Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: ACCOUNTING STANDARDS :: VAT RATES :: Central Excise rule to resale the machines to a new company :: cpt :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: form 3cd :: due date for vat payment :: ACCOUNTING STANDARD :: articles on VAT and GST in India :: VAT Audit :: TDS :: empanelment :: TAX RATES - GOODS TAXABLE @ 4% :: ARTICLES ON INPUT TAX CREDIT IN VAT :: list of goods taxed at 4%
 
 
Placements & Empanelment »
  New Opening Analyst/sr.analyst-ratings for a Leading Credit Rating Agency
 New Opening Analyst/sr.analyst-ratings for a Leading Credit Rating Agency
 New Opening Chartered Accountant with 2 + Years of Experience, Fresher
 New Opening Assistant Manager / Sr. Executive - Finance & Accounts
 New Opening Industrial Trainee for CA/ Chartered Accountant
  100 Opening Financial Analysts at XL Dynamics India Pvt. Ltd.
 New Opening Senior Accountant / Accountant / Account Executive Vlcc
 New Opening Urgent Opening Qualified Chartered Accountant (CA)
  100 Opening Financial Analysts at XL Dynamics India Pvt. Ltd.
 New Opening Professor - Public Financial Management
 New Opening Associate Professor - Public Financial Management

Acit, Circle-47(1), New Delhi 426, Mayur Bhavan, New Delhi Vs. Sh. Sanjeev Mathur, C-2-301, Uniworld Citi South City, Sector-30, Gurgaon (Haryana)
July, 22nd 2015
                                                       ITA NO. 5560/Del/2010


                 IN THE INCOME TAX APPELLATE TRIBUNAL
                      DELHI BENCH "H", NEW DELHI
                BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER
                                  AND
                  SHRI J.S. REDDY, ACCOUNTANT MEMBER
                    I.T.A. No. 5560/DEL/2010
                           A.Y. : 2004-05
ACIT, CIRCLE-47(1),                       SH. SANJEEV MATHUR,
NEW DELHI                           VS. C-2-301, UNIWORLD CITI
426, MAYUR BHAVAN,                        SOUTH CITY, SECTOR-30,
NEW DELHI                                 GURGAON (HARYANA)
                                          (PAN: AGBPM4921D)
(APPELLANT)                                 (RESPONDENT)

            Department by            :   Sh. J.P. CHANDRAKER, Sr. DR
             Assessee by             :   Sh. R.S. SINGHVI, CA


                             ORDER
PER H.S. SIDHU : JM
     This appeal by the Revenue is directed against the Order of
the Ld. Commissioner of Income Tax (Appeals)-XXX, New Delhi
dated 29.9.2010 pertaining to assessment year 2004-05 on the
following grounds:-

     "On the facts and circumstances· of the case and in law, the
     Ld.CIT(A) has erred in:-

     (i)     directing the Assessing Officer (AO) to accept the capital
     gain arising from the sale of shares acquired under the stock
     option plan of M/s Microsoft Corporation as long term capital
     gain without considering the detailed and elaborate reasoning
     given by the AO and the JCIT in treating the said capital gain as
     short term;

     (ii)    holding that the AO had no further jurisdiction to decide
     the issue afresh and that the only direction from the Tribunal


                                    1
                                                       ITA NO. 5560/Del/2010


     was for verification of dates of acquisition of bonus shares
     which is wrong on facts (a) as the AO made the assessment u/s
     143(3)/254 solely as per the directions given by the Tribunal
     i.e. to verify the correctness of the dates of allotment of shares
     and to pass the consequential order, (b) date of allotment is
     not the same as that of date of vesting:

     (iii)    erred in holding that only ground before the Tribunal was
     in respect of furnishing of additional evidence whereas the
     main ground of appeal before the Hon'ble ITAT, as taken by
     the department, was against the order of Ld.CIT(A) holding the
     capital gain as long term capital gain and within the same
     ground of appeal, the fact of admission of additional evidence
     by the Id.CIT(A) had been mentioned.

     The appellant craves the right to alter, amend, add or
     substitute the grounds of appeal."

