Where assessee, a shareholder of KMPL, alongwith other shareholders sold entire shares of KMPL to 'R', it could not be regarded as an indirect transfer of flats owned by KMPL to 'R' and, consequently, provisions of section 50C could not be applied to transaction of sale of shares

[2013] 29 taxmann.com 424 (Mumbai - Trib.)

IN THE ITAT MUMBAI BENCH 'I'

Irfan Abdul Kader Fazlani

As per Ld Counsel, the capital assets transferred here are the shares of the company and not the land or building or the both. Provisions of section 50C are the deemed provisions and the meaning of the same cannot be extended as the deemed provision has to be strictly interpreted as held in a judgment in the case of CIT v. Shrishakti Trading Co. [1994] 207 ITR 442/74 Taxman 590 (Bom.) Ld Counsel filed written submissions narrating the legal submissions mentioning that the expression "full value consideration" received or accruing as a result of the transfer as fully explained by various decision which are as follows.

 1.  CIT v. George Henderson & Co. Ltd [1967] 66 ITR 622 (SC)

 2.  CIT v. Gillanders Arbuthnot & Co [1973] 87 ITR 407 (SC)

 3.  Rupee Finance & Management (P.) Ltd. v. Asstt. CIT [2008] 22 SOT 174 (Mum.) ITAT -Affirmed by Bombay High Court ITA No.1208 dated 20.10.2008. Vishal P. Mehata v. Dy. CIT[ITA No. 3586/Mum/2009, dated 26.10.2010]

8. Further, as per Ld Counsel, the provisions of section 50C are not applicable as the agreement is for the sale of shares which are to be registered to the Stamp Duty Authorities and placed reliance on the following decisions.

 1.  Carlton Hotels (P.) Ltd. v. Asstt. CIT [2010] 35 SOT 26 (Luck)

 2.  Ran Mal Bhansali v. Asstt. CIT [2012] 25 taxmann.com 149 (Jodh) (URO)

 3.  Navneet Kumar Thakkar v. ITO [2008] 110 ITD 525 (Jodh) (SMC)

 4.  Smt. Vijay Laxmi Bhadhha v. ITO [2009] 20 DTR (JP) (Tri) 365.