DY. COMMISSIONER OF INCOME TAX, CIRCLE-1(1), HYDERABAD vs. ALPHA VILLAS PRIVATE LIMITED, HYDERABAD

आयकर अपील�य अ�धकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ B ‘ Bench, Hyderabad Before Shri R.K. Panda, Accountant Member AND Shri K. Narasimha Chary, Judicial Member Assessment Year: 2011-12 Dy. C.I.T. Vs. Alpha Villas P Ltd Circle 1(1) Hyderabad Hyderabad PAN:AAFCA8949L (Appellant) (Respondent) /Hyd/2017 Assessment Year: 2011-12 Dy. C.I.T. Vs. Alpha Avenues (P) Ltd Circle 1(1) Hyderabad Hyderabad PAN:AAFCA8948M (Appellant) (Respondent) Assessee by: Shri K.A. Sai Prasad, CA Revenue by: Shri Jeevan Lal Lavidiya, CIT(DR) Date of hearing: 05/06/2023 Date of pronouncement: 12/06/2023 ORDER Per R.K. Panda, A.M The above two appeals filed by the Revenue are directed against the separate orders dated 17.03.2017 of the learned CIT (A)-1, Hyderabad relating to A.Y.2011-12. Since identical grounds have been raised by the Revenue in both the appeals, therefore, these were heard together and are being disposed of by this common order.

(2011-12) Alpha Villas (P) Ltd 2. Facts of the case, in brief, are that the assessee is engaged in the business of real estate and share investment. It filed its return of income on 29.9.2011 declaring total income at Rs.54,26,00,434/-. The case was selected for scrutiny and statutory notices u/s 143(2) & 142(1) were issued to the assessee in response to which the AR of the assessee appeared before the Assessing Officer from time to time and filed the requisite details.

3. During the course of assessment proceedings, the Assessing Officer noted that the assessee has incurred STCL of Rs.53,70,98,641/-on the sale of equity shares of Bharati Cements which it has purchased during the year 2009-10 as secondary purchases from Sri Y. Jagan Mohan Reddy and allotment from Raghuram Cements (presently Bharati Cements) during the year 08-09 & 09-10. On the sale of shares of Bharati Cements, which were acquired in 07-08, it also admitted LTCG. He noted that M/s. Bharati Cements is assessed to tax with DCIT-2(1) who held that the amounts paid by Alpha Avenues and Alpha Villas towards the premium for the acquisition of the shares of Bharati Cements (then Raghuram Cements) is taxable u/s.56 of the I.T. Act by holding that the investment of Alpha Villas and Alpha Avenues could be for availing benefits from the Govt. of AP for conducting activity of liaison work with the company. He has also elaborately discussed the capacity of M/s. Bharati Cements to command premium of Rs. 1440/- for its share and also held that M/s. Alpha Villas and Alpha Avenues do not have the requisite income profile to make such huge investments. He also referred to the disclosure of Rs. 10 crores made by Alpha Villas (P) Ltd during the survey by the Investigation Wing which is on account of investment from Kolkata based Shell Company. Since the Assessing Officer of M/s. Bharati Cements held that the so-called premium is not for the value of the share and for other benefits and had taxed u/s.56, therefore, he held that the assessee has not acquired the shares for a premium. In the light of the above analogy and facts, the Assessing Officer determined the cost of acquisition of shares of Bharathi Cements at Rs 10/- per share and accordingly determined the cost price of 689649 shares at Rs.68,96,490/- and computed the Short-Term Capital Gain (STCG) at Rs.45,59,95,919 as under: Sale consideration on sale of 689649 shares @671.2 =Rs.46,28,92,409/- Less : Cost of Acquisition = Rs.68,96,490/- Taxable STCG = Rs.45,59,95,919/-

4. In appeal, the learned CIT (A) deleted the addition by observing as under: “4. Decision: The submissions of the appellant and the order passed by the Assessing Officer have been carefully considered.

