IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “B”BENCH: NEW DELHI BEFORE SHRI YOGESH KUMAR U.S, JUDICIAL MEMBER &

SHRI MANISH AGARWAL, ACCOUNTANT MEMBER [Assessment Year :2008]

The present appeal is filed by the Revenue against the order dated 01.06.2023 by Ld. Commissioner of Income Tax (A), National Faceless Appeal Centre (“NFAC”), Delhi [“Ld.CIT(A)”] in Appeal No. CIT(A), Delhi-18/10248/2014-15 passed u/s 250 of the Income Tax Act, 1961 [“the Act”] arising from the assessment order dated NIL passed u/s 143(3) of the Act pertaining to Assessment Year 2008.

2. Brief facts of the case are that assessee derived income from salary as Director in various companies and having income under the Income from business from his own business and filed the return of income declaring total income at INR 43,58,060/- on 31.07.2008. The case of assessee was selected for scrutiny and notice u/s 143(2) was issued on 25.09.2009 followed by questionnaire and notice u/s 142(1) of the Act issued from time to time. In response assessee furnished requisite details. During the year, the assessee had claimed Long Term Capital Loss (“LTCL”) of INR 47,66,327/- after claiming exemption u/s 54 of INR 15,83,05,926/- out of sale consideration of INR 15,35,39,599/-. The AO assessed the income of the assessee at INR15,78,81,266/-

in the order passed u/s 143(3) of the Act.

3. Against the said order, assessee filed an appeal before Ld. CIT(A) who vide order dated 01.06.2023, partly allowed the appeal of the assessee.

4. Aggrieved by the order of Ld.CIT(A), Revenue is in appeal before the Tribunal by taking following grounds of appeal:-

1. “Whether on the facts and circumstances of the case and in law the Ld.CIT(A) has erred in deleting the addition of Rs.15,35,23,209/- on account of business income from sale of shares of Quasar Media.

2. Whether on the facts and circumstances of the case and in law the Ld.CIT(A) has erred in considering the loss under head capital gains amounting to Rs.5,51,21,117/- claimed by the assessee.”

5. Before us, in support of the grounds of appeal, Ld. CIT DR for the Revenue submits that assessee has sold shares in terms of share purchase agreement as per which assessee has transferred his rights attached to shares which include all the interests in the business of the company and it cannot be said that it is a simple transfer of shares but it is transfer of business of the assessee wherein the ownership of the assessee is transferred which was held in the shape of share capital and therefore, she prayed for the confirmation of the order of the AO who has rightly treated the sale as business income.

6. On the other hand, ld. AR for the assessee submits that assessee was allotted shares of Quasar Media Pvt. Ltd. on 07.04.2005 at the time of its incorporation as founder-promoter. Out of these shares, 3199 shares were sold by the assessee during the year under appeal for a sum of INR 15,35,23,209/- and claimed deduction u/s 54 of the Act for acquiring residential house. As per Ld.AR, shares were not listed in stock exchange and thus, the same were sold through Shareholders Agreement (“SHA”) according to which the assessee has transferred the shares alongwith all the rights and interests in the company therefore, AO opined that assessee not only sold the shares but also transferred the interest in the business i.e. sale of business assets. Accordingly, the income of the assessee from such sales was treated as business income which is contrary to the fact that the shares were hold by the assessee as investment and were ultimately sold at a profit. Ld.AR submits that the assessee was promoter of the company and purchased the shares and when the shares were