COMMISSIONER OF INCOME-TAX vs. GIRA SARABHAI TRUST NO 8

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ITR/405/1992HC GujaratGJHC24015745199230 July 1998Author: HONOURABLE MR. JUSTICE C.K.THAKKER,HONOURABLE MR. JUSTICE M.C.PATEL2 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Gujarat, per C.K. Thakker, J. and M.C. Patel, J., referred the question of law to its opinion. However, the Court noted that the matter was decided in favour of the assessee by the lower authorities, including the Income Tax Appellate Tribunal, and a concession was made before the Tribunal. The Court also referred to a previous case, CIT v. Leena Sarabhai (N.Ch.), 221 ITR 520, where a similar issue with peculiar facts and circumstances led to the question being left unanswered. In light of these circumstances, the present reference was also disposed of unanswered. No order as to costs was made. The specific finding on the taxability of capital gains under Section 45 read with Section 47(vii) was not adjudicated on merits.

What were the facts?

This case involves an Income Tax Reference filed by the Commissioner of Income-tax against Gira Sarabhai Trust No. 8. The assessment year(s) are not explicitly stated. The matter under challenge is a decision of the Income Tax Appellate Tribunal (ITAT). The procedural history indicates that the ITAT had decided the matter in favour of the assessee, influenced by earlier decisions and a concession made before the Tribunal. A similar matter, CIT v. Leena Sarabhai (N.Ch.), 221 ITR 520, had reached the High Court, where the question was left unanswered due to peculiar facts and circumstances. Consequently, this reference also stands disposed of unanswered.

What were the issues?

1. Whether, on the facts and circumstances of the case, the Tribunal was right in law in holding that the transfer of shares by the assessee to the Gira Sarabhai Trust No. 8 was not taxable as capital gains under Section 45 of the Income-tax Act, 1961, in view of the provisions of Section 47(vii) of the Income-tax Act, 1961? Assessee's contentions: The assessee likely argued that the transfer of shares was exempt from capital gains tax under Section 47(vii) of the Income-tax Act, 1961, as it involved a gift or transfer without consideration to a trust. The judgment notes a concession made before the Tribunal, implying the assessee's stance was accepted. Revenue's contentions: The revenue, represented by the Commissioner of Income-tax, challenged the Tribunal's decision. The specific arguments of the revenue are not detailed in the provided text, but it is implied they contested the applicability of Section 47(vii) or the nature of the transaction.

Which sections of the Income-tax Act were involved?

Section 45,Section 47(vii)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 405 of 1992

For Approval and Signature:

Hon'ble MR.JUSTICE C.K.THAKKER and MR.JUSTICE M.C.PATEL ============================================================ 1. Whether Reporters of Local Papers may be allowed to see the judgements?

2.

To be referred to the Reporter or not?

3.

Whether Their Lordships wish to see the fair copy of the judgement?

4.

Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder?

5.

Whether it is to be circulated to the Civil Judge?

-------------------------------------------------------------- COMMISSIONER OF INCOME-TAX Versus GIRA SARABHAI TRUST NO 8 -------------------------------------------------------------- Appearance: MR MANISH R BHATT for Petitioner MR RK PATEL and MR.B.D.KARIA for Respondent.

--------------------------------------------------------------

CORAM : MR.JUSTICE C.K.THAKKER and MR.JUSTICE M.C.PATEL Date of decision: 30/07/98

ORAL JUDGEMENT (Per C.K.Thakkar,J.):

The following question is referred for the opinion of this Court:-

"Whether, on the facts and circumstances of the case, the Tribunal was right in law in holding

tha u/s.47(vii) of the Income-tax Act, 1961"?

The matter was decided in favour of assessee in view of the earlier decision by the authorities, including the Income Tax Appellate Tribunal, and the concession made before the Tribunal. In fact, in COMMISSIONER OF INCOME-TAX v. LEENA SARABHAI (N.CH.), 221 ITR 520, when the matter reached this Court, in view of peculiar facts and circumstances, the question was left unanswered. In these circumstances, this reference also stands disposed of unanswered. In the facts and circumstances, no order as to costs.

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