Income Tax Appellate Tribunal - Kolkata
Khaitan Consultants Ltd., Kolkata vs Department Of Income Tax on 8 July, 2016
1
IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH 'B' KOLKATA
[Before Hon'ble Shri N.V.Vasudevan, JM & Shri M.Balaganesh, AM ]
ITA No.2796/Kol/2013
Assessment Year : 2010-11
I.T.O., Ward-4(4), , -versus- M/s. Khaitan Consultants Ltd.
Kolkata Kolkata
(PAN:AABCK 3870 A)
(Appellant) (Respondent)
For the Appellant: Shri K.K.Tripathi, JCIT, Sr.DR
For the Respondent: Shri R.N.Bajoria, Sr.Counsel & Shri A.K.Gupta, FCA
Date of Hearing : 10.06..2016.
Date of Pronouncement : 08.07.2016
ORDER
PER N.V.VASUDEVAN, JM:
This is an appeal by the Revenue against the order dated 12.08.2013 of CIT(A) IV, Kolkata, relating to AY 2010-11.
2. Gr.No.1 & 2 raised by the Revenue reads as follows:
"1. The Ld. CIT( Appeal) is not justified in holding that the total consideration for sale of shares was Rs. 10,40,705/- only, ignoring the fact that the assessee had agreement for sale of shares of KCCL for Rs. 15,37,35,633/- comprising sale consideration of assessee of Rs. 4,97,25,928/-.
2. The Ld. CIT(Appeal ) has erred in law as well as on facts in applying the decision of Hon'ble Supreme Court in the case of CIT vs. Hooghly Mills Co. Ltd. ( 287 ITR 333) ignoring the fact that both the cases are totally different. In the case of Hooghly Mills the sale consideration was Rs.2 crores only and the vendee had to bear the statutory liability of gratuity of employees. However in this case as per agreement sale consideration itself included repayment of loan."
3. The facts and circumstances giving raise to Gr.No.1 & 2 raised by the Revenue are as follows:
(1) There was a company by name M/S.Avinash Organics Private Limited.
It acquired on 9.7.1997 property being 4th and 5th Floor measuring 1921 Sq.ft. each of premises known as Meher Chambers, situated at R.K.Marg, Ballard ITA No.2796/Kol/2013-M/s. Khaitan Consultants Ltd. A.Y.2010-11 2 Estate, Mumbai-400 001 together with proportionate undivided right, title and interest in the land over which the above premises were constructed.
(2) On and from 31.10.2001 the name of M/S.Avinash Organics Private Limited was changed to M/S.Khaitan & Co. Consulting Private Limited. On and from 12.4.2002, M/S.Khaitan & Co., Consulting Private Limited was changed to M/S.Khaitan & Co., Consulting Ltd.
(3) On 23.12.2009, M/S.Khaitan & Co., Consulting Ltd., acquired by a registered document the 3rd Floor measuring 1921 Sq.ft. of the premises known as Meher Chambers, situated at R.K.Marg, Ballard Estate, Mumbai-400 001 together with proportionate undivided right, title and interest in the land over which the above premises were constructed.
(4) The 3rd, 4th and 5th floor of known as Meher Chambers, situated at R.K.Marg, Ballard Estate, Mumbai-400 001 together with proportionate undivided right, title and interest in the land over which the above premises were constructed, owned by M/S.Khaitan and Co. Consulting Ltd., will hereafter be referred to as "the Property".
(5) The share capital of M/S.Khaitan & Co. Consulting Ltd., were held by the following persons:
Issued and Paid Up Equity Shares of Rs.10(Rupees Ten) each :
Sr.No. Name Number Distinctive %(Approx.)
of Shares Nos.
held in
the
Company
1. Mr.Ram Kishore 1 230671-230671 0.0004
Choudhury/Khaitan
Consultants Limited.
2. Mr.Sudip Mullick/ 1 230672-230672 0.0004
Khaitan Consultants
Limited.