5. Ground Nos. 1& 13 are general in nature. 6. Ground No.2 to 12: Addition u/s.56 of Rs.45,59,95,919/-. During the course of assessment proceedings, the Assessing Officer noticed from the return of income that the assessee had incurred Short Term Capital Loss (STCL) of Rs.53,70,98,641/- on the sale of equity shares of M/s. Bharathi Cements. The assessee had purchased the shares during the year 2009-10 as secondary purchasers from Sri Y. Jagan Mohan Reddy and allotment from M/s. Raghuram Cements (presently M/s. Bharathi Cements) during the year 2008-09 & 2009-10. On the sale of shares of M/s. Bharathi Cements which were acquired in 2007-08, the assessee also admitted LTCG. The Assessing Officer relied on the assessment order of M/s. Bharathi Cements, wherein it was held that:  the amounts paid by M/s. Alpha Avenues and M/s. Alpha Villas towards the premium for the acquisition of the shares of M/s. Bharathi Cements (then M/s. Raghuram Cements) was taxable u/s 56 by holding that the investment of M/s. Alpha Villas and M/s. Alpha Avenues could be for availing benefits from the Govt. of AP for conducting activity of liaison work with company. Page 3 of 22  It clearly discussed the capacity of M/s. Bharathi Cements to command premium of Rs. 1440/- for its share and also held that M/s. Alpha Villas Pvt Ltd and M/s. Alpha Avenues Pvt Ltd do requisite income profile to make such huge investments.  Disclosure of Rs. 10 crores made by M/s. Alpha Villas Pvt Ltd during the survey by the Investigation Wing which was on a/c of investment from Kolkata based Shell Company. The Assessing Officer relying on the assessment order of M/s. Bharathi Cements held that the so-called premium was not for the value of the share. The premium amount was actually for other benefits and to be taxed u/s 56 income from other source'. Having concluded this, the Assessing Officer fixed the cost of acquisition of shares of M/s. Bharati Cements at Rs.10 per share and the cost price of 689649 Nos of shares worked out to be Rs.68,96,490/-. Calculation of the Capital gains by the Assessing Officer is as follows : Sale consideration on sale of 689649 shares @671.2 =Rs.46,28,92,409/- Less : Cost of Acquisition = Rs.68,96,490/- Taxable STCG = Rs.45,59,95,919/- The STCG was worked out to Rs.45,59,95,919/- was added as income by the Assessing Officer. 6.2 Before me, the Appellant submitted that it had acquired 6,89,649 shares of Rs.10/- each of M/s. Bharathi Cements Ltd during FY 2009-10 for a consideration of Rs.99,99,91,050/- including premium of Rs.99,30,94,560/- @ Rs 1,440/- per share. The shares were reflected in the balance sheet of the Appellant for FY 2009-10. The appellant submitted the copies of the share certificates. The Appellant has acquired 1,82,757 shares from secondary purchases and 5,06,892 shares directly from Bharathi Cements as follows: Shares acquired/ No. of Amount paid for Amount paid Total paid subscribed from shares face value for premium S.No 1 Secondary 68,965 6,89,650 9,93,09,600 9,99,99,250 purchase from M/s. Suguni Constructions 2 Secondary 1,13,792 11,37,920 16,38,60,480 16,49,98,400 purchase from Mr Y S Jaganmohan Reddy 3 Direct subscription 5,06,892 50,68,920 72,99,24,480 73,49,93,400 from Bharathi Cements (Rs.6,600 treated as misc. charges) Total 6,89,649 68,96,490 99,30,94,560 99,99,91,050 The appellant further submitted as follows :

