AND THAT IS THE SHARES OF GACL, THIS ASSET MAY CONTAIN WITHIN I T MANY SUBSIDIARY RIGHTS, PROFITS AND PRIVILEGES WHICH WOULD FOLLOW TO THE BU YER AS AN INSEPARABLE CONTENT ALONG WITH THE TRANSFER OF THE MATERIAL ASS ET. WHATEVER CONSIDERATION IS RECEIVED OR ACCRUES IS BY VIRTUE OF THE TRANSFER OF SHARES AND NOT BY DIFFERENTIATED SUBSIDIARY RIGHTS WHICH ARE NEITHER FUNGIBLE NOR SEPARATELY TRADABLE. THUS, IT IS ABUNDANTLY CLEAR THAT THE ACTION OF THE AO OF ARTIFICIALLY SPLITTING THE VALUE OF CONSIDERATION RECEIVED IS NOT TENABLE ON LOGICAL GROUNDS AND ALSO IN THE LIGHT OF THE JUDGMENTS QUOTED ABOVE. 7. ON THE OTHER HAND, LD. DR SUBMITTED THAT THE DEE D OF SETTLEMENT INDEED WAS SUBMITTED BEFORE HON'BLE SUPREME COURT BUT IT WAS N OT VIEWED BY THE HON'BLE SUPREME COURT. THEREFORE, IT IS INFERRED THAT NO JU DGMENT AS SUCH WAS DELIVERED BY THE HON'BLE SUPREME COURT WITH REGARD TO VALUATION OF S HARES. LD. DR DREW OUR ATTENTION ON PAGE 101 OF DEED OF SETTLEMENT AND SUBMITTED THA T THE VALUE OF SHARES FOR THE PURPOSE OF TRANSFER WAS NOT LIMITED ONLY FOR THE CO NSIDERATION OF SHARES BUT ALSO IT EXTENDED TO OTHER CONSIDERATION SUCH AS RELINQUISHM ENT OF RIGHT, WITHDRAWAL OF PENDING LITIGATION AND TO ENABLE THE D.G.DALMIA GRO UP TO GET THE MUTATION OF SILIGURI LAND. THE DEED OF SETTLEMENT WAS SUBJECT TO FULFILL MENT OF SEVERAL CONDITIONS ENUMERATED IN VARIOUS CLAUSES OF THE DEED OF SETTLE MENT. LD. DR FURTHER SUBMITTED THAT VALUATION OF SHARES WAS DETERMINED IN THE CASE OF ASSESSEE AFTER CONSIDERING THE FUTURE RIGHTS OVER VARIOUS IMMOVABLE AND MOVABLE PR OPERTIES. HE, FINALLY SUBMITTED THAT THE CONSIDERATION RECEIVED BY THE ASSESSEE FOR THE TRANSFER OF SHARES WERE NOT LIMITED FOR THE SHARES CONSIDERATION BUT ALSO IT IN CLUDES OTHER FACTORS AS DISCUSSED ABOVE. LD. DR VEHEMENTLY RELIED ON THE ORDER OF AUT HORITIES BELOW. ITA NO.1146-47/KOL/2013 A.Y. 2009-10 R.G. SARAF/RENU SARAF VS. JCIT, RG-1, ASL. PAGE 12 8. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD; INCLUD ING THE JUDICIAL PRONOUNCEMENTS CITED AND PLACED RELIANCE UPON. THE ISSUE IN THE IN STANT CASE RELATES TO THE DETERMINATION OF THE SALE PRICE OF THE SHARES WHICH WERE TRANSFERRED BY THE ASSESSEE IN PURSUANCE TO DEED OF SETTLEMENT AMONGST VARIOUS SHA REHOLDERS. THE AO WAS OF THE VIEW THAT PRICE DETERMINED FOR THE TRANSFERRED OF S HARES WERE NOT ACTUAL PRICE OF SHARES BUT IT WAS FIXED FOR OTHER CONSIDERATION AS WELL. A CCORDINGLY, AO FOUND THAT THE SHARES WITH THE SAME COMPANY WERE ALSO TRANSFERRED AT RS.1 0/- PER SHARE AMONGST OTHER SHAREHOLDERS. HOWEVER, THE ASSESSEE TRANSFERRED THE SHARES HELD BY HIM TO OTHER SHAREHOLDERS AT 825/- PER SHARE. THUS, THE AO TREATED THE SUM OF RS . 