Case Law Details
Trak Services (P) Limited Vs ITO (ITAT Delhi)
Introduction: The case of Trak Services (P) Ltd. vs. ITO (ITAT Delhi) revolves around the dispute over the calculation of Long Term Capital Gain (LTCG) on the sale of shares of M/s Axis IT&T Ltd. The Assessing Officer (AO) contested the declared LTCG, leading to a legal battle.
1. Background of the Case Trak Services (P) Ltd. declared LTCG from the sale of shares of M/s Axis IT&T Ltd. However, the AO questioned the declared sale price, arguing that the market value on the transfer date should be considered. The dispute centered around whether the agreed-upon price or the market value should determine the LTCG.
2. Assessee’s Position The assessee argued that a share purchase agreement was executed on January 11, 2008, where 60.69% of shareholders agreed to sell their shares at an agreed rate of Rs. 13.50 per share. The agreement complied with SEBI regulations, and all necessary approvals were obtained. The consideration was received in two installments as per the agreement.
3. Legal References The assessee relied on several legal precedents, emphasizing that the full value of consideration for tax purposes should be based on the sale price agreed upon in the transaction documents. This position was supported by various court decisions, including those from the Supreme Court and High Courts.
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