Ita/630/2012 Of Commissioner Of Income Tax-Iii v. Rajat Lal

iD .- $-28f IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 630/20t2 COMMISSIONER OF INCOME TAX-II..... AppellantThrough :'Sh. SanjeevRajpal, Sr. StandingCounsel. VCTSUS RAJAT LAL ..... Respondent Through : Sh. Vaibhav Kulkarni, Advocate. CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BIIATHON'BLE MR. JUSTICE R.V.EASWAR ORDER ,/, 0s.11.2012 This appeal by the Revenue challenges an order of the Income Tax AppellatcI'ribunal (I'I'AT) clated 11.02.2012 in ITA ll79lDeV2006 for the assessment year1997-98. ['Ihe ]impugned order had rejected the Revenue's appeal, questioning thedeletion of the penalty imposed by the AO under Section 271(l)(c) of the Income TaxAct, in the circumstances of this case. The assessee in his retum declared an income ofRs.39,18,664. The AO directed addition of certain amount as capital gains after returninga finding that the assessee had sold certain shares during the relevant accounting year.While doing so, the assessee's contention that the shares were sold during a subsequentperiod because thc consideration was fully realized at that point of time, was rejected.The assessee's appeal was allowed by the CIT (A) but the ITAf, on Revenue's appeal,retumed the addition of the capital gains. In an appeal to the Allahabad High Court by thcassessee under Section 260A of the Income Tax Act, being ITA 612005, that High Courtconsidered the question of law for this assessment year 1997-98 and accepted theassesses's contentions. A copy of the said [judgment ]has been shown to the Court. Thefollowing questions of law were considered by the High Courl: "A. Whether on the focts and in the circwnstances of the case, theTribunal erred in law in holding that capital gains on transfer of shares i'r} !- i u,ere liable to tca during the previous year relevant to [assessnzent ][year]I 997-98? B. [Yhether the Tribunal was legally correct in holding that thecapital gains rud.r r6seJ,rable in the assessnxent year 1997-98 even u,henthere was no transfer of shares as provided for and contemplated underthe Companies Act? C. Whether on the facts and in the circumstances of the case, theTribunal erced in law in holding that the ag'eentent [y'es ]one for transferof intmov abl e pr op er ty. D. Whether the Tribunal misinterpreted the deed of agreentent dated19.08.1996 and erroneously took the view that the proprietary right in theshares vested in the buyer on the payment of the firsl instalntent. TheTribunal failed to take into consideration that no transfer deedtransferring the certificate was ever issued by the appellant in the relevantassessntent year 1997-98 nor was he recorded as a shareholder in therecords of the contpany? E. Whether on the facts and in the circuntstances of the case, theT'ribtmal erred in lcnu in taking into [account ]inelevant [materictl ]andignoring essential ntaterial and evidences on record? F Whether on the facts and in the circumstances of the case, theconclusion arrived at by the Tribunal is perverse in as mttch as noreasonable person correctly infornted of the position in lav, tvould cometo? " In para 29 of the said judgment, the Tribunal's ruling was set-aside and the HighCouft consequently answered the questions of law in favor of the assessee. Having regardto these circumstances, which apparently took [place ]after the filing of the present appeal,this Cout is of the opinion that the Revenue's appeal cannot be accepted. Anotherfeature which this Court has taken into account is that the findings of the CIT(A) and theTribunal in the present penalty are concurrent [and ][against ][the ]Revenue. The appeal istherefore, rejected. S. RAVINDRA BHA'[, JItl"^-, [..]R.V.EASWAR. J NOVEMBER O5,2OI2'ajk'