Shri Sudhir J.Vaid, Ahmedabad V. The Dy.CIT.,(OSD)Range-1, Ahmedabad

ITA 132/AHD/2011

• Counselvise Citation: 13220514 RSA 2011
• Duration Of Justice: 3 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 24-03-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 19-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J P JHANGID
• Assessee Lawyers: HARDIK VORA

Judgement Text

, , , , C, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, C BENCH . .. . . .. . , !' !' !' !', , , , #$ %& #$ %& #$ %& #$ %& , , , , &' ( & &' ( & &' ( & &' ( & ' ' ' ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND TEJ RAM MEENA, ACCOUNTANT MEMBER) ITA NO.132/AHD/2011 [ASSTT.YEAR : 2002-2003] SUDHIR J. VAID DIRECTOR OF CONCORD BIOTECH LTD. 302, SAKAR-III, OPP: GUJARAT HIGH COURT AHMEDABAD. PAN : ABVPY 9184 E /VS. DCIT (OSD) RANGE-1, AHMEDABAD. ( (( (*+ *+ *+ *+ / APPELLANT) ( (( (,-*+ ,-*+ ,-*+ ,-*+ / RESPONDENT) .% / 0 &/ ASSESSEE BY : SHRI HARDIK VORA ( / 0 &/ REVENUE BY : SHRI J.P. JHANGID, SR.DR 2 / %3'/ DATE OF HEARING : 24 TH MARCH, 2014 456 / %3'/ DATE OF PRONOUNCEMENT : 04/04/2014 &7 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-VI, AHMEDA BAD DATED 20.12.2010 FOR THE ASSESSMENT YEAR 2002-03. ITA NO.132/AHD/2011 -2- 2. THE EFFECTIVE GROUND NOS.1 AND 2 OF THE APPEAL O F THE ASSESEE ARE AS UNDER: 1. THE LD. CIT(A) HAS GROSSLY ERRED BOTH ON FACTS AS ALSO IN LAW IN UPHOLDING THE ORDER OF THE AO TAXING THE SHORT TERM CAPITAL GAIN OF RS.1,58,49,600/- AND LONG TERM CAPITAL GAIN OF RS.1 ,04,30,739/- IN RESPECT OF THE CONVERSION OF 360000 PREFERENCE SHAR ES INTO 720000 EQUITY SHARES OF M/S.CONCORD BIOTECH LIMITED ON 5.8 .2001. 2. THE CIT(A) FAILED TO APPRECIATE THAT IF THIS WAS A CASE OF REGULAR ASSESSMENT, THE ASSESSEE WILL HAVE INCURRED CAPITAL LOSS AND CLAIMED DEDUCTION OF THE SAME BECAUSE THE EQUITY SH ARES ON 5.8.2001 HAD NEGATIVE VALUE; A FACT STATED BY THE ASSESSEE I N HIS LETTER TO THE AO ON 31.3.2001 BUT BECAUSE THIS WAS A CASE OF REAS SESSMENT, THE ASSESSEE CANNOT BE BETTER OFF, AND THEREFORE, CANNO T CLAIM THIS CAPITAL LOSS AND SHALL HAVE TO BE CONTENDED WITH N IL ADDITION I.E. NEITHER CAPITAL GAIN NOR CAPITAL LOSS AGAINST CAPIT AL LOSS. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THERE WAS NO DISPUTE WITH REGARD TO THE TAXABILITY OF CAPITAL GA INS AND ONLY DISPUTE IN THIS CASE IS REGARDING FACE VALUE OF THE SHARES TAK EN BY THE AO INSTEAD OF MARKET VALUE OF THE SHARES IN QUESTION. THE ASSE SSEE HAS CONVERTED 3,60,000 PREFERENTIAL SHARES INTO 7,20,000 EQUITY S HARES OF M/S.CONCORD BIOTECH LTD. DURING THE YEAR. HE SUBMITTED THAT ON LY THE MARKET VALUE OF THE SHARES COULD BE TAKEN INTO CONSIDERATION IN COM PUTING THE PROFITS AND NOT THE FACE VALUE OF THE SHARES, AND THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE WITH THE DECISION OF THE HONBLE KERALA HI GH COURT IN THE CASE OF P.S. RAJAN VS. ACIT, 263 ITR 279 (KER), AND ALSO WI TH THE DECISION OF THE HONBLE ANDHRA PRADESH HIGH COURT IN THE CASE OF [A ] MOTORS & GENERAL STORES VS. CIT, 66 ITR 701 (AP), WHICH WAS CONFIRME D BY THE HONBLE APEX COURT IN 66 ITR 692 (SC). THE LEARNED DR HAS OPPOSED THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE . HE SUBMITTED THAT THE DECISION OF THE HONBLE ANDHRA PRADESH HIGH COURT I N [A] MOTORS & GENERAL STORES VS. CIT (SUPRA) IS DISTINGUISHABLE O N FACTS, SINCE IT DOES NOT ITA NO.132/AHD/2011 -3- PERTAINED TO TRANSFER OF SHARES, BUT WITH REGARD TO SOME PROPERTY. HE RELIED ON THE ORDERS OF THE AO AND THE CIT(A). 4. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND HAVE PE RUSED THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT THE AO DID NOT HAVE THE BENEFIT OF THE DECISIONS OF THE HONBLE COURTS RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE. IN LIGHT OF THESE FACTS, WE ARE OF THE CONSIDERED VIEW THAT IT SHALL BE IN THE INTEREST OF JUSTICE TO RESTORE T HE ISSUE IN THE GROUNDS OF THE APPEAL OF THE ASSESSEE TO THE FILE OF THE AO WITH D IRECTION TO DECIDE THE SAME AFRESH IN ACCORDANCE WITH LAW, AND IN THE LIGH T OF THE DECISIONS OF THE HONBLE COURTS RELIED UPON BY THE LEARNED COUNSEL F OR THE ASSESSEE CITED SUPRA, AFTER DECIDING THE APPLICABILITY OF THESE DE CISIONS AND AFTER ALLOWING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. WE FURTHER DIRECT THAT THERE BEING NO CLEAR CUT FINDINGS ON THE ISSUE OF T HE DETERMINATION OF THE MARKET VALUE OF THE SHARES, THE SAME ALSO BE DETERM INED IN ACCORDANCE WITH LAW, AFTER PROVIDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. WE DIRECT ACCORDINGLY. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %& %& %& %& /T.R. MEENA) &' ( /ACCOUNTANT MEMBER ( .. /G.C. GUPTA ) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT.