ACIT, NEW DELHI vs. SHRI KANWAR SINGH TANWAR, NEW DELHI

The only substantial issue raised in this appeal is against the treatment of income of Rs.14,46,87,324/- on account of sale of shares of M/s Mudra Finance Ltd., as ‘Long-term capital gain’ as against ‘Income from other sources’ treated by the Assessing Officer.

Succinctly, the facts of the case, as recorded in the assessment order, are that a search and seizure action was carried out u/s 132 of the Income- tax Act, 1961 (hereinafter also called `the Act’) on 8.02.2013 in Kanwar Singh Tanwar group of cases which included the assessee as well. A survey u/s 133A was also conducted on 25.04.2013 at M/s Mudra Finance Ltd., which was having a land at Dharuhera, Gurgaon, for the development of residential flats. The AO recorded in para 5 of his order that the assessee transferred shares of M/s Mudra Finance Ltd., to three entities and the income therefrom was reflected as ‘Long-term capital gain’ of Rs.14,46,87,324/- in the year under consideration. He treated this income as arising from the normal business receipts and held it to be chargeable under the head ‘Income from other sources.’ The ld. CIT(A) noticed that shares of M/s Mudra Finance Ltd., were actually transferred in the succeeding year and, hence, the Assessing Officer erred in treating income 2

We have heard both the sides and perused the relevant material on record. It is obvious from the assessment order that the entire discussion focuses on the shares of M/s Mudra Finance Ltd., allegedly sold by the assessee in the previous year relevant to the assessment year under consideration, resulting into long-term capital gain of Rs.14.46 crore in the year. As against that, the ld. CIT(A) has recorded that the transfer of shares of M/s Mudra Finance Ltd., took place in the succeeding year and not the year in question.

We have gone through page Nos.8 and 9 of the paper book which are copy of Income-tax return and the Computation of income for the year under consideration. From such Income-tax return, it can be seen that no income from transfer of shares of M/s Mudra Finance Ltd., was offered by the assessee. Page Nos.11 and 12 represent Income-tax return and the Computation of income for the assessment year 2008-09. The assessee, in fact, as recorded by the ld. first appellate authority, declared income from transfer of shares of M/s Mudra Finance Ltd., under the head ‘Capital gains’ in its return for the assessment year 2008-09, which was stated to have been assessed accordingly. The ld. DR could not point out any factual inaccuracies in the position recorded in the impugned order. Thus, it is apparent that no transfer of shares of M/s Mudra Finance Ltd., took place during the year under in question warranting any consideration of the issue in the instant proceedings. We, therefore, uphold the impugned order on this score.

Having dealt with the issue on merits, there is no need to deal with the legal issue taken up in this appeal through ground no. 3 that the ld. CIT(A) erred in law in not sustaining the assessment order framed u//s 153A of the Act on the ground that no incriminating material was found in this regard.

In the result, the appeal of the Revenue is dismissed.