DCIT, New Delhi V. M/s. Jindal Equipment Leasing & Consultancy Services Ltd, New Delhi

ITA 4474/DEL/2009

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0274 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 27-01-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 24-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J MISHRA
• Keywords: Capital asset; Transfer pricing; Cost of acquisition; Fair market value; Onus to prove; Capital Gains

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D DELHI BEFORE SHRI I.P. BANSAL AND SHRI K.G. BANSAL ITA NO. 4474(DEL)/2009 ASSESSMENT YEAR: 2006-07 DEPUTY COMMISSIONER OF M/S JINDA L EQUIPMENT LEASING & INCOME-TAX, CIRCLE 4(1), VS. CONSULTA NCY SERVICES LTD., NEW DELHI. 37, NAJAFGARH ROAD, NEW DELHI. PAN-AAACJ0091P (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI J. MISHRA, CIT DR RESPONDENT BY : SHRI K. SAMPATH, ADVOCATE ORDER PER K.G. BANSAL: AM THE ONLY QUESTION RAISED BY THE REVENUE IN THIS AP PEAL IS WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(APPEALS) ERRED IN DELETING THE ADDITION OF RS. 6,06,27,500/-, BEING UNDISCLOSED SALE CONSIDERATION OF SHARES, IN THE TRANSACTIONS WHICH HAVE BEEN USED AS A DEVISE TO PASS UNDUE MONETARY BENEFIT DIRECTLY OR INDIRECTLY TO THE PERSONS RELATED TO THE COMPANY? 2. THE FACTS ARE THAT THE ASSESSEE HAD PURCHASE D SHARES OF NALWA SPONGE IRON LTD. (NSIL) IN THE PREVIOUS YEAR RE LEVANT TO ASSESSMENT YEAR 2003-04 @ RS. 10/- PER SHARE. THE BOOK VALUE O F THE SHARE ON THE DATE ITA NO. 4474(DEL)/2009 2 OF PURCHASE WAS RS. 31.80. 2,50,000 SHARES OF THIS COMPANY WERE SOLD IN THIS YEAR TO MRS. SEEMA JAJODIA, MRS. SAROJ BH ARTIYA AND MRS. SARIKA JHUNJUNWALA @ RS. 12/- PER SHARE. THE BOOK VALUE OF THE SHARE WAS ESTIMATED TO BE AROUND RS. 254.50. THE AO WAS OF THE VIEW THAT THE TRANSACTIONS OF SALE WERE A DEVISE TO PASS ON UNDUE MONETARY BENEFIT TO THE AFORESAID LADIES, WHO WERE RELATED PERSONS . HIS FINDINGS ARE THAT,- (I) THE BOOK VALUE OF THE SHARE WAS ABOUT 21 TIMES TH E SALE PRICE; (II) THE TRANSACTIONS ARE A COLOURABLE DEVISE TO PASS UNDUE BENEFIT TO THE BUYERS DIRECTLY OR INDIRECTLY RELATED TO THE COMPANY; (III) THE TRANSACTIONS DO NOT REPRESENT A DISTRESS SA LE AS THE AMOUNT RECEIVED IS INSIGNIFICANT COMPARED TO THE FINAN CIAL HEALTH OF THE COMPANY; AND (IV) EARNING PER SHARE (EPS) AFTER DEDUCTION OF INCO ME-TAX IS RS. 43.21. ITA NO. 4474(DEL)/2009 3 2.1 THEREFORE, HE COMPUTED THE CAPITAL GAINS BY AD OPTING THE FAIR MARKET VALUE OF THE SHARES. 