Shri Irfan Abdul Kader Fazlani vs ACIT I.T.A. NO.8831/M/2011 (Mum ITAT) Background: Assessee is a shareholder in M/s. Kamala Mansion Pvt. Ltd (KMPL). Along with other shareholders of this company, the assessee sold his shares for a consideration of Rs. 37.51 lakhs and capital gains were offered on that basis. KMPL owns two flats in a building known as Om Vikas Apartments situated at Walkeshwar Road, Mumbai and the said flats are regularly given on rent and the rent is declared by KMPL as ‘income from the house property’. Assessee sold his 306 shares for a sum of Rs. 37,51,369/ and earned long term capital gains. AO held that by engineering the sale of the shares of all other shareholders of M/s. KMPL, the assessee effectively transferred the immovable property belonging to the assessee, therefore, it is an indirect way of transferring the immovable properties for lesser consideration and, therefore, the provisions of section 50C of the Act have application to the facts of the case and consequently, AO applied the guideline prices of the flats and worked out the capital gains. Further, AO treated this case as an eligible case for piercing of corporate veil. He accordingly ‘pierced the corporate veil, invoked s. 50C and computed the capital gains by adopting the stamp duty value of the flats.