COMMISSIONER OF INCOME TAX vs. ANAND SARABHAI (HK) TRUST N0. 40

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ITR/252/1995HC GujaratGJHC24022575199502 February 1998Author: HONOURABLE MR. JUSTICE R.K.ABICHANDANI,HONOURABLE MR. JUSTICE KUNDAN SINGH2 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Gujarat at Ahmedabad, in Income-Tax Reference No. 252 of 1995, decided not to answer the referred question. The Court stated that for reasons given in the context of an identical question referred to the same Court in I.T. Reference No. 221 of 1995, the said question is left unanswered. Consequently, the reference stands disposed of accordingly, with no order as to costs. The judgment does not provide the reasoning or the ratio decidendi from the earlier reference, nor does it elaborate on the specific findings of the Tribunal or the arguments presented by either party. The operative direction is to dispose of the reference without answering the question.

What were the facts?

The Income-Tax Appellate Tribunal, Ahmedabad, referred a question of law to the High Court of Gujarat at Ahmedabad concerning the taxability of shares, debentures, and bonds received by the assessee from amalgamated companies. The Commissioner of Income Tax is the petitioner, and Anand Sarabhai (HK) Trust No. 40 is the respondent. The assessment years are not specified. The core of the dispute revolves around whether the receipt of these securities constituted a 'transfer' under Section 2(47) of the Income-Tax Act, 1961, and consequently, whether capital gains tax was leviable. The High Court was asked to decide on the correctness of the Tribunal's finding.

What were the issues?

1. Whether the Appellate Tribunal is right in law and on facts in holding that when the assessee received shares, debentures, and bonds of amalgamated companies, there was no transfer under section 2(47) of the Income-tax Act and consequently no capital gains tax could be charged? Assessee's Contention: The judgment does not record any specific contentions made by the assessee. The Tribunal's finding, which is under challenge, implies that the assessee likely argued that the transaction did not amount to a transfer under Section 2(47) of the Income-tax Act, 1961, and therefore, no capital gains tax was applicable. Revenue's Contention: The judgment does not record any specific contentions made by the revenue. However, the fact that the Commissioner of Income Tax has referred the question to the High Court indicates that the revenue likely argued that the receipt of shares, debentures, and bonds from amalgamated companies did constitute a 'transfer' under Section 2(47) of the Income-tax Act, 1961, and thus, capital gains tax was exigible.

Which sections of the Income-tax Act were involved?

Section 2(47),Section 256(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 252 of 1995

For Approval and Signature:

Hon'ble MR.JUSTICE R.K.ABICHANDANI and MR.JUSTICE KUNDAN SINGH ============================================================ 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 ANAND SARABHAI (HK) TRUST N0. 40 -------------------------------------------------------------- Appearance:

------------------------------------------------------------ Mr. Pranav G Desai for MR MANISH R BHATT for Petitioner D.A.Mehta & R K Patel for respondent. --------------------------------------------------------------

CORAM : MR.JUSTICE R.K.ABICHANDANI and MR.JUSTICE KUNDAN SINGH Date of decision: 02/02/98

ORAL JUDGEMENT

The Income-Tax Appellate Tribunal, Ahmedabad has referred the following question, under the provisions of Section 256(1) of the Income Tax Act, 1961. "Whether the Appellate Tribunal is right in law and on facts in holding that when the assessee received shares, debentures and bonds of amalgamated companies, there was no transfer under section 2(47) of the Income-tax Act and consequently no capital gains tax could be charged ?"

2.

For the reasons given in context of an identical question referred to this Court in I.T. Reference No. 221 of 1995, the said question is left unanswered . The Reference stands disposed of accordingly with no order as to costs.

(R.K.Abichandani,J)

(Kundan Singh,J)

***darji

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