3. THE MATTER WAS AGITATED IN APPEAL BEFORE THE CIT(APPEALS)-VII, NEW DELHI, WHO DISPOSED OFF THE APPEAL ON 18.9 .2009 IN APPEAL NO. 64/2008-09. IT WAS CONTENDED BEFORE HIM THAT FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAIN, THE MATERIAL AMOUNT IS SALE CONSIDERATION AND NOT THE FAIR MARKET VALUE OF THE SHARE. THERE IS NO EVIDENCE ON RECORD THAT ANY THING OVER AND ABOVE THE STATED SALE CON SIDERATION HAD BEEN RECEIVED BY THE ASSESSEE. THEREFORE, THE AO COULD NOT HAVE ALTERED THE COMPUTATION OF INCOME ADVERSE TO THE ASSESSEE. T HE LD. CIT(APPEALS) ACCEPTED THESE SUBMISSIONS AND ALLOWED THE APPE AL OF THE REVENUE, BY RECORDING THE FOLLOWING REASONS:- 5.3 THE FINDINGS OF THE AO & THE WRITTEN AND ORAL SUBMISSION(S) MADE ON BEHALF OF THE APPELLANT HA VE BEEN CAREFULLY CONSIDERED. IT HAS BEEN THE CASE OF AO THAT THE CONSIDERATION SHOWN BY THE APPELLANT WAS NOT THE REAL CONSIDERATION, BUT THIS HAS BEEN DONE WITHOUT B RINGING ON RECORD ANY EVIDENCE DIRECT OR INFERENTIAL IN SUPP ORT OF THE SAME. IT IS A TRITE LAW THAT THE ONUS TO PROVE OTHERWISE THAN THE FACT, LIES ON THE PERSON WHO ALLEGES. IT HAS BEEN CONSISTENTLY HELD BY THE COURTS OF LAWS THAT IT IS FOR THE REVENUE TO ESTABLISH THAT THERE HAS BEEN AN UNDERSTATEMENT OF CONSIDERATION BY THE ASSESSEE AND THE CONSIDERATI ON ACTUALLY RECEIVED IS MORE THAN THE ONE DISCLOSED BEFORE T HE TAX AUTHORITIES. IN CASE THE REVENUE WANTS TO MAKE OUT A CASE THAT THE ASSESSEE HAD RECEIVED MORE CONSIDERATIO N THEN IT ITA NO. 4474(DEL)/2009 4 SHOULD HAVE BASIC MATERIAL AND EVIDENCE IN ITS HA NDS WHICH SUGGEST THAT THE CONSIDERATION EXCEEDED THE AMOUN T SHOWN IN THE DOCUMENT. RELIANCE IS PLACED ON THE DECISION OF THE SUPREME COURT IN CIT VS. GEORGE HENDERSON CO. LTD. (1967) 66 ITR 622 (SC), CIT V. GILLANDERS ARBUTHNOT & CO. (1973) 87 ITR 407 (SC), K.P. VERGHESE V. ITO (1981) 131 ITR 597 (SC), CIT V. SHIVAKAMI CO. (P) LTD. (1986) 159 IT R 71 (SC) AND CIT VS. GODAWARI CORPN. LTD. (1993) 200 ITR 5 67 (SC), WHEREIN IT HAS BEEN HELD THAT UNLESS THERE IS EV IDENCE THAT MORE THAN WHAT WAS STATED, WAS RECEIVED NO H IGHER PRICE OR VALUE CAN BE TAKEN TO BE THE BASIS FOR COMPUT ATION OF CAPITAL GAINS. RELIANCE IS ALSO PLACED ON THE D ECISIONS OF THE JURISDICTIONAL HIGH COURT OF DELHI IN CIT V. GULS HAN KUMAR (DECD.) (2002) 257 ITR 703 (DEL) AND CIT VS. NA RESH KHATTAR HUF (2003) 261 ITR 664 (DEL), CIT VS. SMT. SUSHILA DEVI (2002) 256 ITR 179 (DELHI) AND CIT VS. SMT. NILOFER I. SINGH (2009) 221 CTR 277/(2009) 176 TAXMAN 252(2008) 14 DTR 108. THESE DECISIONS MAKE IT MORE THAN CLEAR THAT THE EXPRESSION THE FULL VALUE OF CON SIDERATION AS CONTEMPLATED IN SECTION 48 OF THE ACT DOES NOT HA VE ANY REFERENCE TO THE MARKET VALUE BUT ONLY TO THE C ONSIDERATION REFERRED TO IN THE SALE DEEDS OR OTHER SUPPORTIN G EVIDENCES AS THE SALE PRICE OF THE ASSETS WHICH HAVE BEEN TRA NSFERRED. 