3. Me.,Padam Khaitan/ 1 230673-230673 0.0004
Khaitan Consultants
Limited.
4. Mr.Haigreve Khaitan/ 50 230421-230470 0.021
Khaitan Consultants
Limited.
5. Mr.Ajoy Gupta/ 10 1-10 0.004
Khaitan Consultants
Limited.
6. Mr.Rabindranath 10 11-20 0.004
Jhunjhunwala/
ITA No.2796/Kol/2013-M/s. Khaitan Consultants Ltd. A.Y.2010-11
3
Khaitan Consultants
Limited.
7. Khaitan Consultants 230600 21-230420 99.97
Limited. 230471-230670
Total 230673 100.00
(6) As can be seen from the above chart the Assessee held 99.97% of M/S.Khaitain &Co.Consulting Ltd., was its holding company. The Assessee had given a loan of Rs.4,97,25,928 to M/S.Khaitan & Co.Consulting Ltd. (7) Mr.Gulabsi Ratansi Khimji and Ms.Devyani Gulabsi Bhatia (hereinafter referred to as "Purchasers") wanted to purchase the property. The sale could have been concluded by a deed of conveyance of the property by M/S.Khaitan & Co. Consulting Ltd., or alternatively, the purchasers could acquire 2,30,600 equity shares of M/S.Khaitan & Co.Consulting Ltd., which constitutes about 99.97% of the share capital of M/S.Khaitan & Co.Consulting Ltd., held by the Assessee, thereby gaining control and possession of the property without a registered deed of conveyance. The parties chose the second option of acquiring shares of M/S.Khaitan & Co.Consulting Ltd.
(8) A share purchase agreement dated 29.1.2010 was entered into between the Assessee, Purchasers and M/S.Khaitan &Co.Consulting Ltd., whereby it was agreed that the Assessee would sell his shareholding in M/S.Khaitan & Co.Consulting Ltd., to the Purchasers for a lump sum consideration of Rs.15,37,35,633. Clause 2, 2.1 & 2.2 of the Agreement dated 29.1.2010 is very vital for a decision of the dispute in the present case and it reads as follows:
"2. Sale and Purchase of Sale Shares 2.1 The Seller shall sell and transfer to the Purchasers and the Purchasers shall purchase and acquire from the Seller as a spot delivery contract all the Sale Shares for a lump sum consideration of Rs 15,37,35,633/- (Rupees Fifteen Crores thirty seven lakhs thirty five thousand six hundred and thirty three only) (hereinafter referred to as "Sale Consideration"), free from all encumbrance and charges, lien or demand whatsoever -but with the benefit of all rights, title and interest attached thereto.
2.2 On the Effective Date, the Purchasers shall pay the Sale Consideration to the Seller in the following manner:
2.2.1 a sum Of Rs 1,60,00,000 (Rupees One crore sixty lacs) has already been paid by the Purchasers to the Seller on or before the execution hereof, as Earnest Money towards the purchase of the Sale Shares in the Company vide Pay Order No. 516321 dated 3 September 2009 drawn on the Bank of Baroda, Nariman Point Branch, Mumbai in favour of the ITA No.2796/Kol/2013-M/s. Khaitan Consultants Ltd. A.Y.2010-11 4 Company (the receipt whereof the Seller does hereby admit and acknowledge);
2.2.2 a sum of Rs 1,00,00,000 (Rupees One crore) ("Escrow Amount") shall be paid by the Purchasers to and placed in escrow with the Escrow Agent, which shall be administered as per the provisions of clause 3 hereof;
2.2.3 a sum of Rs.4,S7,25,928 (Rupees Four Crores ninety seven lakhs twenty five thousand nine hundred twenty eight) to the Seller towards repayment of loans made by the Seller to the Company and such amount shall be treated as a loan repayment by the Company; and 2.2.4 balance amount of the Sale Consideration, being a sum of Rs.
