W.p.(C)/11851/2015 Of Jak Exim Pvt. Ltd v. Income Tax Officer Ward,13 (2), New Delhi

$~15 *IN THE HIGH COURT OF DELHI AT NEW DELHI+W.P.(C) 11851/2015JAK EXIM PVT. LTD. THROUGH: ITS DIRECTOR ..... Petitioner Through: Mr. Amol Sinha and Mr. Rahul Kochar,Advs. Versus INCOME TAX OFFICER WARD,13 (2), NEW DELHI ..... Respondent Through: Mr. Rahul Chaudhary, Sr. St. Counsel. CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHATHON'BLE MR. JUSTICE NAJMI WAZIRIO R D E R%20.12.2016 We have heard the learned counsel for the parties.TheAssessee is aggrieved by the notice under Section 147/148 of theIncome Tax Act, 1961 (‘the Act’) issued by the respondents in respectof Assessment Year 2008-09. It is contended that the “reasons” tobelieve which impelled the Revenue to reopen the assessment, areuntenable.TheassesseeCompanyunderwentachangeofshareholding pattern in terms of the existent regulations, framed bytheconcernedrevenueauthority(NOIDAauthority).Suchshareholding pattern had to be reported and the assessee, the owner ofthe leasehold property, was required by these regulations to enter intoa Change in Constitution (CIC) Deed which it did on 26[th]July, 2007.The effect of this CIC Deed was that in fact shareholders relinquished their rights over the leasehold property, as it were, in favour of thenew shareholders. However, there was impediment as to the status ofthe ownership of the property – the assessee continued to be thelessee. This CIC was construed as a transfer of documents becausethe NOIDA authority applied the regular Circle Rate resulting inpayment of stamp duty in excess of the transaction value towards thedifferential amount. As a result, the AO proceeded on the basis of thetransaction of sale/transfer which had not been reported and applyingSection 50C of the Act, issued notice. It is evident from the discussion that in reality the shareholdingof the company, i.e., the assessee changed even though its status asthe owner of the property remained unchanged. This fact is notdisputed by the Revenue; the assessee had reported this fact in theobjection preferred to the AO upon the receipt of the impugnednotice. The AO’s prima facie observations that the CIC was a meredevice to facilitate a transfer, is also equally untenable. In the circumstances, since there was no transaction thatrequired to be reported for which any amounts were received, theopinion formed by the AO was certainly untenable. The impugned notice dated 12.03.2015 and all proceedingsemanating therefrom are hereby quashed.The writ petition isallowed. S. RAVINDRA BHAT, J DECEMBER 20, 2016/acm NAJMI WAZIRI, J