NAVROZE SHIAMAK MARSHALL (LEGAL HEIR OF LATE MRS. MAKI SHIAMAK MARSHALL),MUMBAI vs. INCOME TAX OFFICER 19(2)(2), MUMBAI

ITA 5092/MUM/2025Status: DisposedITAT Mumbai25 May 2026AY 2008-099 pages
AI SummaryAllowed

What were the facts?

The assessee declared income from sale of shares as Long-Term Capital Gain and claimed deduction under Section 54F. The Assessing Officer reopened the assessment, disallowed the deduction, and treated the gain as capital gain without indexation benefit. The assessee's children, who had similar transactions, were held by the Tribunal and High Court to have received dividend income under Section 2(22)(d), which was exempt under Section 10(34).

What did the Tribunal hold?

The Tribunal held that the income derived from the sale of shares, although in the nature of dividend under Section 2(22)(d) of the Act, is exempt under Section 10(34) of the Act. Therefore, the addition made by the Assessing Officer is to be deleted.

What were the issues?

Whether income from buyback of shares by a company is taxable as capital gains or deemed dividend, and if deemed dividend, whether it is exempt from tax under Section 10(34) even if the company has not paid dividend distribution tax.

Which sections of the Income-tax Act were involved?

Section 2(22)(d),Section 10(34),Section 54F,Section 115-O,Section 115-Q

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, MUMBAI

Before: SHRI SAKTIJIT DEY & SHRI PRABHASH SHANKAR

For Appellant: Shri J.D. Mistry, Sr. Advocate &, Shri Harsh Kothari
For Respondent: Shri Swapnil Choudhari, Sr. DR
Hearing: 28.04.2026Pronounced: 25.05.2026

Per Saktijit Dey, Vice President:

The present appeal has been filed by the assessee assailing the order dated 23.06.2025 passed by National Faceless Appeal Centre, (NFAC), Delhi for the Assessment Year (AY) 2008-09. 2. We have heard Shri JD Mistry, learned Senior Counsel appearing for the assessee and Shri Swapnil Choudhary, learned Departmental Representative (DR). This appeal has thrown up an interesting issue, as to whether, the income

2 Navroze Shiamak Marshall

derived by the assessee from sale of shares of a company, namely, M/s. Spirax Marshall Pvt. Ltd. can at all be

The order continues below.

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