7,80,09,705 (Rupees Seven Crores eighty lakhs nine thousand seven hundred and five) shall be paid by the Purchasers to the Seller simultaneously on execution hereof through a pay order or a banker's cheque made in favour of the Seller."
4. The Assessee declared Long term Capital Gain (LTCG) on sale of shares of M/S.Khaitan & Co.Consulting Ltd., by adopting the full value of consideration received on transfer as Rs.10,40,09,705. According to the Assessee though the sale consideration for sale of shares was Rs.15,37,35,633 as per the Agreement dated 29.1.2010, the real sale consideration for sale of shares was only Rs.10,40,09,705 because a sum of Rs.4,97,25,928 out of the sale consideration of Rs.15,37,35,633 mentioned in Clause-2 of the said Agreement, was a loan payable by M/S.Khaitan & Co.Consulting Ltd., to the Assessee and that was discharged by the Purchasers for and on behalf of M/S.Khaitan & Co.Consulting Ltd., and did not therefore constitute part of the sale consideration of the sale of shares. The Assessee pointed out that in its books the loan receivable of Rs.4,97,25,928 was shown as realized and the Purchasers in their books of accounts recognised M/s.Khaitan & Co.Consulting Ltd., as their creditor to the extent of Rs.4,97,25,928. The Assessee also pointed out that M/S.Khaitan & Co.Consulting Ltd., (whose name was subsequently changed by the Purchasers as Test Consultants Ltd., after their acquisition of the virtually the entire shareholding) recognised Mr.Gulabsi Ratansi Khimji as their creditore in their books of accounts. Thus the debt due to the Assessee from M/S.Khaitan & Co.Consulting ITA No.2796/Kol/2013-M/s. Khaitan Consultants Ltd. A.Y.2010-11 5 Ltd., stood discharged and that was not part of the sale consideration of sale of shares but was a realization of their outstanding from M/S.Khaitan &Co.Consulting Ltd. The Assessee submitted that the Agreement dated 29.1.2010 was a composite Agreement by which the Assessee wanted to sell shares and also secure repayment of the loan due by it from M/s.Khaitan & Co.Consulting Ltd. Therefore the sale consideration mentioned in the agreement was a composite sale consideration. Only a sum of Rs.10,40,09,705 was relatable to sale of shares and the remaining sum was nothing but realization of loans due to it which cannot be regarded as full value of consideration received on transfer of shares. The Assessee thus claimed that its computation of LTCG was correct. The Assessee placed reliance on the decision of the ITAT Mumbai Bench in the case of Voltas Ltd. Vs. ACIT (2010) 4 ITR (Trib.)(Mumbai). In the aforesaid decision the facts were that Voltas Limited (VL) along with Voltas International Ltd. (VIL) had promoted a company named Premium Granite Ltd. (PGL). Investments were made by VL and VIL in the said company, PGL from time to time. They had also advanced loans to the said company, PGL on various occasions. Due to continued loss suffered by PGL, VL and VIL decided to sell all the shares of PGL for Re.1/- only to Zass Exports (Pvt.)Ltd. (ZES). It was further agreed that the purchaser would infuse loan into PGL which would be used to repay loan given by it to VL and VIL and one of the bankers, State Bank of India totalling to Rs.5,40,00,000. The AO treated the sale price at Rs.5,40,00,000 i.e., the consideration as well as the repayment of loan. The tribunal after discussing the issue in detail held that the amount of Rs.5.4 Crores infused by ZES in PGL to repay the loans cannot be added to the consideration and as such the loss claimed by VL was to be allowed.