5.4 IN THE INSTANT CASE, NO MATERIAL HAS BEEN CONFRONTED BY THE DEPARTMENT SO AS TO SUGGEST THAT THE ASSESSE E PAID CONSIDERATION OF RS. 6,36,27,500/- I.E., 2,50,000 SHARES MULTIPLIED BY RS. 254.51 IN PLACE OF RS. 30,00,0 00, I.E. 2,50,000 SHARES MULTIPLIED BY RS. 12/-. IN THE IN STANT CASE, ALL THAT THE AO HAS DONE IS TO RELY UPON THE HYPOTHETI CAL SALE PRICE WHICH DOES NOT SHOW OR PROVE THAT THERE IS SOME UNDERHAND DEALING& CONSIDERATION HAS PASSED MORE THAN WHAT IS DISCLOSED BY THE ASSESSEE. THE SALE CONSIDERATI ON DISCLOSED BY THE ASSESSEE, SUPPORTED BY DOCUMENTARY EVIDENC E, CANNOT BE DISBELIEVED MERELY ON THE BASIS OF A HYPOTHETI CAL SALE PRICE ADOPTED BY THE ASSESSING OFFICER. IN VIEW OF THE AFORESAID DISCUSSION, I AM OF THE CONSIDERED VIEW THAT THE AO HAS FAILED TO ADDUCE EVIDENCE ON RECORD IN SUPPORT OF UNDERSTATEMENT OF THE SALE CONSIDERATION BY THE A SSESSEE. THEREFORE, AO IS DIRECTED TO ADOPT THE SALE CONS IDERATION OF ITA NO. 4474(DEL)/2009 5 THE IMPUGNED SHARES AT THE FIGURE AS DISCLOSE D BY THE ASSESSEE FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAIN. AS A RESULT, GROUND NO. 2 IS ALLOWED. 4. BEFORE US, THE LD. DR REFERRED TO PAGE NO. 22 O F THE ASSESSMENT ORDER, WHERE THE BOOK VALUE OF THE SHARE HAS BEEN COMPUTE D AT RS. 31.80 AS UNDER:- AS PER BALANCE-SHEET OF NSIL AS ON 31 ST MARCH, 2003 SHARE CAPITAL ISSUED SUBSCRIBED & PAID UP 50,00,000/- RESERVE & SURPLUS 109,431,121/- 159,431,121/- LESS: MISCELLANEOUS EXPENSES NOT WRITTEN OFF 421,049/- 159,010,072/- NO. OF SHARES 5,000,000 BOOK VALUE 31.80 4.1 THEREAFTER, HE REFERRED TO PAGE NO. 27 OF THE ASSESSMENT ORDER, WHERE IT IS MENTIONED THAT THE THREE LADIES TO WHOM THE SHARES HAVE BEEN SOLD ARE SISTERS OF SHRI NAVIN JINDAL. IT IS FURTHER MENTIONED THAT THE ASSESSEE HAS NOT STATED ANYTHING IN RESPECT OF THE QUERY AS TO WHETHER THE TRANSACTIONS WERE A COLOURABLE DEVISE TO TRANS FER ANY UNDUE BENEFIT DIRECTLY OR INDIRECTLY TO THE PERSONS RELATED TO T HE COMPANY. HOWEVER, THE ASSESSEE RAISED THREE BASIC ISSUES REGARDING SAL E AT LOW PRICE,-(I) ITA NO. 4474(DEL)/2009 6 RESTRICTION ON TRANSFER OF SHARES; (II) ILLIQUIDI TY OF SHARES; AND (III) NIL DIVIDEND PERFORMANCE OF THE COMPANY. IT IS ALSO MENTIONED THAT THE BOOK VALUE OF THE SHARE IS ABOUT RS. 254.50 AND THE E PS IS RS. 43.21. THEREFORE, IT IS INCOMPREHENSIBLE AS TO WHY THE SHARE WAS SOLD AT RS. 12/-. THE ARGUMENT OF THE LD. DR IS THAT EACH CASE HAS T O BE EXAMINED ON ITS OWN FACTS AND THE DECIDED CASE LAW IN THE MATTER MAY NOT BE OF GREAT RELEVANCE LOOKING TO ABNORMALLY LOW SALE PRICE. 