Case Law Details
ACIT (International Taxation) Vs Cairn UK Holding Ltd. (ITAT Delhi)
This is an appeal by the Revenue against order dated 19.12.2016 of learned Commissioner (Appeals)-42, New Delhi, for the assessment year 2012-13.
2. The only effective ground raised by the assessee reads as under:
“Whether the Ld. CIT (A) has erred in law and on facts of the case in holding that the assessee is entitled to benefit of proviso to section 112(1) of the Act on sale of the equity shares in question.”
3. We have heard Sh. Percy Pardiwalla, learned Senior Counsel appearing for the assessee and Ms. Sapna Bhatia, learned Departmental Representative. The basic dispute between the assessee and the Revenue is with regard to the rate of tax on the amount of capital gain. As could be seen from the facts on record, during the year under consideration, the assessee transferred eqity shares of Cairn India Ltd. (CIL) to Twin Star Mauritius Holdings Ltd. in an off-market transaction and earned long term capital gain of Rs.1,21,38,22,15,541/-. The purchaser of equity shares deducted tax at source by applying the rate of 20% on the amount of capital gain. However, in the return of income filed for the impugned assessment year, the assessee applied the tax rate of 10% on the capital gain by taking recourse to the proviso to section 112(1) of the Act and claimed refund of the excess TDS. The Assessing Officer disallowed assessee’s claim.
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