A. In the assessment order of M/s. Bharathi Cement Corporation Pvt Ltd for AY 20110-11 dated 31.03.2013, the sums received by the company during AY 2010-11 only were dwelt upon. The sums paid by the Appellant for acquisition of secondary purchase were not Considered as the same were not paid to the company but to the shareholders of the company. Hence, it is submitted that the amounts of Rs.26,31,70,080/- paid towards premium for secondary purchase of shares should not have been disallowed by the Assessing Officer. B. The appellant submitted that the cost of acquisition of shares for the purpose of capital gains is exhaustively defined as "the amount actually paid for acquiring" such shares u/s. 55(2) (aa) ) of the IT Act. The Assessing Officer has not questioned the fact that the Appellant has not actually paid for acquiring the shares. The Appellant was allotted 5,06,892 shares and was issued share certificates. In fact, only after acquiring the shares, that the Appellant can sell them, offer the same for taxation. There are no provisions under the Income Tax Act where the Assessing Officer could disallow or reduce the costs actually paid for. There is no finding by the Assessing Officer of M/s. Raghuram Cements that the funds received towards the shares have been diverted by the said company. These funds were used to invest in plant and machinery, to give deposits and for other purposes to commence the production. In fact the company commenced production of cement during FY 2009-10. The appellant submitted that there are no reasons why the Assessing Officer should disallow the cost of acquisition in the form of premium. The relevant equity shares were acquired by the Appellant during FY 2009-10 and the same was verified vide order assessment order dated 15.03.2013. The appellant submitted that the Assessing Officer verified the sources for acquisition of the equity shares by the Appellant in the FY 2009- 10. The appellant submitted that no addition to the income returned made by the Assessing Officer in A.Y 2010-11. C. In the order of M/s Bharathi Cements for AY 2010-11 dated 31.03.2013, the Assessing Office noted that – "the Appellant and another group concern Alpha Villas do not have requisite income profile to make such huge investments" and also held that "the investment of Alpha Villas and Alpha Avenues could be for availing benefits from the Govt of AP for conducting activity of liaison work with company". Such a noting is self-contradictory and is not based on facts. The Assessing Officer used the phrase "could be" implying that he pre-supposes or assumes that the amounts were paid not for equity but for some benefits, but is not very certain of such assumption. The appellant submitted that an assessment cannot be done on plausibility, assumptions or surmises it has to be based on facts. The Assessing Officer has not proved that the investment by the Appellant was for availing benefits from the Government of AP. Further the appellant submitted that in this case, the Assessing Officer allowed deduction of the face value of the shares and only the premium was disallowed as in the case of M/s Raghuram Cements case. D. The Appellant also acquired 20,19,228 Equity Shares in M/s. Bharathi Cements Ltd (previously known as Raghuram Cements Ltd) @ Rs 104 per share including premium of Rs.18,98,07,432/ @ Rs 94 per share during FY 2007-08.The Appellant has reflected the same in its Balance Sheet since FY 2007-08 till FY 2009-10 and its case for FY 2007-08 was taken up for scrutiny and proceedings were concluded vide order dated 28.12.2010 and the sources for the acquisition thereof were not questioned. The Assessing Officer has allowed the premium of Rs.18,98,07,432/- paid for acquisition of those equity shares as deduction for arriving at the long-term capital gains. It is further submitted that the Assessing Officer has also not issued any show cause notice to the Appellant with regard to the proposed addition nor has he considered the submissions made by the Appellant. Thus the addition made by the Assessing Officer is legally invalid. E. The shares were reflected in the balance sheet of the Appellant for FY 2009-10. F. It is submitted that Section 56 of the IT Act envisages to tax the unjustified premium in the hands of the Company raising the equity. There is no provision in the Act to disregard or disallow Such part of premium as cost of acquisition in the hands of investor, in case the same is taxed in the hands of the Company u/s 56 of the IT Act. G. Subsequently, these shares were sold to a multi-national French Cement Company, resulting in surplus of Rs.274.95 crores, the appellant's share of consideration being Rs.181.82 crores. 6.3 I have gone through the submissions of the Appellant and analysis off the Assessing Officer. The cost of acquisition of shares, as defined in Section 55(2) (aa) (i) is – “the amount actually paid for acquiring the original financial asset”. There is no dispute, in this case, about the quantum of the amounts paid by the appellant for the acquisition of the shares, in question. The payments for acquisition of these shares were made during the immediately preceding FY 2009-10, relevant to the AY 2010-11, The assessment for the AY 2010-11 was completed u/s. 143 (3) on 15-03-2013 and later u/s.143(3) r.w.s.147 on 09.03.2015. The investment in these shares and the sources for such investment were examined and accepted. The point raised by the Assessing Officer that the appellant did not have the requisite income profile to make such a huge investment, therefore, has no bearing as far the question of quantum of investment is concerned. On issue of disallowance of the premium paid, as cost of acquisition, the Assessing Officer relied on the Assessment order in the case of M/s.Raghuram Cements (now M/s. Bharathi Cements), wherein the premium was assessed as income u/s.56 for the AY 2010-11. I do not find any legal support for relying on such treatment in that case and applying the same treatment in the appellant's case. There is no provision in the Income Tax Act to disallow the cost, including premium, incurred in acquiring the shares for working out the capital gain/loss. Even after the insertion of section 56(2) (viib), with effect from 1-4-2013 onwards, which authorizes the assessing of the excess premium as income in the hands of the Investee company. However, there is no corresponding/ parallel provision, enabling disallowance of cost in the hands of the investor.