4.2 IN REPLY, THE LD. COUNSEL FOR THE ASSESSEE S UBMITTED THAT IT IS A COMPANY AND, THEREFORE, IT CANNOT HAVE A RELAT IVE. HE MADE A STATEMENT AT BAR THAT NONE OF THE DIRECTORS OF THE ASSESSE E-COMPANY IS A RELATIVE OF ANY ONE OF THE THREE LADIES. SINCE TRANSACTIONS ARE DONE WITH THE INDEPENDENT PARTIES, THEY CANNOT TAKE ANY CO LOUR. REFERRING TO THE PROVISION CONTAINED IN SECTION 48 REGARDING COMP UTATION OF CAPITAL GAINS, IT IS SUBMITTED THAT WHAT IS TO BE SEEN IS CONS IDERATION RECEIVED OR ACCRUING. THERE IS NO EVIDENCE THAT ANY AMOUNT O VER AND ABOVE STATED BY THE ASSESSEE HAD BEEN RECEIVED. SIMILARLY, THER E IS NO EVIDENCE OF ACCRUAL OF THE AMOUNT TAKEN BY THE AO AS SALE CON SIDERATION. THEREFORE, IT IS ARGUED THAT THE COMPUTATION OF INCOME IS AGAINS T THE PROVISION CONTAINED ITA NO. 4474(DEL)/2009 7 IN SECTION 48. IT IS ALSO AGAINST THE RATIO OF SEVERAL CASES DECIDED IN THE MATTER. 4.3 IN THE REJOINDER, THE LD. DR SUBMITTED THAT IT IS NOT A CASE OF DISTRESS SALE AND THE COMPANY WHOSE SHARES WERE SOLD HAD EXCELLENT FINANCIAL RECORD. THIS FACTOR CANNOT BE IGNORE D WHILE DECIDING THE QUESTION AS TO WHETHER ANY EXTRA MONEY WAS R ECEIVED OR ACCRUED TO THE ASSESSEE. HOWEVER, IN SO FAR AS VALUATION IS CON CERNED, HE WAS OPEN TO REFER THE MATTER TO THE VALUER SO THAT A PROPER AMOUNT IS BROUGHT TO TAX AS CAPITAL GAIN. 5. WE HAVE CONSIDERED THE FACTS OF THE CASE A ND SUBMISSIONS MADE BEFORE US. THERE IS NO DISPUTE THAT THE SHARES WERE TRANSFERRED BY THE ASSESSEE-COMPANY TO THE THREE LADIES WHOSE NAMES HAVE BEEN MENTIONED BY US ALREADY IN THIS ORDER. IN OTHER WORDS, THERE IS NO DISPUTE THAT THE TRANSACTIONS FALL WITHIN THE MEANING OF THE WORD TRANSFER DEFINED IN SECTION 2(47). THERE IS ALSO NO DISPUTE THAT TH E TRANSFER IS IN RELATION TO A CAPITAL ASSET, BEING THE SHARES OF NSIL. THER EFORE, THE TRANSACTION IS COVERED FOR THE PURPOSE OF TAXATION UNDER THE HE AD CAPITAL GAINS U/S ITA NO. 4474(DEL)/2009 8 45(1). SECTION 48 PRESCRIBES THE MODE OF COMPUT ATION OF THE CAPITAL GAINS AS UNDER:- 48. THE INCOME CHARGEABLE UNDER THE HEAD CAP ITAL GAINS SHALL BE COMPUTED, BY DEDUCTING FROM THE FULL VALUE O F THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFE R OF THE CAPITAL ASSET THE FOLLOWING AMOUNTS, NAMELY:- (I) EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY IN C ONNECTION WITH SUCH TRANSFER; (II) THE COST OF ACQUISITION OF THE ASSET AND THE C OST OF ANY IMPROVEMENT THERETO; 5.1 THE PROVISION REGARDING COMPUTATION OF CAPITA L GAINS CONTEMPLATES ASCERTAINMENT OF THE FULL VALUE OF CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER OF