5. The AO however did not agree with the aforesaid submissions of the Assessee and he held as follows:
"1.11 The reply by the assessee and the case law relied upon is considered. The submission of the assessee cannot be accepted as Clause No. 2.1 very clearly defines the sales consideration and leaves no ambiguity in the matter.ITA No.2796/Kol/2013-M/s. Khaitan Consultants Ltd. A.Y.2010-11 6
l.12 The reference to clause no. 2.2 and in particular to clause no. 2.2.3 is of no help to the assessee as the said clause states the manner of discharge of sale consideration one of them being through repayment of loan made by the seller to the company. On the contrary the said clause states that "... and such amount shall be treated as a loan repayment by the company". (emphasis added) The assessee claims states that it has received only Rs. 10,40,09,705.00 and not Rs. 15,37,35,633.00 from the purchaser of the shares. However, receiving payment in part or non receipt of payment of entire sale price cannot be factor of determining the sales price of the shares sold.
1.13 Although numerous opportunities were provided to the assessee, they failed to explain why the sale consideration as per clause no. 2.1, which specifically provides that "....for a lump sum consideration of Rs. 15,37,35,633.00 (Rupees Fifteen Crores thirty.seven lakhs thirty five thousand six hundred and thirty three only) hereinafter referred to as "sale consideration") ... " (emphasis added) . be not treated as the sale 'price of shares neither could they explain why the said clause should not be given effect to. The assessee in all hi responses remained silent on the said points. 1.14. The assessee has also relied on decision of the Hon'ble ITAT Voltas Ltd. Vs. Asst.Commissioner of Income Tax ( 2010) 4 ITR (Trib.) 721 (Mumbai). The facts of the case are totally distinct from the matter in hand. In Voltas Ltd. (Supra) the issue in hand dealt with the genuineness of investment in shares on rights basis and there was specific clause for repayment of loan due as part of one time settlement. There was pre-requisite to seek approval of financial institution for transfer of shares and for seeking such approval, loan repayment was made. Such loan amount was treated by the AO as sale consideration although there was no such clause in the agreement and the and the sale consideration was fixed at Rs. I/- although the purchase price was very high.
In the instant case it is specifically mentioned in the sale agreement that lump sum sale consideration of share is Rs.15,37,3S,633/-
1.15. In view of the above, the contention of the assessee is rejected and I recompute the capital gains with sale consideration at Rs. 15,37,3S,633.00. Hence an amount of R.4,97,2S,928/- is added back being difference of Rs.15,37,3S,633/- (-) Rs.10,40,09,705/-
6. On appeal by the Assessee, the CIT(A) agreed with the stand taken by the Assessee and held that the full value of consideration received on transfer should be adopted only at Rs.10,40,09,705. The following were the relevant observations of the CIT(A):
"2.4. I have heard the rival contentions, perused the material on record and duly considered factual matrix of the case and also applicable legal position. In the light of the aforesaid basic facts the issue is to be considered. The agreement provides for a total consideration which is a lump sum amount of Rs. 15,37,35,633/-. If out of such lump sum the amount of Rs. 4,97,25,928 is deducted, then the balance remains is Rs.10,40,09,705/-. The sum of Rs. 4,97,25,928 has not been received by the appellant directly from the Keel although the outstanding loan of the appellant to the said subsidiary stood squared off. The manner in which such loan stood discharged was by Keel crediting the said sum of Rs. 4,97,25,928 to the account of the buyer Gulabji Ratanji Khimji and debiting the same to the appellant's loan account in view of the ITA No.2796/Kol/2013-M/s. Khaitan Consultants Ltd. A.Y.2010-11 7 aforesaid payment made to the appellant by the buyer by the said draft for the said sum. For discharge of such loan no other payment and/or amount was received by the appellant or paid by Keel. Such discharge of the loan is recorded by Keel by crediting the loan amount to the account of the buyers namely Gulabji Ratanji Khimji. The said Mr Gulabji Ratanji Khimji became the creditor of Keel in place and in stead of the appellant.