2.   The brief facts       of the case are that the assessee filed his
return       of   income    on   10.9.2004    admitting    income        of
Rs.1,46,44,703/-. The return was processed and subsequently
selected for scrutiny assessment. During the course of assessment
proceedings the AO         noticed that the assessee has sold shares
purchased in `Stock Option Plan'. On examination of the details filed
by the Assesseee, the AO came to the conclusion that the same was
assessable as Short Term Capital Gain amounting to Rs. 94,12,649/-
Aggrieved by the same, assessee appealed before the CIT(A), who
vide impugned order dated 17.5.2007 has held that the assessee
placed on record all the necessary evidences in the form of original
agreement for allotment of stock option and accumulation of the
shares through bonus from time to time. All these shares were held
for more than one year and as such the transaction is to be treated


                                     2
                                                     ITA NO. 5560/Del/2010


as in the nature of long term capital gain which is covered by the
Delhi Tribunal decision in the case of Alok Kumar vs. JCIT 13 SOT
706.    Aggrieved with the aforesaid order, Revenue filed an appeal
before the Tribunal and the Tribunal in its First round vide ITA No.
3557/Del/2007 (AY 2004-05) [wrongly mentioned as AY 2003-04
vide order dated 25.6.2008 has remitted the case to the file of the
AO for verification of dates stated by the assessee.     The Tribunal
also observed that if dates of allotment of shares are found to be
correct, the AO is directed to accept the claim of the assessee
relating to long term capital gain with the direction to pass
consequential order.

2.1    Pursuant to the directions of the ITAT dated 25.6.2008, AO in
the second round computed the income at an assessed income of
Rs. 1,46,54,700/- vide his order dated 31.3.2009 u/s. 143(3)/254 of
the I.T. Act, 1961. Aggrieved with the above, Revenue again filed the
Appeal before the Ld. CIT(A), who vide impugned order dated
29.9.2010 has directed the AO to accept the Long Term Capital
Gain. Aggrieved with the Ld. CIT(A) order, the Revenue has come
before the Tribunal again and in the Second round the Tribunal in
ITA No. 5560/Del/2010 (A.Y. 2004-05) vide order dated 25.10.2011
has dismissed the order of the Revenue by confirming the action of
the Ld. CIT(A).

2.2    Against the order of the Tribunal dated 25.10.2011, Revenue
has filed the Appeal before the Hon'ble High Court of Delhi in ITA No.
417/2012 vide order dated 15.7.2013 has remanded the matter
back to the Tribunal for deciding whether the findings recorded by
the AO on the question of date of allotment are correct or not and
directed the parties to appear before the Tribunal on 12.8.2013.




                                  3
                                                         ITA NO. 5560/Del/2010


2.3    Against   the    impugned final   judgment      and    order    dated
15.7.2013 of the Hon'ble High Court of Delhi in ITA No. 417/2012,
the Assessee, Sh. Sanjeev Mathur has preferred a Petition for
Special Leave to Appeal (CC) No. 6145 of 2014 before the Hon'ble
Supreme Court of India and the Hon'ble Supreme Court of India vide
judgment dated 3.7.2014 has passed the following order:-

                  "Delay condoned.

                  We do not find any reason to entertain this petition.
                  The     Special   Leave   Petition    is,   accordingly,
                  dismissed.

                  However, we clarify that while deciding the case,
                  the Tribunal shall not be influenced                by the
                  observations made by the High Court in its
                  impugned order and it shall decide the matter on
                  the facts and merits of the case."

3.     Pursuant to the      judgment dated 3.7.2014 of the Hon'ble
Supreme Court of India, the case was heard before the Tribunal.

4.     Ld. DR relied upon the order of the AO and reiterated the
contentions raised in the grounds of appeal. He submitted that the
Ld. CIT(A) was wrong in directing the AO to accept the capital gain
arising from the sale of shares acquired under the stock option plan
of M/s Microsoft Corporation as long        term capital gain without
considering the detailed and elaborate reasoning given by the AO
and the JCIT in treating the said capital gain as short term.             He
further submitted that Ld. CIT(A) was wrong in holding that the AO
had no further jurisdiction to decide the issue afresh and that the
only   direction from the Tribunal was for verification of dates of
acquisition of bonus shares which is wrong on fact (a) as the AO

                                     4
                                                        ITA NO. 5560/Del/2010


made the assessment u/s. 143(3)/254 solely as per the directions
given by the Tribunal i.e. to verify the correctness of the dates of
allotment of shares and to pass the consequential order, (b) date of
allotment is not the same as that of date of vesting.