The recipient company, M/s Raghuram Cement (now M/s Bharathi Cements), had gainfully invested the equity amounts, as well as the loan amounts for acquiring fixed assets for its own plant, to the tune of Rs.912 crores as on 315t March 2012. This cannot be concluded as, the funds were diverted for the interests of the appellant. The appellant submitted during the course of assessment proceedings before the Assessing Officer, that other companies, of its group companies, have invested during FYs 2006-07 to 2009-10, Rs.285.5 crores in M/s.Raghuram Cements (now M/s Bharathi Cements) for acquiring shares, constituting 14.55% of the total equity, and later during F.Y.2010-11 realised Rs.560.45 crores by selling those shares to a multinational French .Cement Company, resulting in surplus of Rs.274.95 crores, the appellant's share of consideration being Rs.181.82 crores. Also, the premium of Rs.94 per share, which was paid for acquisition during the FY 2007-08 was allowed towards cost of acquisition in the computation of long-term capital gain. In this background, I do not see any reason for disallowance of premium, in working out the cost of shares for the purposes of computation of short-term capital gains. The premium paid on acquisition in an earlier year of the shares of the same company, was allowed in the computation of the long term capital gains. Also it is very decisive to refer, to the observation of the Assessing Officer, that the 'investment could be for availing benefits from the Government of A.P. is, by itself, not a conclusive finding. The benefits, if any, could be in addition to the consideration already accrued to the appellant and has nothing to do with the computation of capital gains, under this appeal. In this scenario, I find the addition made by the Assessing Officer is not supported by any concrete evidence. Hence, the same is deleted. Ground Allowed.

5. Aggrieved with such order of the learned CIT (A) the Revenue is in appeal before the Tribunal by raising the following grounds: “(i) The learned CIT(Appeals) erred in deleting the addition made by the Assessing Officer under the head capital gains' on account of disallowance of share premium as cost of acquisition while computing the short-term capital gains from sale of shares of Bharati Cements Ltd during the year. (ii) The learned CIT (Appeals) ought to have considered that the Assessing Officer of Bharati Cements Limited held in the assessment of said company that the so called premium is not for the value of the shares issued but for other benefits and accordingly assessed the share premium as income from other sources in the hands of the said company.

(iii) The learned CIT (Appeals) ought to have further appreciated that the assessee has acquired the shares in question at a premium of Rs. 1,440/- during the years 2008-09 & 2009 as compared to acquisition of same shares at a premium price of Rs. 94/- during the year 2007-08 and within the short span of one year the said company cannot command premium of Rs.l,440/- for its share which clearly indicate that the premium was paid for some other benefits. (iv) The learned CIT (Appeals) failed to note that once premium is not paid for acquisition of shares as held in the assessment of said company and as is apparent from abnormal premium paid as compared to the shares acquired during the year 2007-08, the same cannot be treated as cost of acquisition of shares while computing short term capital gains from transfer of subject shares. (v) The appellant craves leave to add, delete, substitute and amend any ground of appeal before and/or at the time of hearing of the appeal. (vi) For these and other grounds that may be urged before/at the time of hearing of the appeal, it is prayed that the short-term capital gains as computed in the assessment order restricting the cost of acquisition be restored.”

6. The learned DR strongly challenged the order of the CIT (A) and filed the following written submission: “The following submissions are made for the kind consideration of Hon'ble ITAT with regard to the above appeal:

1.

