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Income Tax Appellate Tribunal, ‘B’ BENCH: BANGALORE
Before: SMT. P. MADHAVI DEVI & SHRI ABRAHAM P GEORGEShri Vikram Viswanath,
This is an appeal filed by the assessee against the order of the CIT(A)-III, Bangalore, dated 31/01/2013 for the assessment year 2009-10.
Brief facts of the case are that the assessee, an individual, filed his return of income on 31/3/2010 declaring
Shri Vikram Viswanath. Page 2 of 4 income of Rs.46,35,392/-. During the assessment proceedings u/s 143(3) of the Income-tax Act, 1961 [hereinafter referred to as 'the Act' for short], the Assessing Officer (AO) observed that the assessee had computed long term capital gain on account of transfer of shares held in Vikram Logistics and Maritime Services Pvt. Ltd.,(VLMS) to M/s.Anuradha Holdings (P) Ltd., on account of transfer of business as a going concern. The assessee claimed exemption u/s 47(xiv) of the Act in respect of the above long term capital gains. The AO declined to accept the claim of the assessee with regard to the exemption u/s 47(xiv) of the Act alleging that the shares held by the in VLMS were not business assets and consequently the capital gains arising from transfer of the above shares was not liable to be exempted u/s 47(xiv) of the Act.
The same was challenged before the CIT(A) who upheld the order of the AO and the assessee further appealed before the Tribunal wherein the Tribunal had held that the same is not exigible to tax. Against the same, the revenue preferred an appeal before the Hon’ble High Court of Karnataka and the Hon’ble High Court vide order dated 30/7/2014 confirmed the order of the Tribunal. Meanwhile, while the assessee’s appeal was pending before the CIT(A), the assessee had made an application u/s 154 of the Act stating that there was no transfer of shares in the relevant assessment year 2009-10 though the assessee had computed capital gains to seek exemption u/s Shri Vikram Viswanath. Page 3 of 4 47(xiv) of the Act. According to the assessee, the transfer had taken place in the next year i.e. on 3/2/2010 and stamp duty had been paid on the same date proves that the transfer is in the subsequent year. The assessee, therefore, sought rectification of the order of the AO. The AO rejected the assessee’s contention against which the assessee preferred an appeal before the CIT(A) who confirmed the order of the AO and the assessee is in second appeal before us.
At the time of hearing, the learned counsel for the assessee submitted that since the issue of exemption from taxability of the long term capital gain has been decided in favour of the assessee by the Hon’ble High Court of Karnataka and it was held that the same is not chargeable to tax, the issue of year of taxability has become infructuous. He, therefore, submitted that the appeal before the Tribunal may be dismissed as infructuous.
The learned Departmental Representative, however, prayed that the appeal may be dismissed holding that the application u/s 154 was not maintainable.
Having regard to the rival contentions and the material on record, we find that the assessment completed u/s 143(3) rejecting the exemption claimed by the assessee has been set aside by the Hon’ble High Court. The issue of year of taxability was not disputed before the AO during the assessment
Shri Vikram Viswanath. Page 4 of 4 proceedings u/s 143(3). It was only by the rectification application that the assessee had prayed for consideration of the year of taxability to be the next year. Since the original assessment order itself has been set aside by the Hon’ble High Court and it has been held that the capital gains is not chargeable to tax, the issue of the year of taxability at this stage would only be an academic issue. Therefore, in our opinion, this appeal is infructuous at this stage.
In view of the same, the assessee’s appeal is dismissed as infructuous.