THE CAPITAL ASSET. THE WORD RECEIVED MEANS ACTUALLY RECEIVED AND THE WORD ACCRUING MEAN S THE DEBT CREATED IN FAVOUR OF THE ASSESSEE AS A RESULT OF TRANSFER. IN ANY CASE, BOTH TERMS ARE USED AS ACTUALS AND NOT ESTIMATED AMOUNTS. TH E PROVISION DOES NOT CONTAIN WORDS TO THE EFFECT FAIR MARKET VALUE ETC. THEREFORE, THE COMPUTATION MADE BY THE AO PRIMA FACIE IS NOT I N ACCORDANCE WITH THIS PROVISION. ITA NO. 4474(DEL)/2009 9 5.2 WE MAY NOW DEAL WITH VARIOUS CASES RELIED UPON BY THE LD. COUNSEL. IN THE CASE OF CIT VS. SHIVAKAMI CO. P.LTD. (1986) 159 ITR 71, THE FACTS OF THE CASE OF RUKMANI CO. PVT. L TD. WERE TAKEN AS ILLUSTRATIVE OF THE MATTER. THE COMPANY HAD 50 S HARES OF THE FACE VALUE OF RS. 1,000/- EACH, FULLY PAID UP AND THE SHAREHOL DERS WERE PADMANABHA PVT. LTD. AND PUDUKKOTTAH CORPORATION P. LTD., EQUA LLY. THE ASSESSEE COMPANY SOLD 800 SHARES HELD BY IT IN EAST IN DIA CORPORATION LTD. AND 1000 SHARS HELD BY IT IN MADURA INSURANCE CO. LTD . TO PACHNAYAKI P. LTD. FOR RS. 60,000/- RS. 75,000/- RESPECTIVELY. THE COST PRICE OF THE SHARES OF EAST INDIA CORPORATION LTD. WAS RS. 81,201/- AND TH AT OF MADURA INSURANCE CO. WAS RS. 1.00 LAKH. ON THE SAME DATE, THE A SSESSEE SOLD 499 SHARES IN PUDUKKOTTAH CORPORATION P. LTD. TO PADMANABHA CO . P. LTD. AT COST PRICE OF RS. 4,990/-. ALL THESE SHARES WERE NO T QUOTED ON THE STOCK EXCHANGE. THE BREAK-UP VALUE OF THE SHARES OF THE EAST INDIA CORPORATION LTD. WAS RS. 1,72,800/- AND SHARES OF MADURA INS URANCE CO. LTD. WAS RS. 1,54,000/-. AFTER DEDUCTING THE COST, THE PROFIT HAD BEEN DETERMINED UNDER THE HEAD CAPITAL GAINS AT RS. 91,599/- AND RS. 54,000/-RESPECTIVELY. THE QUESTION BEFORE THE HIGH COURT WAS-WHETHER, THE COMPUTATION OF CAPITAL GAIN SHOWN BY THE ASSESSEE AND UPHELD BY THE TRIB UNAL WAS CORRECT UNDER THE 1922 ACT? THE HIGH COURT ANSWERED THE QUEST ION IN FAVOUR OF THE ITA NO. 4474(DEL)/2009 10 ASSESSEE. THE HONBLE SUPREME COURT HELD THAT TH E WORDS FULL VALUE OF CONSIDERATION IS TO BE TAKEN AS THE BASIS FOR CO MPUTATION OF CAPITAL GAINS. THEREFORE, UNLESS THERE IS EVIDENCE THAT MORE THA N WHAT WAS STATED WAS RECEIVED, NO HIGHER PRICE CAN BE TAKEN TO BE THE B ASIS FOR COMPUTATION OF THE CAPITAL GAINS. THE ONUS IS ON THE REVENUE AND TH E INFERENCES MIGHT BE DRAWN IN CERTAIN CASES BUT TO COME TO A CONCLUSIO N THAT A PARTICULAR HIGHER AMOUNT WAS, IN FACT, RECEIVED MUST BE BASED O N SUCH MATERIAL FROM WHICH AN IRRESISTIBLE CONCLUSION FOLLOWS. REFERRI NG TO THE DECISION IN THE CASE OF K.P. VERGHESE, (1981) 131 ITR 597 (SC), IT WAS MENTIONED THAT THE ONUS WAS ON THE REVENUE TO PROVE THAT THE RE WAS UNDER-STATEMENT IN THE DOCUMENT, NOT