815/- PER SHARE AS CONSIDERATION FOR OTHER FACTOR AND ACCORDINGLY, SAME WAS TREATED AS INCOME FROM OTHER SOURCES. THE VIEWS TAKEN BY THE AO WAS SUBSEQ UENTLY CONFIRMED BY LD. CIT(A). 8.1 INDEED, SHARES WERE TRANSFERRED AT A VALUE OF R S.815/- PER SHARE AND ACCORDINGLY THE INCOME WAS OFFERED UNDER THE HEAD CAPITAL GAIN S. IT IS ALSO UNDISPUTED FACT THAT DEED OF SETTLEMENT WAS DULY SUBMITTED BEFORE THE HO N'BLE SUPREME COURT AND THE HON'BLE SUPREME COURT WAS PLEASED TO DIRECT AS UNDE R:- 1. THE SUBSEQUENT APPLICATIONS FOR IMPLEADMENT ARE ALLOWED. 2. LEAVE GRANTED IN ALL THE 3 SLPS BEING SLP(C)NO.8 299 OF 2007. SLP(C) NO.11528 OF 2007 AND SLP(C) NO.11544 OF 2007. 3. THE JUDGMENT & ORDER DATED 1.12.2005 PASSED BY T HE COMPANY LAW BOARD AND THE IMPUGNED JUDGMENT PASSED BY THE HIGH COURT OF KOLKATA DATED 16.3.2007 AND 2.7.2007 ARE SET ASIDE. 4. ALL THE THREE APPEALS ARE DISPOSED OF IN TERMS O F THE TWO TERMS OF SETTLEMENT DATED 20.3.2008 & THE TERMS OF SETTLEMENT DATED 6.4 .2008 WHICH HAVE ALREADY BEEN FILED AS FAMILY SETTLEMENT BEFORE THIS COURT. 5. ALL INTERIM ORDERS ARE VACATED. 6. THE BOARD OF DIRECTORS OF BATELI TEA CO. LTD., T HE NEW TERAI ASSOCIATION LTD & BELAGACHI TEA CO. LTD., SHALL STAND RECONSTIT UTED IN ACCORDANCE WITH THE TERMS OF SETTLEMENT REFERRED TO ABOVE WITH IMMEDIAT E EFFECT. 7. THE DELAY IN HOLDING THE ANNUAL GENERAL MEETING OF BATELI TEA CO. LTD., THE NEW TERI ASSOCIATIONS LTD. & BELAGACHI TEA CO. LTD. IS CONDONED AND 3 ITA NO.1146-47/KOL/2013 A.Y. 2009-10 R.G. SARAF/RENU SARAF VS. JCIT, RG-1, ASL. PAGE 13 MONTHS TIME IS GIVEN TO HOLD THE GENERAL MEETING AN D COMPLY WITH ALL OTHER STATUTORY REQUIREMENTS. 8. ALL THE IMPLEADED PARTIES SHALL BE BOUND BY THE TERMS OF THE ORDER & THE THREE TERMS OF SETTLEMENT REFERRED TO HEREIN. 9. ALL UNDERTAKING PROVIDED IN THE THREE TERMS OF S ETTLEMENT SHALL BE DEEMED TO BE UNDERTAKING GIVEN BY THE CONCERNED PARTIES TO TH IS COURT AND ARE ACCEPTED BY THIS COURT. 10. THE STATUTORY BODIES ARE REQUESTED TO EXPEDITIO USLY DEAL WITH THE APPLICATIONS MADE TO THEM IN TERMS OF SETTLEMENT DA TED 20.3.2008 & 6.4.2008. 11. LIBERTY TO APPLY TO THIS COURT FOR FURTHER DIRE CTIONS AS AND WHEN NECESSARY. THUS, FROM THE ABOVE FACT, WE FIND THAT THE DEED OF SETTLEMENT WAS BINDING ON ALL THE PARTIES AND IN THE INSTANT CASE, THE SHARES WERE AC CORDINGLY TRANSFERRED AT A PRICE DETERMINED IN PURSUANCE TO DEED OF SETTLEMENT. WE A LSO FIND THAT THE AUTHORITIES BELOW HAVE TREATED THE INCOME OF RS.815/- PER SHARE AS INCOME FROM OTHER SOURCE. AT THIS JUNCTURE, WE FIND IMPORTANT TO PRODUCE SECTION 52 WHICH READS AS UNDER:- I NCOME FROM OTHER SOURCE . 