COMMISSIONER OF INCOME TAX vs. ANARKALI SARABHAI TRUST NO.10

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ITR/232/1995HC GujaratGJHC24022555199502 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, while considering the reference, noted that an identical question had been referred to the same Court in Income Tax Reference No. 221 of 1995. For the reasons given in that earlier case, the High Court decided to leave the question unanswered in the present reference. Consequently, the reference was disposed of without providing a definitive ruling on the merits of the ITAT's decision. No order as to costs was made. The operative direction is that the reference stands disposed of, leaving the ITAT's finding on the issue of 'transfer' and capital gains tax undisturbed by the High Court's decision in this specific reference.

What were the facts?

The Commissioner of Income Tax (Revenue) referred a question of law to the High Court of Gujarat at Ahmedabad concerning an assessment year not specified in the judgment. The assessee, Anarkali Sarabhai Trust, received shares, debentures, and bonds of amalgamated companies. The Income Tax Appellate Tribunal (ITAT) had held that this receipt did not constitute a 'transfer' under Section 2(47) of the Income Tax Act, 1961, and therefore, no capital gains tax was chargeable. The Revenue challenged this decision of the ITAT.

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 contentions: The judgment does not record any specific contentions made by the assessee before the High Court. However, the ITAT's decision, which the assessee would have supported, was that the receipt of shares, debentures, and bonds of amalgamated companies did not amount to a 'transfer' under Section 2(47) of the Income Tax Act, 1961, thus precluding capital gains tax. Revenue's contentions: The judgment does not record any specific contentions made by the Revenue before the High Court. However, the Revenue's reference to the High Court indicates their disagreement with the ITAT's finding that no transfer occurred and that capital gains tax was not leviable.

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 232 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 ANARKALI SARABHAI TRUST NO.10 -------------------------------------------------------------- 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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