2.5 Accordingly the consideration for sale of the said shares could not be anything over and above Rs. 10,40,09,705/- (Rs. 15,37,35,633 - Rs.15,97,25,928). There is no evidence of any manner whatsoever to indicate that anything over and above the said lump sum amount of Rs. 15,37,35,633 has been received by the appellant. KCCL has not paid any sum to the appellant save and except by crediting the account of the buyer Gulabji Ratanji Khimji and debiting the appellant's loan account. The use of the expression "lump sum" in clause 2.l.of the agreement clearly indicate that two separate items have been clubbed together. The expression "consideration" cannot be described for the shares only. When the entire shareholding of KCCL was being transferred by the appellant it also secured as a part of the term of the sale that the loan receivable by it from the said subsidiary KCCL is also repaid. Having parted with the entire shareholding of the subsidiary the appellant could not have left its loan outstanding. The transaction naturally required that not only the price of the shares should be paid but the loan receivable from the subsidiary should also be repaid.
2.6. Merely because the two transactions are rolled in one lump sum consideration in a transaction of outright transfer of an undertaking, no different adverse conclusion can be drawn as the AO has sought to do. It is well established that the agreement has to be read in its entirety and cannot be dissected and applied piece- meal. In this behalf reliance can be placed on the decision of the Hon'ble Supreme Court in the case of Commissioner of Income Tax vs. Hooghly Mills Co. Ltd. reported in 287 ITR 333 wherein at page 335 it was held as follows:-
"Thus in the same agreement of sale of the undertaking it was not only mentioned that the vendee will pay to the vendor the sum of Rs.2 crores as a consideration but in addition to this it will also take over the accrued and future gratuity liability of the employees. It is well-settled that an agreement has to be read as a whole. Hence the consideration for the sale was not only Rs.2 crores but in addition the gratuity liability of the vendor as well."
The Mumbai Tribunal decision in the case of Voltas (Supra) also supports the view taken above.
2.7 In the circumstances, the finding of the A.a. that the said sum of Rs. 15,37,35,633 represented the consideration only for the sale of shares of KCCL cannot be supported. If there would have been any evidence to show that either the said loan to KCCL of Rs. 4,97,25,928 remained outstanding and/or was discharged otherwise by any separate payment there could have been some basis for such a view. In the circumstances, the treatment of entire sum of Rs. 15,37,35,633 as the sale consideration for the shares cannot be sustained. From the said sum the amount towards payment of loan advanced to the subsidiary has to be excluded."
ITA No.2796/Kol/2013-M/s. Khaitan Consultants Ltd. A.Y.2010-11 87. Aggrieved by the order of the CIT(A), the Revenue has raised Gr.No.1 & 2 before the Tribunal. The learned DR submitted that the CIT(A) has wrongly relied on the decision of the Hon'ble Supreme Court in the case of Hooghly Mills Co. Ltd., (supra). According to him the facts of the case before the Hon'ble Supreme Court was that there was a take-over of business as a going concern by paying a consideration of Rs.2 Crores besides taking over accrued future gratuity liability payable to employees. Referring to the agreement entered into between the parties, the Supreme Court held that the agreement had to be read as a whole and, hence, the consideration for the sale was not only Rs. 2 crores but also included the gratuity liability of the vendor as well. It was his further submission that the CIT(A) wrongly placed reliance on the decision of the ITAT Mumbai in the case of Voltas Ltd. (supra). According to him in the aforesaid decision there was a specific clause in the agreement between parties whereby repayment of loan due was part of one time settlement. According to him in the case of the Assessee the Agreement specifically mentions sale consideration for sale of shares as Rs.15,37,35,633 and this fact has been overlooked by the CIT(A). The actual receipt of consideration by the Assessee, according to him is irrelevant. He therefore submitted that the AO's order has to be restored. The learned counsel for the Assessee reiterated submissions made before AO/CIT(A) and relied on the order of the CIT(A).
