IN THE ITAT CHENNAI BENCH ‘B’
Usharani Raghunathan
v.
Commissioner of Income-tax
IT APPEAL NOs. 493 to 495 (MDS.) OF 2012
[ASSESSMENT YEAR 2007-08]
MAY 10, 2012
ORDER
Abraham P. George, Accountant Member
These are appeals filed by different assessees for impugned assessment year. Since the fact situation giving raise to the appeals are similar, the appeals are disposed of through a consolidated order. All these appeals have been filed with a delay of 38 days. Condonation petitions were on record. Reasonable cause has been shown. Delay is condoned and appeals are admitted.
2. Facts are that all the three assessees were Directors in one M/s Raj Television Network Limited. The assessees had admitted in their respective returns for the impugned assessment year, capital gains of varying sums and some of them had claimed exemption under Section 54F of Income-tax Act, 1961 (in short ‘the Act’) as well. Capital gains shown by Smt. Usha Raghunathan was Rs. 2,71,99,556/- and exemption claimed under Section 54F of the Act was Rs. 2,50,00,000/-. Capital gains returned by Shri Raghunathan was Rs. 3,20,81,676/- and exemption was claimed for an equal amount. Capital gains returned by Smt. Amudha Rajendran came to Rs. 2,72,00,001/- and it seems there was no claim for any exemption under Section 54F of the Act. Assessees were required to file details of sale of shares which resulted in capital gains. Submission of the assessees was that such capital gains arose out of sale of shares of one M/s Raj Television Network Limited. As per the assessees, M/s Raj Television Network Limited in which they were holding shares, had gone for an Initial Public Offering (IPO) of its shares during the relevant previous year and the shares sold by the assessees were part of this IPO. According to assessees, the total pre-issue expenses incurred for such IPO was Rs. 7,80,19,016/- and the pro rata share of the assessees came to Rs. 3,16,43,013/-. While computing capital gains, assessees had considered their respective shares of such expenses as a part of expenditure incurred wholly and exclusively in connection with transfer of shares. Relying on Section 48 of the Act, assessees argued that such expenditure had to be deducted while calculating capital gains. A.O. sought explanation from the assessees as to whether there was any agreement between M/s Raj Television Network Limited and assessees for apportionment of the expenses. A.O. also sought details of IPO expenses. The break-up of the expenses were submitted by the assessees as under:-
