ITAT DELHI BENCH ‘H’
Zeppelin Mobile System GmbH
versus
Additional Director of Income-tax
IT Appeal No. 5179 (Delhi) of 2010
[ASSESSMENT YEAR 2007-08]
Date of Pronouncement – 12.04.2013
Smt. IndraBansal for the Appellant. Sameer Sharma for the Respondent.
ORDER
A.D. Jain, Judicial Member
This is Assessee’s appeal for Assessment Year 2007-08 against the assessment order dated 29.10.2010 passed by the Addl. Director of Income Tax, Range-2, International Taxation, New Delhi. The following grounds of appeal have been taken:-
“1. The Learned Dispute Resolution Panel-II, Delhi has illegally confirmed the action of the Assessing Officer for taking the value of sale consideration @ Rs.400 per share instead of actual sale consideration received @ Rs. 390/- per share a Capital Gain is liable to be computed at Rs.9,55,73,488/-.
2. The Learned Dispute Resolution Panel-II, Delhi was not justified in making the addition of Rs.28,73,000/- under the head capital gain the same deserves to be fully deleted.
3. The Learned Dispute Resolution Panel-II, Delhi was not justified in computing the capital gain as per the provision of Section 48 of the IT Act, 1961 at Rs.9,88,76,204/-. The same deserves to be computed at Rs. 9,55,73,488/-.”
2. The facts of the case in brief are that the assessee, M/s Zeppelin Mobile Systems GmbH is a tax resident of Germany. It has an Indian subsidiary called Zeppelin Mobile Systems India Ltd., which is a closely held unlisted company under the Indian Companies Act, 1956. It is engaged in the business of designing, manufacturing and assembling of Polyurethanes Foam based Prefab Structures, Telecom Shelters and derivatives. During the year, the assessee had sold part of the shares held by it in its Indian subsidiary to M/s Sintex Industries Ltd. The assessee filed its original return of income under Section 139 (1) of the Income Tax Act, 1961 for Assessment Year 2007-08 on 18.10.2007, reporting total income of Rs. 9,55,73,488/- on account of capital gain from sale of shares. Pursuant to scrutiny assessment proceedings, the Assessing Officer issued a draft order dated 29th December, 2009 under Section 143 (3) of the Act as per provisions of Section 144C(1) of the Act wherein the total income was proposed to be assessed at Rs. 9,91,56,204/- after making, inter alia, the following adjustment:-
