The Commissioner Of Income Tax – 12, Mumbai v. The Assessment Year Involved Herein Is Ay 2005-2006

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.6638 OF 2010 The Commissioner of Income Tax – 12, Mumbai ..Appellant. Versus Smt.Kavindra Gupta..Respondent. Mr.Suresh Kumar for the appellant. CORAM : J.P. Devadhar &A.R. Joshi, JJ. P.C. : DATE : 23[rd] January 2012 1.Whether the Income Tax Appellate Tribunal was justified in holding that there was no justification for the assessing officer in treating the price for the transfer of shares in excess of the book value of the shares in question as taxable non-compete fees in the hands of the assessee is the question raised in this appeal. 2.The assessment year involved herein is AY 2005-2006. 3.The assessee was holding 2,50,000 shares of M/s.Corob India Private Limited, which were acquired by her at a price of Rs.29.83 lakhs during the financial year 2000-2001. The above shares were sold by the assessee during the assessment year in question at Rs.3.98 crores and the resultant long term capital gains of Rs.3,62 crores were offered for tax. 4.As the assessee had received 6,000 Euro as non-compete fees from the person to whom the shares were sold, the assessing officer held that since the book value of the shares were Rs.55.42 per share, the amount received by the assessee in excess of the book value of the shares should also be treated as non-compete fees received by the assessee. The additions made by the assessing officer was upheld by the Commissioner of Income Tax (Appeals). 5.On further appeal filed by the assessee, the Income Tax Appellate Tribunal has deleted the additions by recording a finding that similar transactions entered into by other family members of the assessee have been accepted by the assessing officer without making any additions. Admittedly, those decisions have attained finality. Apart from the book value, there is no other material to doubt the genuineness of the transaction. In these circumstances, the decision of the Income Tax Appellate Tribunal in holding that the entire amount received in excess of the book value represents the value of the shares and accordingly the capital gains computed by the assessee were in accordance with law, cannot be faulted. 6.In this view of the matter, we see no merit in this appeal. The appeal is accordingly dismissed with no order as to costs. (A.R. Joshi, J.)(J.P. Devadhar, J.)