2. It is humbly submitted that the following brief facts would reveal the true nature of the transaction: (i) Though M/s Bharati Cement Corporation Ltd did not commence operations (the operations commenced in September 2009), the assessee purchased 20,19,228 shares of M/s Bharati Cement Corporation Ltd (earlier known as Raghuram Cements Ltd) with face value of 10/- per share at 104/- per share during F.Y 2007-08 from a sister concern. Thereafter, during F.Y 2008-09, 68,965 shares were purchased from a sister concern. Subsequently during F.Y 2009-10, 1,13,792 shares were purchased from Shri Y.S Jagan Mohan Reddy Page 8 of 22 (promoter of Bharati Cement Corporation Ltd) and 5,06,892 shares were allotted by Bharati Cement Corporation Ltd in a private placement both at a price of 1450/- per share. There is no valuation of the share in any of the year which merits such a high price. (ii) Though it is claimed that the investment is in a high growth sector and the assessee group is claimed to be prudent investors, it is not known why shares of a company which even did not commence its operations are purchased at very high value though shares of public listed companies in the same sector (with higher capacity and profit making) were available on stock market at much lower value. (iii) It is humbly submitted that the shares were sold to Parcifim SAS, France on 16/04/2010 i.e immediately after the end of the year of purchase at 671.20/- per share. It is humbly submitted that acquisition of shares of Bharati Cement Corporation Ltd by Parcifim is not a overnight event and the due diligence process in such cases normally takes several months. Therefore, it is quite probable that the assessee purchased the shares at a very high value knowing fully well that it is certain that they would be sold at lesser value. (iv) The financials of the assessee also are not adequate to purchase shares at very high value and sell them within a short period at huge loss. Substantial amounts are shown as unsecured loans from sister concerns and one of the promoters of the assessee. However, almost the entire sale proceeds of the sale of shares including the alleged profits are reinvested in shares of M/s Jagati Publications Pvt Ltd at a huge premium of 340/- per share though the said company is a continuous loss making company. (v) The assessee had no role in negotiation or fixation of the price at which the shares are transferred to Parcifim. From the sequence of events, it is clear that the transactions are not in the nature of purchase and sale of shares and done purposely with a view to transfer funds irretrievably to the companies promoted by Shri Y S Jagan Mohan Reddy and his family members. The fact that the shares were purchased at exorbitant value to be sold in a short duration only to book short term capital loss, the assessee had no role in negotiation of the price at which shares are transferred to Parcifim and the sale proceeds were immediately reinvested in a group company promoted by Shri Y S Jagan Mohan Reddy clearly indicate that the money is irretrievably transferred to Shri Y S Jagan Mohan Reddy group and the transactions of purchase and sale are only sham transactions. (vi) It is also humbly submitted that the assessee and M/s Alpha Avenues Pvt Ltd were held to be conduits by the Hon'ble ITAT, Hyderabad in its decision dated 14/02/2018 in the own case of the assessee and M/s Alpha Avenues Pvt Ltd in & 1424/Hyd/2014. At paragraph 23 of the said decision, the Hon'ble |TAT held as follows: "The undisputed facts are that WPPL and Indu group are related parties and WPPL had invested in share capital of CPIPL, which in turn, had invested in the assessees before us and the assessees', in turn have invested the said amount in RCL and JPPL. The amount invested by CPIPL in the assessees' i.e AAPL and APPL is 14.99 crores each, which has in turn, has been invested by the assessees' into JPPL and RCL. Thus, it is clear that the assessees are the conduits for the investment of share capital in RCL and JPPL, and the number of share and the premium paid by the CPIPL to the assessees and by the assessees to RCL and JPPL 0s also the same. Thus, it is clear that the assessees' have not earned or retained any income to treat it as their income u/s 68 of the IT Act". (vii) The valuation report of Pani & Associates prepared in April, 2010 for the purpose of submission to RBI in the transaction of sale of shares to Parcifim determines the book value of each share of Bharati Cement Corporation Ltd at 68.13 using the NAV method. This report is prepared on the basis of unaudited financial results as on 31/03/2010. The valuer did not consider the audited financial results as on 31/03/2009 and 31/03/2008 because there were no commercial operations. The company incurred losses in the first year of its operation and the cumulative figure for the three years was a loss of 118.58 Cr. Even the value based on future projections of maintainable profit was 221/-. The assessee being a shareholder was surely in the knowledge of all the events and was in a well-informed position before purchasing shares at very high value and sell them within a short period for loss.

7. Reliance is also placed on the decision of Hon'ble Punjab & Haryana High Court in the case of Harjit Kaur [2014] 45 taxmann.com 186 (Punjab & Haryana), where in it was held that "the CIT(Appeals) ignored the surrounding facts and circumstances of the case and failed to properly appreciate the series of steps taken by the assessee appellants, as a whole and in an integrated manner, for the object of creating artificial loss. Such transactions involve the series of preconceived steps, the performance of each of which is depending on the others being carried out, in accordance with the common intention of the assessee appellants and the sad company who allotted the shares to the appellants, the nature and effect of the whole scheme has to be taken into consideration, in determining the true intent and nature of such share transactions ".

In light of the above, the appeal of the Department may kindly be allowed.