5.   On the contrary, Ld. Counsel for the Assessee relied upon the
order of the Ld. CIT(A) and requested that the same may be upheld.
To support his contention, he relied upon the following judgments
from which his case is squarely covered.

           a)     Abhiram Seth vs. JCIT (2013) 79 DTR 63 (Delhi ITAT)

           b)     ACIT vs. Ambrish Jhamb (Delhi ITAT) ITA No.
                  4107/D/11 dated 5.10.2012.

           c)     Sh. Gopi G. Nambiar vs. JCIT (Delhi ITAT) ITA No.
                  1083/D/2010 dated 26.7.2013.

           d)     ACIT vs. Laxman Shankar      (ITAT, Mumbai) ITA No.
                  8697/Mum/2011 dated 5.12.2014.

           e)     ACIT vs. Sh. Param Paul Uberoi (Delhi ITAT) ITA No.
                  4477/D/11 dated 13.4.2012.

           f)     ACIT vs. Dr. Dhurjati Gupta [2010] 127 TTJ 356 (ITAT
                  Hyd.)

6.   We have heard both the parties and perused the relevant
records, especially the orders of the authorities below and the
submissions made by both the parties before us alongwith the order
/ judgment of the Hon'ble Delhi High Court and the Hon'ble Supreme
Court of India.   Now we find that the AO in the first round while
completing the assessment u/s. 143(3) of the I.T. Act, 1961 vide
order dated 29.10.2006 has treated the shares purchased in 'Stock
Option Plan" as Short     Term Capital Gain and Ld. CIT(A) vide his

                                   5
                                                            ITA NO. 5560/Del/2010


order dated 17.5.2007 has held that all the shares were held for
more than one year and as such the transaction is to be treated as
in the nature of long term capital gain which is covered by the Delhi
Tribunal decision in the case of Alok Kumar vs. JCIT 13 SOT 706.
Against the order of the Ld. CIT(A), Revenue came up before the
Tribunal and Tribunal vide its order         dated 25.6.2008 in ITA No.
3557/Del/2007 vide para nos. 5 to 7 has held as under:-

           "5. The Revenue is aggrieved.            The only argument
           advanced on behalf of the Revenue by the Ld. DR was
           that    the    CIT(A)   during    the   course      of   appellate
           proceedings erroneously admitted additional evidence in
           violation of Rule 46A(3) of I.T. Rules. Certain documents
           not filed before the AO were taken into account and relief
           allowed to assessee.          No opportunity whatsoever was
           provided to the AO to rebut the claim of the assessee.
           The Ld. DR also placed on record letter dated 11/13th
           June, 2008 written by the AO to the above effect to the
           Ld. DR. The Ld. Counsel for the assessee strongly
           contradicted above claim of the revenue. He stated that
           no additional evidence was filed before the Ld. CIT(A). He
           specifically contended that the detail of the bous shares
           allotted to the assessee by the company were given on
           page 9 which was filed before the AO. The date of
           acquisition of bonus shares as per above document is as
           under:-

                  "Vesting Scheduled
                  This grant is fully vested:
                  Quantity    Description            Date
                  1,328       Vested on              7.15.1997


                                     6
                                                ITA NO. 5560/Del/2010


       1,320       Vested on                 1.15.1998
       1,320       Vested on                 7.15.1998
       1,320       Vested on                 1.15.1999

       1,318       Vested on                 7.15.1999

       1,318       Vested on                 1.15.2000

       1,318       Vested on                 7.15.2000

       1,318       Vested on                 1.15.2001"



6.     All the aforesaid shares were sold on 18.6.03.
Thus, it is wrong on the part of the revenue to contend
that the assessee earned short term gain or that
additional evidence was filed before the Ld. CIT(A).

7.     We   have    given    careful    thought   to    the    rival
submissions of the parties. There is no dispute on the
amount of capital gain liable to be taxed in the hands of
the assessee. The dispute is whether capital gain of Rs.
94,12,649/- is short term or long term capital gain. The
assessee has given the dates of acquisition of bonus
shares which were sold and on which capital gain                  in
dispute accrued to the assessee. The dates are given on
page 9 of the paper book and have been reproduced
above. During the course of hearing, the Ld. DR
submitted that above dates are required to be verified by
the AO. Ld. Counsel for the assessee Shri Singhvi was
good    enough     to   agree   to     the   limited   extent     of
verification by the AO of the dates of allotment of bonus
shares. The matter for the above limited purpose may be
remitted back to the AO.          No other claim was made

                         7
                                                       ITA NO. 5560/Del/2010


           before us. In the light of stand of the parties, we remit
           the case   to the file of the AO for verification of dates
           stated by the assessee as noted above. If dates of
           allotment of shares are found to be correct, the AO is
           directed to accept the claim of the assessee relating to
           long term capital gain. He should pass consequential
           order."

