IN THE JAMMU & KASHMIR AND LADAKH HIGH COURT

TASHI RABSTAN, & PUNEET GUPTA, JJ.

Pr. CIT v. Karan Singh

ITA No. 1 / 2022

2 March, 2024

Petitioner/Appellant by: Suraj Singh Wazir, Advocate & Pariksha Parmar, Advocate

Respondent by: C.S. Aggarwal, Sr. Advocate, Subash Dutt, Advocate & Sachin Sharma, Advocate

Tashi Rabstan, J.

1. The facts-in-brief, as gathered from the file, are that the assessee, namely, Dr. Karan Singh, his wife and two sons were having shares in M/s. Jyoti (P) Ltd. Thus, the assessee was one of the shareholders having 21000 shares in the said company. During the financial year of 1997-98, the assessee had transferred/sold 7150 shares in the said company to M/s. Bharat Hotels Ltd., New Delhi for a consideration of rupees ten crores, though, as on 1-4-1981, the assessee had taken the indexed cost of these shares at Rs. 14,48,59,000. However, in the return filed by the assessee on 8-3-1999, the assessee had declared a total income of Rs. 16,89,477, i.e., Rs. 12,000 under the head salary and Rs. 16,77,477 as income from other sources. There was a note appended to the computation of income to the effect that the assessee had sold his shares in M/s. Jyoti (P) Ltd., and, as per valuation of the companys assets, there was a capital loss, which is not being claimed.

2. However, the assessing officer disputed the indexed cost of 7150 shares. He was of the view that while calculating the cost of acquisition, the value of land measuring 225.85 kanals was to be excluded as the land was not a part of sale consideration of shares of M/s. Jyoti (P) Ltd. to M/s. Bharat Hotels Ltd. Therefore, the assessing officer took the indexed cost of per share at Rs. 3262. Thus, the assessing officer adopted the indexed cost of 7150 shares at Rs. 2,33,23,300, instead of Rs. 14,48,59,000. As such, the assessing officer was of the view that out of rupees ten crore being the sale price, there was a capital gain of Rs. 7,66,76,700 as having been received by the assessee.