ACIT, Circle 12(1), Hyderabad V. Sanjay Goel, Secunderabad

ITA 1262/HYD/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82554 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 26-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Keywords: Capital asset
• Section: 54F; 54; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA.NO.1262/HYD/2014 ASSESSMENT YEAR 2007-2008 ACIT, CIRCLE 12(1) HYDERABAD. VS. MR. SANJAY GOEL SECUNDERABAD PAN ACKPG-9182-D (APPELLANT) (RESPONDENT) FOR REVENUE : MR. RAJAT MITRA FOR ASSESSEE : MR. K.C. DEVDAS DATE OF HEARING : 13.11.2014 DATE OF PRONOUNCEMENT : 19.11.2014 ORDER PER B. RAMAKOTAIAH, A.M. THIS REVENUE APPEAL IS AGAINST THE ORDER OF LD. CIT(A)-V DATED 06.11.2014 FOR THE A.Y. 2007-08. REV ENUE HAS RAISED ONLY ONE GROUND WHICH IS AS UNDER : THE LD. CIT(A) ERRED IN ALLOWING THE CLAIM OF EXEM PTION U/S. 54 OF THE ACT RESPECTFULLY FOLLOWING THE DECIS ION OF JURISDICTIONAL ITAT IN THE CASE OF CIT VS. DHURJATI GUPTA AND OTHER IN ITA.NO.664/HYD/2006 DATED 30.01.2008 WITHOUT TAKING INTO CONSIDERATION THAT THE DEPARTME NT HAS FILED APPEAL BEFORE THE HIGH COURT AGAINST THE ORDE R OF THE ITAT AND THE DECISION IS STILL PENDING. 2. BRIEFLY STATED, ASSESSEE IS AN EMPLOYEE OF M/S. GENPACT INDIA AND M/S. SIMON GARVES INDIA LIMITED A ND FILED RETURN OF INCOME AT RS.2,21,75,866 INCLUDING LONG T ERM CAPITAL GAINS OF RS.97,22,537 ON ACCOUNT OF SALE OF GENPACT SHARES AND OTHER SHARES AFTER CLAIMING DEDUCTION UNDER SEC TION 54F OF 2 ITA.NO.1262/HYD/2014 MR. SANJAY GOEL, SECUNDERABAD. HOUSE AT WHITEFIELD, BANGALORE FOR RS.1,00,81,573. IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3), A.O. DEN IED THE BENEFIT UNDER SECTION 54F ON THE REASON THAT ASSESS EES CAPITAL GAIN HAS ARISEN NOT BECAUSE OF SALE OF SHARES REGIS TERED IN INDIAN STOCK EXCHANGE AND ASSESSEE HAS NOT PAID SEC URITIES TRANSACTION TAX. DISTINGUISHING THE DECISION IN THE CASE OF CIT VS. DR. DHURJATI GUPTA AND OTHERS IN ITA.NO.664/HYD /2006 DATED 30.01.2009, A.O. DID NOT ALLOW DEDUCTION UNDE R SECTION 54F AGAINST THE PROFITS DERIVED FROM SALE OF ESOPS. LD. CIT(A) AFTER CONSIDERING THE RIVAL CONTENTIONS AND EXAMINI NG THE FACTS OF THE CASE, WAS OF THE OPINION THAT ASSESSEE IS EN TITLED FOR DEDUCTION UNDER SECTION 54F AND CONSIDERED THE DECI SION OF ITAT IN THE CASE OF DR. DHURJATI GUPTA (SUPRA) IN P ARA 7 OF HIS ORDER AND FINALLY CONCLUDED THAT ASSESSEE IS ELIGIB LE FOR DEDUCTION UNDER SECTION 54F OF THE ACT ON THE CAPIT AL GAINS ARISING ON SALE OF SHARES ACQUIRED THROUGH THE EMPL OYEE STOCK OPTIONS. REVENUE IS AGGRIEVED. 3. AFTER CONSIDERING THE RIVAL CONTENTIONS, WE DO NOT SEE ANY MERIT IN REVENUE APPEAL. AS CAN BE SEEN FRO M THE ORDER OF THE ASSESSING OFFICER, A.O. HAS ACCEPTED T HE CAPITAL GAINS ON SALE OF SHARES ACQUIRED THROUGH ESOPS. IT IS ALSO NOT IN DISPUTE THAT CAPITAL GAIN IS ASSESSABLE AS LONG TERM CAPITAL GAIN. ONCE THE SALE OF SHARES ACQUIRED THROUGH ESOP S WERE SOLD AND ARE TREATED AS CAPITAL ASSETS AND GAIN THE REON WAS ASSESSED AS LONG TERM CAPITAL GAIN, WE DO NOT SEE A NY REASON TO DENY THE DEDUCTION UNDER SECTION 54F. EVEN THOUGH L D. CIT(A) RELIED ON THE DECISION OF COORDINATE BENCH IN THE C ASE OF DR. DHURJATI GUPTA AND OTHERS (SUPRA) THE ISSUE DECIDED THEREIN IS NOT EXACTLY ON DEDUCTION UNDER SECTION 54F BUT WHET HER THE PROCEEDS ON SALE OF SHARES ACQUIRED THROUGH ESOPS H AVE TO BE 3 ITA.NO.1262/HYD/2014 MR. SANJAY GOEL, SECUNDERABAD. ASSESSED AS LONG TERM CAPITAL GAINS OR NOT. CONSIDE RING THE FACTS OF THE CASE AND THE HOLDING PERIOD, THE SHARE S SOLD WERE CONSIDERED TO BE HELD FOR LONGER PERIOD AND ARE ELI GIBLE TO BE COMPUTED UNDER LONG TERM CAPITAL GAINS ONLY. IN THI S CASE, THAT IS NOT THE ISSUE MADE OUT BY A.O. BE THAT AS IT MAY , SINCE LD. CIT(A) FOLLOWED THE COORDINATE BENCH DECISION OF IT AT, JUST BECAUSE THE SAME WAS NOT ACCEPTED BY REVENUE, WE CA NNOT HOLD OTHERWISE. SINCE THE ISSUE IS ALREADY COVERED IN FAVOUR OF ASSESSEE, THERE IS NO MERIT IN REVENUE APPEAL AND A CCORDINGLY, THE SAME IS DISMISSED. 4. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19.11.2014. SD/- SD/- (SAKTIJIT DEY) (B.RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 19 TH NOVEMBER, 2014 VBP/- COPY TO 1. ACIT, CIRCLE 12(1), 2 ND FLOOR, AAYAKAR BHAVAN, HYDERABAD. 2. MR. SANJAY GOEL, 5-2-134, 2 ND FLOOR, C/O. SUDHAKAR & CO. R.P. ROAD, SECUNDERABAD. 3. CIT(A)-V, HYDERABAD 4. CIT-I, HYDERABAD 5. D.R. ITAT B BENCH, HYDERABAD.