56(1) INCOME OF EVERY KIND WHICH IS NOT TO BE INCLUDED F ROM THE TOTAL INCOME UNDER THIS ACT SHALL BE CHARGEABLE TO INCOME TAX UN DER THE HEAD INCOME FROM OTHER SOURCE , IF IT IS NOT CHARGEABLE TO INCOME-TAX UNDER ANY OF THE HEADS SPECIFIED IN SECTION 14, ITEMS A TO E A PLAIN LOOK AT THE ABOVE STATUTORY PROVISION MAKES IT CLEAR THAT THE INCOME WILL FALL UNDER THE HEAD INCOME FROM OTHER SOURCE IF IT IS NOT TAXABLE UNDER ANY OTHER HEAD INCOME SPECIFIED UNDER SECTION14 OF THE ACT. IN THE INST ANT CASE BEFORE US THE SHARES WERE TRANSFERRED AND THE CONSIDERATION FIXED AS PER THE DEED OF SETTLEMENT WAS INTRINSICALLY LINKED WITH THE IMPUGNED SHARES. THER EFORE, IN OUR CONSIDERED VIEW THE INCOME ON THE TRANSFER OF SUCH SHARES CAN ONLY BE T AXED UNDER THE HEAD CAPITAL GAINS . IN HOLDING SO, WE FIND SUPPORT AND GUIDANCE FROM THE JUDGMENT OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. MAHADEO RAM KUMAR (1987) 166 ITR 477 (CAL), WHEREIN IT WAS HELD AS UNDER:- THE CONTROLLING INTEREST ATTACHED TO THE BLOCK OF SHARES COULD NOT BE CONSIDERED SEPARATELY FROM THE SHARES THEMSELVES. EACH SHARE REPRESENTED A VOTE IN THE MANAGEMENT OF THE COMPANY AND THE SHARES PUT TOGETH ER FORMED A BLOCK AND AGGREGATED THE VOTES. THE SHARES WHICH WERE UTILISE D TO CONSTITUTE A BLOCK CARRIED THE VOTING RIGHTS IN A BLOCK AND THE CONTROLLING INTERE ST WHICH AROSE THEREBY WAS A PART AND PARCEL OF THE BLOCK OF SHARES. THE AMOUNT PAID BY THE GOVERNMENT WAS FOR THE ITA NO.1146-47/KOL/2013 A.Y. 2009-10 R.G. SARAF/RENU SARAF VS. JCIT, RG-1, ASL. PAGE 14 PURCHASE OF THE SAID SHARES IN A BLOCK WHICH CARRIE D ALONG WITH IT SUFFICIENT VOTES TO CONTROL THE COMPANY. WHAT WAS PAID FOR BY THE GOVER NMENT WAS THE BLOCK OF SHARES ITSELF WHICH CARRIED ALONG WITH IT THE CONTROLLING INTEREST AND EACH SHARE IN THE SAID BLOCK TO THE EXTENT IT CARRIED A VOTE CONTAINED IN IT A PART OF THE CONTROLLING INTEREST. THEREFORE, THE EXCESS AMOUNT WHICH WAS PAID FOR THE SHARES WAS PART OF THE PRICE OF THE SHARES THEMSELVES. THE TRIBUNAL THUS, ERRED IN HOLDING THAT THE EXCESS AMOUNT WAS PAID FOR A SEPARATE VALUABLE RIGHT, VIZ., THE CONTROLLING INTEREST. FROM THE AGREEMENT IT APPEARED THAT THE MAIN OBJECT OF THE SHAREHOLDERS, WHO HAD COMBINED WAS TO SELL THE SAID BLOCK OF SHARES AT TH E HIGHEST PRICE TO BE DETERMINED BY NEGOTIATION, ARBITRATION OR OTHERWISE. APART FROM N EGOTIATIONS WITH THE GOVERNMENT FOR SALE OF THE SHARES NO OTHER STEPS WERE TAKEN BY THE ASSESSEE AND THE OTHER