COMMISSIONER OF INCOME TAX vs. GEETA MAYOR

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ITR/95/1993HC GujaratGJHC24021196199330 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 disposed of the reference unanswered. The Court noted that the matter was decided in favour of the assessee by the authorities, including the Income Tax Appellate Tribunal, and also due to a concession made before the Tribunal. The Court referenced its own earlier decision in CIT v. Leena Sarabhai (N. Ch.), 221 ITR 520, where, in view of peculiar facts and circumstances, the question was left unanswered. Consequently, in the facts and circumstances of the present case, the reference was also disposed of unanswered. No order as to costs was made. The operative direction was to leave the question unanswered.

What were the facts?

This case involves an Income Tax Reference No. 95 of 1993 before the High Court of Gujarat at Ahmedabad. The reference was made by the Commissioner of Income Tax against the assessee, Geeta Mayor. The core of the dispute concerns whether the receipt of shares and bonds in an amalgamated company, in lieu of shares held in an amalgamating company, constitutes a 'transfer' for the purpose of capital gains tax. The Income Tax Appellate Tribunal had previously decided in favour of the assessee. The High Court noted that a similar matter, CIT v. Leena Sarabhai (N. Ch.), 221 ITR 520, had reached the High Court but the question was left unanswered due to peculiar facts and circumstances. The present reference also stands disposed of unanswered.

What were the issues?

1. Whether, as a matter of law and fact, the Appellate Tribunal was correct in holding that when the assessee received shares and bonds in the amalgamated company in lieu of its shares in the amalgamating company, there was no transfer, and hence capital gains could not be taxed? The assessee contended that the receipt of shares and bonds in the amalgamated company in exchange for shares in the amalgamating company did not constitute a 'transfer' under the Income Tax Act, 1961, and therefore, no capital gains tax was leviable. The revenue's contention is not explicitly recorded in the judgment, but the reference itself implies a disagreement with the Tribunal's finding that no transfer occurred. The Tribunal had ruled in favour of the assessee. The High Court referred to a previous case, CIT v. Leena Sarabhai (N. Ch.), 221 ITR 520, where a similar issue was left unanswered.

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 95 of 1993

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 GEETA MAYOR -------------------------------------------------------------- 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

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

"Whether, the Appellate Tribunal is right on law and on facts is holding that when the assessee

received shares and bonds in the amalgamated company in lieu of its shares in the amalgamating company, there was no transfer and hence capital gains could be taxed?" 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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