Case Law Details
DCIT Vs Indiabulls Real Estate Ltd. (ITAT Mumbai)
ITAT Mumbai held that re-computation of capital gains by considering the lower value of consideration for the sale of equity shares of the subsidiary company allowable as the genuineness of the same is proved.
Facts- The assessee is a company engaged in the business of real estate projects, advisory, construction, and development of real estate projects.
In its return of income, the assessee also offered the capital gains on the transfer of shares of its wholly-owned subsidiary, i.e. Shivalik Land Development Ltd, considering the full value of consideration at Rs.10 crore. The return of income filed by the assessee was selected for scrutiny. Vide assessment order passed u/s. 143(3) of the Act, the income of the assessee was determined at Rs.27,28,75,510, after making disallowance u/s. 14A of the Act.
In its appeal before the learned CIT(A), the assessee raised an additional ground of appeal relating to a recomputation of capital gains on the sale of shares of its wholly-owned subsidiary by revising the sale consideration from Rs.10 crore to Rs.25 lakh, on the basis that the parties have entered into Settlement Deed and Supplementary Share Purchase Agreement, whereby the total consideration of the sale of shares of the wholly-owned subsidiary company was reduced to Rs.25 lakh.
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