7. The learned Counsel for the assessee, on the other hand, heavily relied on the order of the CIT (A) and filed the following written submission: “5. The respondent has acquired 6,89,649 shares of Rs.10 each of Bharathi Cements Ltd during financial year 2009- 10 for a consideration of Rs.99,99,91,050 including a premium of Rs.99,30,94,560 @ Rs.1440 per share. The appellant has acquired 1,82,757 shares from secondary purchases and 5,06,892 shares directly from Bharathi Cements in the following manner: S.No Shares No. of Amount paid Amount paid acquired/subscribed shares for face value for premium from 1 Secondary purchase 68,965 6,89,650 9,93,09,600 from M/s. Suguni Constructions 2 Secondary purchase 1,13,792 11,37,920 16,38,60,480 from Mr. Y.S. Jaganmohan Reddy 3 Direct subscription 5,06,892 50,68,920 72,99,24,480 from Bharathi Cements Total 6,89,649 68,96,490 99,30,94,560 The shares were reflected in the balance sheet of the Respondent for financial year 2009-10 at page 77 of the Paper Book filed before your Honours.

6. During the assessment year 2011-12, the Respondent sold the shares of Bharathi Cements and offered to tax the net long-term capital gains of Rs.54,32,56,728/- after setting off the short-term capital loss of Rs.53,70,98,641/-. The learned Assessing Officer disallowed the cost of acquisition for the claim of short-term capital loss of Rs.99,99,91,050/- based on the order passed u/s 143(3) of the Act in the case of M/s. Bharati Cements for A.Y 2010-11.

7. The respondent submits that, for the year under consideration, there is no provision in the Act to disregard or disallow such part of premium as cost of acquisition in the hands of investor, in case the same is taxed in the hands of the Company u/s 56 of the IT Act, 1961.

8. The cost of acquisition of shares for the purposes of capital gains is exhaustively defined as “the amount actually paid for acquiring” such shares u/s Page 12 of 22 55(2)(aa)(i) of the Act. The learned Assessing Officer has not questioned the fact that the Appellant has not actually paid for acquiring the shares. The appellant was allotted 5,06,892 shares and was issued share certificates. There are no provisions under the Income Tax Act where the learned Assessing Officer could disallow or reduce the cost actually paid for. There is no finding by the learned Assessing Officer of M/s. Bharati Cements that the funds received towards the shares have been diverted by the said company. These funds were used to invest in plant & machinery, to give deposits and for other purposes to commence the production. Hence, there are no reasons, why the learned Assessing Officer should disallow the cost of acquisition in the form of premium.

9. He submitted that the Tribunal in the said decision has held that there is no evidence to prove that anything wrong or passing of illicit consideration or quid-pro-arrangement amongst the respondent group companies and accordingly the addition was deleted. He accordingly submitted that there is no quid-pro- arrangement as alleged by the Assessing Officer. Further, the action of the Assessing Officer that section 56 of the Act has been invoked in the case of Bharathi Cements Ltd for the share premium paid by the respondent cannot be the basis for disallowing the premium which forms part of the cost of acquisition. He accordingly submitted that the order of the learned CIT (A) be upheld, and the grounds raised by the Revenue should be dismissed.

ITA 1107/Hyd/2017 – A.Y 2011-12 (Alpha Avenues (P) Ltd). 15. The grounds raised by the Revenue for the A.Y 2011- 12 reads as under: “(i) The learned CIT(Appeals) erred in deleting the addition made by the Assessing Officer under the head capital gains' on account of disallowance of share premium as cost of acquisition while computing the short-term capital gains from sale of shares of Bharati Cements Limited during the year.

(ii) The learned CIT (Appeals) ought to have considered that the Assessing Officer of Bharati Cements Limited held in the assessment of said company that the so-called premium is not for the value of the shares issued but for other benefits and accordingly assessed the share premium as income from other sources in the hands of the said company. (iii) The learned CIT (Appeals) ought to have further appreciated that the assessee has acquired the shares in question at a premium of Rs. 1,440/- during the years 2008 09 & 2009 as compared to acquisition of same shares at a premium price of Rs.94/- during the year 2007-08 and within the short span of one year the said company cannot command premium of Rs.1,440/- for its share which clearly indicate that the (iv) The learned CIT (Appeals) failed to note that once premium is not paid for acquisition of shares as held in the assessment of said company and as is apparent from abnormal premium paid as compared to the shares acquired during the year Page 20 of 22 2007-08, the same cannot be treated as cost of acquisition of shares while computing short term capital gains from transfer of subject shares. (v) The appellant craves leave to add, delete, substitute and amend any ground of appeal before and/or at the time of hearing of the appeal. (vi) For these and other grounds that may be urged before/at the time of hearing of the appeal, it is prayed that the short term capital gains as computed in the assessment order restricting the cost of acquisition be restored.”

Order pronounced in the Open Court on 12th June, 2023.