6.1   Pursuant to the aforesaid directions of the ITAT vide order
dated 25.6.2008, AO in the second round computed the income at
an assessed income of Rs. 1,46,54,700/- vide his order dated
31.3.2009 u/s. 143(3)/254 of the I.T. Act, 1961 by holding as under:-

           "7. Now considering        overall facts of the case and

           evidence furnished by the assessee i.e. in the form of

           page 9 of the Paper Book and the above directions of the

           JCIT, R-47, the consequential order is passed.              The

           assessee has intimated the date of exercise of option as

           18.6.03 in the document produced. This date is taken as

           the date of allotment of shares in question which were

           vested with the assessee as per dates mentioned in para

           3 above. These shares are also sold on 18.6.03 itself and

           the sale proceeds received in the accounts of the

           assessee on 25.6.03.       This is clearly a case of STCG as

           the shares are held for less than 12 months after the date

           of allotment. As such claim of the assessee relating to

           long term capital gain cannot be accepted."


                                  8
                                                      ITA NO. 5560/Del/2010


6.2   Aggrieved with the above, Revenue again filed the Appeal

before the Ld. CIT(A), who vide impugned order dated 29.9.2010 in

para no. 5 at pages 6 to 8 has held as under:-


           "5.   I have carefully considered the facts of the case,
           submission of the appellant and various orders placed on
           record.   There is no dispute that only ground before
           Tribunal was in respect of furnishing of additional
           evidence and the matter was restored for limited purpose
           of verification of dates referred to in annexure-9 which
           has been extracted in the order of the Tribunal itself.
           There has been no ground, submission or finding of the
           Tribunal on the merits of the case and the matter was
           restored by Hon'ble Tribunal for limited purpose of
           verification to in annexure-9 of the paper book.           The
           finding of the Tribunal as recorded in para 5-7 clarify the
           factual position to this effect. The only direction was for
           verification of dates of acquisition of bonus shares and
           there has been no finding or direction in relation to merits
           of the claim.

                 In the consequential order, the AO has not disputed
           the correctness of dates referred to in Annexure-9 and in
           the context of same, the issue on merits stand concluded
           and final as per order of the CIT(A) dated 17/5/07.

                 In fact, the Hon'ble Tribunal in the miscellaneous
           application itself has also made observation that merely
           because AO has allegedly misread the order of the
           Tribunal, there could be no case of modification or
           rectification of order of the Tribunal as direction of the


                                  9
                                                               ITA NO. 5560/Del/2010


           Tribunal        was    specific    and   for   limited   purpose      of
           verification of dates.

                 After taking into consideration all the relevant facts,
           I am of the considered opinion that once the verification
           in respect of dates referred to in Annexure are carried out
           and there is no dispute about correctness of same, the
           AO has no further jurisdiction to decide the issue afresh
           on merits.        The order of the AO on merits is not in
           conformity with the direction of the Tribunal as the
           Tribunal has no where issued direction to re-examine the
           merits     of    the    claim     and only      direction was        for
           verification of dates of acquisition of bonus shares in
           respect of which there is no dispute or controversy. On
           the merits of the claim, the issue is final as per order of
           the CIT(A) and accordingly AO is directed to accept the
           long term capital gain."

6.3   Against the order of the Ld. CIT(A), the Revenue has come
before the Tribunal again and in the Second round the Tribunal in
ITA No. 5560/Del/2010 (A.Y. 2004-05) vide order dated 25.10.2011
has dismissed the order of the Revenue by confirming the action of
the Ld. CIT(A) by holding as under:-

           "6.   We have heard the parties and have perused the
           material on record. The Tribunal remitted the matter by
           making the following observations:-

                 "We have given careful thought to the rival
                 submissions of the parties. There is no dispute on
                 the amount of capital gain liable to be taxed in the
                 hands of the assessee.              The dispute is whether
                 capital gain of Rs. 94,12,649/- is short term or long

                                        10
                                         ITA NO. 5560/Del/2010


     term capital gain.     The assessee has given the
     dates of acquisition of bonus shares which were
     sold and on which capital gain in dispute accrued to
     the assessee. The dates are given on page 9 of the
     paper book and have been reproduced above.
     During the course of hearing, the Ld. DR submitted
     that above dates are required to be verified by the
     AO. Ld. Counsel for the assessee Shri Singhvi was
     good enough to agree to the limited extent of
     verification by the AO of the dates of allotment of
     bonus shares.     The matter for the above limited
     purpose may be remitted back to the AO.      No other
     claim was made before us. In the light of stand of
     the parties, we remit the case to the file of the AO
     for verification of dates stated by the assessee as
     noted above. If dates of allotment of shares are
     found to be correct, the AO is directed to accept the
     claim of the assessee relating to long term capital
     gain. He should pass consequential order."




