August 2022
(A) Capital gains — Full value of consideration — Deductions — Consideration on sale of shares including sum held in escrow account offered to tax — Assessee receiving reduced sum from escrow account after completion of assessment — Whole amount credited in book not taxable as capital gains — Only actual amount received taxable — Assessee entitled to refund of excess tax paid
(B) Revision — Powers of Commissioner — Application by assessee for revision of order — Power of Principal Commissioner not restricted to allowing relief only up to returned income — Recomputation of income can be directed irrespective of whether recomputation results in income less than returned income — S. 240 not applicable to assessee
By K. B. Bhujle, Advocate
Reading Time 6 mins
30 Dinesh Vazirani vs. Principal CIT
[2022] 445 ITR 110 (Bom.)
A.Y.: 2011-12
Date of order: 8th April, 2022
Ss. 45, 48, 240 and 264 of ITA, 1961
(A) Capital gains — Full value of consideration — Deductions — Consideration on sale of shares including sum held in escrow account offered to tax — Assessee receiving reduced sum from escrow account after completion of assessment — Whole amount credited in book not taxable as capital gains — Only actual amount received taxable — Assessee entitled to refund of excess tax paid
(B) Revision — Powers of Commissioner — Application by assessee for revision of order — Power of Principal Commissioner not restricted to allowing relief only up to returned income — Recomputation of income can be directed irrespective of whether recomputation results in income less than returned income — S. 240 not applicable to assesseeFor the A.Y. 2011-12, the assessee computed the capital gains on the sale of shares considering the proportion of the total consideration, which included the escrow amount which had not been received by the time returns were filed but were received by the promoters but were still parked in the escrow account. The income declared by the assessee was accepted in the scrutiny assessment. The assessee stated that subsequent to the sale of the shares, certain statutory and other liabilities arose for the period prior to the sale of the shares, and