THAT THE GOODS WERE SOLD AT UNDER-VALUE. UNDER- STATEMENT OF A VALUE IS A MIS-STATEMENT OF VALU E. SELLING GOODS AT AN UNDERVALUE TO DEFEAT THE REVENUE IS DIFFERENT F ROM UNDER-STATING THE VALUE IN THE DOCUMENT OF SALE. RELYING ON THIS DECIS ION, IT WAS HELD THAT THE PROVISION CONTAINED IN PROVISO TO SECTION 12B(2) O F THE 1922 ACT, CAN BE INVOKED ONLY WHERE THE CONSIDERATION FOR THE TRAN SFER OF THE CAPITAL ASSET HAS BEEN UNDER-STATED BY THE ASSESSEE. THE ONLY ARGUMENT MADE BY THE LD. DR IN THIS MATTER IS THAT THE SALE BY THE ASSESS EE WAS NOT A DISTRESS SALE. THAT ACCORDING TO US, DOES NOT DISTINGUISH THE FACTS OF THE CASE BECAUSE WHAT THE COURT APPROVED WAS THAT THERE IS A DIF FERENT BETWEEN ITA NO. 4474(DEL)/2009 11 UNDERSTATEMENT AND MIS-STATEMENT OF THE VALUE. O N THE BASIS OF THIS DECISION AND THE DECISION IN THE CASE OF K.P. VE RGHESE, IT CAN BE SAID THAT THE RELEVANT FIGURE IS THAT OF FULL VALUE OF CO NSIDERATION RECEIVED OR ACCRUING, AND NOT THE FAIR MARKET VALUE. 5.3 THE LD. COUNSEL FURTHER RELIED ON THE DECISI ON OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. GULSHAN KUMAR (DECD.), (2002) 257 ITR 703. IN THIS CASE, THE AO CAME TO THE CONCLU SION THAT SALE OF SHARES BY THE ASSESSEE TO EMPLOYEES, DEALERS AND CLOSE RELATIVES AT COST PRICE RESULTED IN FURNISHING INACCURATE PARTICULARS OF INCOME AND UNDER-STATEMENT OF THE INCOME. AFTER CONSIDERING THE RELEVANT PROVISION AND THE DECISION IN THE CASE OF K.P. VERGHESE(SUPRA), IT WAS HEL D THAT THE CIT(APPEALS) AND THE TRIBUNAL RIGHTLY CAME TO THE CONCLUSION T HAT THERE IS NO MATERIAL ON RECORD TO SHOW THAT THE SALE CONSIDERATION W AS UNDERSTATED OR THE ASSESSEE HAD RECEIVED ANYTHING DIRECTLY OR INDI RECTLY OVER AND ABOVE THE DECLARED VALUE OF THE SHARES. THEREFORE, THE MA TTER WAS DECIDED IN FAVOUR OF THE ASSESSEE. 5.4 RELIANCE HAS ALSO BEEN PLACED ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SMT. NILOFER I. SINGH, (2009) 221 CTR ITA NO. 4474(DEL)/2009 12 277. FOLLOWING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. GILLANDERS ARBUTHNOT & CO., (1973) 87 ITR 407 AND CIT VS. GEORGE HENDERSON & CO., (1967) 66 ITR 622, IT WA S HELD THAT THE WORDS FULL VALUE OF CONSIDERATION RECEIVED OR ACCRUING USED IN SECTION 48, DO NOT HAVE THE SAME MEANING AS THE WORDS FAIR MARKET VALUE, BUT MEAN ONLY THE CONSIDERATION REFERRED TO IN THE SALE D EED AS PRICE FOR WHICH THE CAPITAL ASSET HAS BEEN TRANSFERRED. THEREFORE, WHILE MAKING THE COMPUTATION, THE MATTER CANNOT BE REFERRED TO T HE VALUATION CELL U/S 55A OF THE ACT. SUCH WAS ALSO THE DECISION OF HONB LE DELHI HIGH COURT IN THE CASE OF CIT VS. SMT. SUSHILA DEVI, (2002) 256 ITR 179. 