SHAREHOLDERS TO OBTAIN CONTROL OF THAT COMPANY. IN ANY EVENT, THE MANAGEMENT OF THE SAID COMPANY HAVING BEEN TAKEN OVER BY THE GOVERNME NT FOR AN INDEFINITE PERIOD, IT WAS NOT OPEN TO THE ASSESSEE AND THE OTHER SHAREHOL DERS, EVEN THOUGH THEY ACTED IN CONCERT, TO TAKE OVER THE MANAGEMENT OF THE COMPANY . IN THAT VIEW THE SALE OF THE BLOCK OF SHARES BY THE ASSESSEE AND THE OTHER SHARE HOLDERS WAS DONE IN THE COURSE OF THEIR BUSINESS AND, THEREFORE, THE EXCESS AMOUNT RE ALISED FROM THE SAME HAD TO BE TREATED AS REVENUE RECEIPT IN THEIR HANDS. THUS, TH E AMOUNT RECEIVED BY THE ASSESSEE, WAS REVENUE RECEIPT IN THE HANDS OF THE ASSESSEE. IN THE CASE BEFORE US THE PRICE OF THE SHARES WAS D IRECTLY LINKED WITH THE SHARES ONLY. THEREFORE THE GAIN ARISING ON SUCH TRANSACTION IS T AXABLE UNDER THE HEAD CAPITAL GAINS. THE ALLEGATION OF LD. DR THAT OTHER PROPERT Y OF MOVABLE AND IMMOVABLE NATURE WERE ALSO EFFECTED ON THE TRANSFER OF SHARES BY THE ASSESSEE. HOWEVER, ON PERUSAL OF BALANCE-SHEET OF THE ASSESSEE WE FIND TH AT ONLY SHARES WERE TRANSFERRED AND THERE WERE NO TRANSFER OF ANY OTHER MOVABLE AND IMM OVABLE ASSET. IN THIS VIEW OF THE MATTER WE REVERSE THE ORDER OF LOWER AUTHORITIES. I N THIS REGARD WE DIRECT THE AO TO TREAT THE INCOME FROM THE TRANSFER OF SHARES UNDER THE HEAD CAPITAL GAIN. HENCE, THIS GROUND OF ASSESSEES APPEAL IS ALLOWED. 9. NEXT GROUND NO. 10 & 11 ARE GENERAL IN NATURE AN D DO NOT REQUIRE ANY SEPARATE ADJUDICATION. 10. IN THE ASSESSEEA APPEAL IS ALLOWED. COMING TO ITA NO.1147/KOL/2013 . 11. AS STATED EARLIER, THE ISSUE IN THIS YEAR IS SA ME AS THAT OF THE ITA NO.1146/KOL/2013 . THE ONLY DIFFERENCE IS THE AMOUNT INVOLVED. SINCE THE FACTS ARE EXACTLY IDENTICAL, BOTH PARTIES ARE AGREED WHATEVER VIEW TAKEN IN THE ABOVE APPEAL ITA NO.1146-47/KOL/2013 A.Y. 2009-10 R.G. SARAF/RENU SARAF VS. JCIT, RG-1, ASL. PAGE 15 (ITA NO.1146/KOL/2013) OF ASSESSEE MAY BE TAKEN IN THIS APPEAL OF ASSESSEE ALSO, WE HOLD ACCORDINGLY. 12. IN THE RESULT, BOTH THE APPEAL OF ASSESSEE STAND AL LOWED. ORDER PRONOUNCED IN OPEN COURT ON 30/08/2017 SD/- SD/- ((!) ($!) (S.S.VISWANETHRA RAVI) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER *DKP-SR.PS *+, - 30/08/2017 / KOLKATA / COPY OF ORDER FORWARDED TO:- 1. /ASSESSEE-RAM GOPAL SARAF/SMT. RENU SARAF, SARAF H OUSE STATION ROAD, P.O. BARAK AR-713324 2. ! /REVENUE-JCIT, RANGE-1, SAHANA APARTMENT LOWER CHE LIDANGA, ASANSOL-7133304 3. ++- . / CONCERNED CIT 4. . - / CIT (A) 5. /01 ((- , - / DR, ITAT, KOLKATA 6. 123 / GUARD FILE. BY ORD ER/ , /TRUE COPY/ SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO - ,