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Income Tax Appellate Tribunal, DELHI BENCH: ‘D’ NEW DELHI
Before: SHRI SAKTIJIT DEY & DR. B.R.R. KUMAR
Date of hearing 28.06.2022 Date of pronouncement 08.07.2022 ORDER PER SAKTIJIT DEY, JM:
This is an appeal by the Revenue against order dated 19.12.2016 of learned Commissioner (Appeals)-42, New Delhi, for the assessment year 2012-13.
The only effective ground raised by the assessee reads as under:
“Whether the Ld. CIT (A) has erred in law and on facts of the case in holding that the assessee is entitled to benefit of proviso to section 112(1) of the Act on sale of the equity shares in question.”
We have heard Sh. Percy Pardiwalla, learned Senior Counsel appearing for the assessee and Ms. Sapna Bhatia, learned Departmental Representative. The basic dispute between the assessee and the Revenue is with regard to the rate of tax on the amount of capital gain. As could be seen from the facts on record, during the year under consideration, the assessee transferred eqity shares of Cairn India Ltd. (CIL) to Twin Star Mauritius Holdings Ltd. in an off-market transaction and earned long term capital gain of Rs.1,21,38,22,15,541/-. The purchaser of equity shares deducted tax at source by applying the rate of 20% on the amount of capital gain. However, in the return of income filed for the impugned assessment year, the assessee applied the tax rate of 10% on the capital gain by taking recourse to the proviso to section 112(1) of the Act and claimed refund of the excess TDS. The Assessing Officer disallowed assessee’s claim.
Being aggrieved, the assessee preferred an appeal before learned Commissioner (Appeals. Agreeing with the submissions made by the assessee, learned Commissioner (Appeals) directed the Assessing Officer to tax the capital gain at the rate of 10%.
Before us, learned Senior Counsel for the assessee submitted that the issue is squarely covered by the decision of the Hon’ble Jurisdictional High Court in case of Cairn UK Holdings Ltd. Vs. DIT in Writ Petition (Civil) No. 6752/2012, dated 07.10.2013, wherein, it has been held that the assessee is entitled to claim benefit of reduced tax rate under section 112(1) of the Act.
Learned Departmental Representative could not controvert the aforesaid submission of learned Senior Counsel.
Having considered rival submissions and examined the decision of the Hon’ble Jurisdiction High Court in case of Cairn UK Holdings Ltd. Vs. DIT (supra), we find, the Hon’ble Delhi High Court after analyzing the provisions of section 48 and 112(1) of the Act has concluded that the assessee is entitled to avail the beneficial tax rate under section 112(1) of the Act. Thus, in view of the aforesaid binding precedent of the Hon’ble Jurisdictional High Court, we do not find any infirmity in the decision of learned Commissioner (Appeals). Ground is dismissed.
In the result, the appeal is dismissed.
Order pronounced in the open court on 8th July, 2022