8. We have given a very careful consideration to the rival submissions. The facts of the present case as given in para-3 of this order are not disputed by the parties before us. Since the main challenge of the revenue in this appeal is that the ratio in the case of Hooghly mills case (supra) had been wrongly applied, it is necessary for us to see the facts of the case in Hooghly mills case (supra). The assessee in the case of Hooghly Mills Co. Ltd.(supra) had by an agreement with the vendor, purchased an Undertaking for Rs. 2 crores. In addition to the said amount the assessee also took up the accrued and future gratuity liability of the vendor which amounted to Rs. 3.5 crores. By the virtue of the said agreement, the amount was apportioned among the heads of three larger heads of land, buildings and plant and machinery. The assessee ITA No.2796/Kol/2013-M/s. Khaitan Consultants Ltd. A.Y.2010-11 9 claimed that since this amount of Rs. 3.5 crores towards gratuity was capital expenditure it was entitled to depreciation on the sum under section 32 of the Income- tax Act. The Commissioner of Appeal, Tribunal held that accrued gratuity was a part of consideration and allowed its distribution to the cost of acquisition for different assets and depreciation on reworked amount which was upheld by the High Court of Calcutta. On further appeal by the Revenue, the Hon'ble Supreme Court held that claim for depreciation was not to be allowed. Referring to the agreement entered into between the parties, the Supreme Court held that the agreement had to be read as a whole and, hence, the consideration for the sale was not only Rs. 2 crores but also included the gratuity liability of the vendor as well. However, on the issue of claims of depreciation, the Supreme Court ruled in favour of the revenue. Referring to the agreement of sale entered into between the parties, the Supreme Court observed that the agreement itself separately mentioned the price of the land, building and the machinery. The Hon'ble Supreme Court therefore rejected re-apportionment by the assessee in combination with accrued gratuity liability. The Supreme Court held that 'the gratuity liability does not fall under any of those categories specified in section 32, no depreciation can be claimed in respect of the gratuity liability even if it is regarded as capital expenditure. The ratio that flows from the decision of the Hon'ble Supreme Court, in our humble view, is that the apportionment of sale consideration as per the agreement between the parties will be of paramount importance to decide claims of parties under the Income Tax Act, 1961 (Act).
9. If that be the ratio then, in our view, a reading of clauses 2.1 & 2.2 of the Agreement dated 29.1.2010 between the parties, clearly shows that the liability of M/S.Khaitan & Co.Consulting Ltd., was not part of the consideration of sale of shares. It was an already existing liability in the books of the Assessee which was discharged by the Purchasers. The Purchasers took over that liability and M/S.Khaitan & Co.Consulting Ltd., acknowledged the Purchasers as their Creditor in so far as the sum of RS.4,97,25,928/- is concerned. On the facts of the present case, we are of the view that the sum of Rs.4,97,25,928 cannot be attributed to consideration for sale of ITA No.2796/Kol/2013-M/s. Khaitan Consultants Ltd. A.Y.2010-11 10 shares and the Assessee was justified in its claim that the said sum did not form part of the full value of consideration received on transfer of shares and its computation of LTCG was correct. We do not find any grounds to interfere with the decision of the CIT(A). Consequently, Gr.No.1 and 2 raised by the Revenue is dismissed.
10. Gr.No.3 raised by the Revenue reads as follows:
"3. The Ld. CIT (Appeal) is not justified in holding the brokerage as expenditure . of the company for sale of shares, ignoring the fact that the brokerage was actually raised for sale of premises which is in the name of subsidiary company. "
11. The facts in so far as Gr.No.3 raised by the Revenue is concerned are that the Assessee while computing LTCG on sale of shares of M/S.Khaitan & Co.Consulting Ltd., the Assessee had claimed as a deduction towards expenditure in connection with transfer a sum of Rs.12,13,300/- being brokerage paid to Mr.Manish B.Thakkar. On perusal of the bill dated 3.2.2010 raised by the broker based on which the Assessee made the aforesaid payment of commission, the AO noticed that the bill contained the following service rendered for which brokerage was paid by the Assessee:
" Being your premise at Meher Chambers.3rd & 5th Floor, R.KMarg, Bellard Estate, sold to our client Mr. Gulabsi Ratansi Khimji & Mrs. Devyani gulabsi Bhatia. Our remuneration charges are lump sum".
