COMMISSIONER OF INCOME-TAX vs. PALLAVI MAYOR (GM) TRUST NO 73

ITR/133/1994HC GujaratGJHC24020210199420 September 2005Author: HONOURABLE MR. JUSTICE D.A.MEHTA,HONOURABLE MS. JUSTICE HARSHA DEVANI3 pages
AI SummaryRemanded

What were the facts?

This case involves an Income Tax Reference No. 133 of 1994 before the High Court of Gujarat at Ahmedabad. The applicant is the Commissioner of Income-tax, and the respondent is Pallavi Mayor (GM) Trust No 73. The reference was made at the instance of the revenue by the Income-tax Appellate Tribunal under Section 256(1) of the Income-tax Act, 1961. The core of the dispute, as indicated by the question referred, pertains to whether a transfer occurred, leading to taxable capital gains. The parties have agreed that the reference should not be answered based on the specific facts and circumstances, particularly because the assessee is a shareholder in the same company as other shareholders in a related case where the revenue took a specific stand.

What did the High Court hold?

The High Court, upon hearing both the revenue and the assessee, noted that it was common ground between the parties that the reference ought not to be answered. This decision was influenced by the fact that the assessee is a shareholder of the same company as other shareholders in a related case. In that related case, the reference was left unanswered due to the stand taken by the revenue. Therefore, following its own decision in CIT Vs. Leena Sarabhai (N.CH), (1996) 221 ITR 520, the High Court left the present reference unanswered and disposed of it accordingly. No costs were ordered. The specific finding on whether a transfer occurred or if capital gains were taxable was not addressed on merits.

What were the issues?

1. Whether, as a matter of law and fact, the Appellate Tribunal was correct in holding that there was no transfer in the present case, and consequently, no taxable capital gains arose? (Section 45 of the Income-tax Act, 1961). The revenue contended that the Appellate Tribunal's finding of no transfer and no taxable capital gains was incorrect. The assessee, through its counsel, agreed with the revenue's position that the reference ought not to be answered, citing the commonality of facts and circumstances with other shareholders of the same company. The revenue's stance in the other shareholder cases, which led to those references being left unanswered, is the basis for this agreement.

Which sections of the Income-tax Act were involved?

Section 256(1),Section 45

AI-generated summary — verify with the full judgment below

ITR/133/1994 1/3 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No.133 of 1994 For Approval and Signature: HONOURABLE MR.JUSTICE D.A.MEHTA HONOURABLE MS.JUSTICE H.N.DEVANI ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= COMMISSIONER OF INCOME-TAX - Applicant(s) Versus PALLAVI MAYOR (GM) TRUST NO 73 - Respondent(s) ========================================================= Appearance : MR MANISH R BHATT for Applicant(s) : 1, MR RK PATEL for Respondent(s) : 1, ========================================================= CORAM : HONOURABLE MR.JUSTICE D.A.MEHTA and HONOURABLE MS.JUSTICE H.N.DEVANI Date : 20/09/2005 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE D.A.MEHTA)

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