5.5 COMING TO THE FACTS OF THE CASE, THERE IS N O EVIDENCE ON RECORD THAT THE TRANSFEREES WERE RELATED TO THE DIRECTORS O F THE COMPANY. IN ANY CASE, THEY CANNOT BE SAID TO BE RELATED TO THE COMPANY , AS HELD BY THE AO, AS A COMPANY DOES NOT HAVE A CORPOREAL EXISTENCE. T HE LD. COUNSEL HAS ALSO MADE A STATEMENT AT THE BAR THAT NONE OF THE LAD IES IS RELATED TO ANY OF THE DIRECTORS OF THE ASSESSEE-COMPANY. IN ANY CASE, THIS ISSUE BECOMES OF NO CONSEQUENCE IN VIEW OF THE DECISION IN THE CASE O F GULSHAN KUMAR (DECD.), IN WHICH THE SHARES WERE TRANSFERRED TO THE EM PLOYEES, DEALERS AND CLOSE RELATIVES AT PURCHASE PRICE. THE DECISION IN TH E CASE OF MCDOWEL & CO., ITA NO. 4474(DEL)/2009 13 DOES NOT HAVE ANY BEARING ON THE FACTS OF THE C ASE. NOTHING HAS BEEN BROUGHT ON RECORD TO SHOW THAT THE TRANSACTIONS CONSTITUTED INAPPROPRIATE AND EXCESSIVE TAX PLANNING DEVISE. THE TRANSACTIO NS WERE CONDUCTED WITH INDEPENDENT PARTIES. SOME OF THE CASES RELIED UPON BY THE LD. COUNSEL PERTAIN TO THE PERIOD IN WHICH THE PROVISIONS CON TAINED IN SECTION 52 WERE IN FORCE, WHICH HAVE BEEN OMITTED WITH EFFECT FROM 1.4.1988. THEREFORE, IF THE CASE OF THE REVENUE DOES NOT STAND THE TEST OF SCRUTINY UNDER MORE STRINGENT PROVISIONS, IT CANNOT STAND THE TEST OF SCRUTINY AFTER OMISSION OF THE PROVISIONS CONTAINED IN SECTION 52. APART F ROM THAT, THE DECISION IN THE CASE OF SMT. NILOFER I.SINGH (SUPRA) IS IN RE LATION TO ASSESSMENT YEAR 1998-99, WHEN THE PROVISION CONTAINED IN SECTI ON 52 WAS NOT IN OPERATION AND, THEREFORE, IS FULLY APPLICABLE TO THE FACTS OF THE CASE. 5.6 IT MAY BE MENTIONED HERE THAT THE TRANSAC TIONS HAVE TAKEN PLACE AT VALUES FAR LESSER THAN ARMS LENGTH PRICE . BUT IN ABSENCE OF ANY EVIDENCE OF RECEIPT ETC. OF MORE THAN STATED CO NSIDERATION, THE COMPUTATION OF CAPITAL GAINS MADE BY THE ASSESSE E CANNOT BE ALTERED. 5.7 IN A NUTSHELL, IT IS HELD THAT THE LD. CIT(AP PEALS) WAS RIGHT IN DIRECTING THE AO TO COMPUTE THE INCOME ON THE BA SIS OF CONSIDERATION ITA NO. 4474(DEL)/2009 14 ACTUALLY RECEIVED, BEING RS. 12/- PER SHARE, AND THERE IS NO NEED TO REFER THE MATTER TO THE VALUER FOR FINDING OUT CORR ECT FAIR MARKET VALUE OF THE SHARE, AS SUGGESTED BY THE LD. DR. 6. IN THE RESULT, THE APPEAL IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT ON 25 FEBRUARY, 2011. SD/- SD/- (I.P.BANSAL) (K.G.BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE OF ORDER: 25TH FEBRUARY, 2011. SP SATIA COPY OF THE ORDER FORWARDED TO: JINDAL EQUIPMENT LEASING & SERVICES LTD., NEW DEL HI. DY.CIT, CIRCLE 4(1), NEW DELHI. CIT(A) CIT THE DR, ITAT, NEW DELHI. ASSISTANT REG ISTRAR.