12. The AO was of the view that the brokerage in question was paid in connection with services rendered for sale of property and not for sale of shares. The Assessee submitted before AO the Brokerage Bill by mistake mentioned that it is for sale of premises but in fact it was with reference to the transaction of sale of shares by the Assessee.
13. The AO however refused to believe the plea of the Assessee that there was a mistake in the bill since payment of brokerage was made on the basis of the said bill. In case there was mistake which is easily identifiable it would have sought rectification thereof or obtain revised bill. Even during the course of hearing, the assessee did not produce revised/rectified bill although sufficient time and opportunity ITA No.2796/Kol/2013-M/s. Khaitan Consultants Ltd. A.Y.2010-11 11 was granted to the assessee. The claim that the mistake exists at the stage of assessment and that too when pointed out by the revenue is only an after- thought and no benefit could be granted to the assessee for the same. The AO therefore refused to allow the claim of the Assessee for deduction on account of Brokerage of Rs. 1213300/- while computing LTCG.
14. On appeal by the Assessee, the CIT(A) directed the AO to allow the deduction claimed by the Assessee, observing as follows:
"4. I have considered the submissions made and material on record. Brief facts of the issue are that KCCL owned office space situated at 3rd, 4th and 5th floors at Meher Chambers, Ballard State, Mumbai. The appellant was the holding company, holding the entire shares of KCCL. The fact that the transfer of the entire shareholding of KCCL led to the transfer of the office space at 3rd, 4th and 5th floors of Meher chambers cannot be disputed. The broker has also confirmed the receipt of brokerage for the services rendered for the said transaction. The A.O. has not disputed the factum of the payment and/or genuineness of the services being rendered by the broker. Consequently disallowance of the amount of brokerage of Rs.12,13,300/- cannot be sustained and has to be allowed in computing the capital gain."
15. Aggrieved by the order of the CIT(A) the revenue has raised Gr.No.3 before the Tribunal. We have heard the submissions of the learned DR who submitted that the bill showed payment for brokerage for sale of property and not for sale of shares and the capital gain in question is not arising on sale of property but on sale of property.
16. We have considered his submission and are of the view that the objection of the revenue is without any merit. As we have already seen the sale of the property was sought to be achieved by sale of shares of M/S.Khaitan & Co.Consulting Ltd., which was held by the Assessee to the extent of 99.97%. The bill issued by the broker contained a description that it was sale of the property. In our view this description in the bill issued by the broker to whom commission was paid is insignificant. The fact remains and it is not disputed that Mr.Manish B.Thakkar, acted as an intermediary in the transaction and was paid brokerage. Capital gain declared by the Assessee arises out of the same transaction. In such circumstances, the claim of the Assessee for deduction could not have been refused by the AO. The CIT(A) in our view has rightly ITA No.2796/Kol/2013-M/s. Khaitan Consultants Ltd. A.Y.2010-11 12 allowed the deduction claimed by the Assessee. We do not find any grounds to interfere with the order of the CIT(A). Consequently, Gr.No.3 raised by the revenue is also dismissed.
17. In the result, appeal by the Revenue is dismissed.
Order pronounced in the Court on 08.07.2016.
Sd/- Sd/-
[M.Balaganesh ] [ N.V.Vasudevan ]
Accountant Member Judicial Member
Dated : 08.07.2016.
[RG PS]
Copy of the order forwarded to:
1.M/s. Khaitan Consultants Ltd., 1B, 2nd Floor, Emerald House, Old Post Office Street, Kolkata-700001.
2. I.T.O., Ward-4(4), Kolkata.
3. CIT(A)-IV, Kolkata 4. CIT-II, Kolkata.
5. CIT(DR), Kolkata Benches, Kolkata.
True Copy By order, Asst. Registrar, ITAT, Kolkata Benches ITA No.2796/Kol/2013-M/s. Khaitan Consultants Ltd. A.Y.2010-11