7.   From the above, it is evident that the directions
     issued by the Tribunal were very specific and clear.
     The same have also been reproduced, along with
     para 4 of the Tribunal's order, at pages 5 & 6 of the
     impugned order.

8.   As correctly observed by the Ld. CIT(A), the matter
     was restored only for the limited purpose of
     verification of dates referred to in Annexure 9, as
     reproduced in the Tribunal order. This is the vesting
     Schedule. The Tribunal did not either make any
     observation or     record any finding apropos the

                       11
                                                          ITA NO. 5560/Del/2010


                merits of the case. The AO was only to carry out
                the verification of the dates referred to at page 9 of
                the Assessee's Paper Book as filed before the
                Tribunal.   The correctness of the dates were not
                disputed in the order passed by the AO consequent
                on    the   remand.     This   position   has     remained
                unhinged. So far as regards the merits, they were
                decided by the ld. CIT(A) vide his order dated
                17.5.07. Even in the misc. application filed before
                the   Tribunal,   the   Tribunal   observed       that    the
                directions issued were specific, for the limited
                purpose of verification of dates and that the AO had
                misread the Tribunal order.

           9.   In the above facts and circumstances, we do not
                find any error whatsoever in the order of the Ld.
                CIT(A), which is hereby confirmed, rejecting the
                grievance sought to be raised by the Department."

6.4   Against the order of the Tribunal dated 25.10.2011, Revenue
filed the Appeal before the Hon'ble High Court of Delhi vide ITA No.
417/2012. The Hon'ble High Court of Delhi vide order dated
15.7.2013 has remanded the matter back to the Tribunal for
deciding whether the findings recorded by the AO on the question of
date of allotment are correct or not and directed the parties to
appear before the Tribunal on 12.8.2013.

6.5   Against the judgment and order dated 15.7.2013                  of the
Hon'ble High Court of Delhi in ITA No. 417/2012, the Assessee, has
preferred a Petition for Special Leave to Appeal (CC) No. 6145 of
2014 before the Hon'ble Supreme Court of India and the Hon'ble



                                  12
                                                        ITA NO. 5560/Del/2010


Supreme Court of India vide its judgment dated 3.7.2014 has
passed the following order:-

                  "Delay condoned.

                  We do not find any reason to entertain this petition.
                  The    Special   Leave   Petition    is,   accordingly,
                  dismissed.

                  However, we clarify that while deciding the case,
                  the Tribunal shall not be influenced            by the
                  observations made by the High Court in its
                  impugned order and it shall decide the matter on
                  the facts and merits of the case."

6.6    In compliance of the order dated 03.7.2014 passed by the
Hon'ble Supreme Court of India, the present appeal was heard at
length.     After hearing   both the parties and perusing the records
especially the orders of the revenue authorities, Tribunal, Hon'ble
High Court and the Hon'ble Supreme Court of India, we are of the
considered view that the issue in dispute in the present appeal is
whether the assessee has gained short term capital gain or long
term capital gain on the sale of shares under Stock Option Plan.
Assessee has filed his evidences before the revenue authorities for
substantiating his claim before them and the revenue authorities
has also gave their opinion which remained under appeal before the
Tribunal, Hon'ble High Court and the Hon'ble Supreme Court of
India. Finally, the Hon'ble Supreme Court of India has directed the
Tribunal to decide the matter on facts as well as on merit without
influence by the observations made by the Hon'ble High Court. We
have      thoroughly   examine the issue in dispute alongwith finding
given by the      revenue authorities and we find that the issue in
dispute require detailed examination at the level of the Assessing

                                   13
                                                      ITA NO. 5560/Del/2010


Officer. Therefore, in the interest of justice, the issue in dispute is
remitted back to the file of the AO with the direction to examine the
issue in dispute de novo, after giving full opportunity to the assessee
of being heard.

7.    In the result, the Appeal filed by the Revenue stands allowed

for statistical purposes.


      Order pronounced in the Open Court on 21/7/2015.

      Sd/-                                              Sd/-

[J.S. REDDY]                                      [H.S. SIDHU]
ACCOUNTANT MEMBER                              JUDICIAL MEMBER

Date 21/7/2015
"SRBHATNAGAR"



Copy forwarded to: -
1.    Appellant -
2.    Respondent -
3.    CIT
4.    CIT (A)
5.    DR, ITAT
                            TRUE COPY
                                                  By Order,




                                                  Assistant Registrar,
                                                  ITAT, Delhi Benches




                                  14

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Software Outsourcing Company Offshore Software Outsourcing Software Outsourcing Company India Offshore Outsourcing Company India Software BPO Software Business Process Outsourcing Software Outsourcing India Offsho

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions