C.I.T.ASR. vs. MASTER DEEPAN KAPOOR

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ITR/145/1996HC Punjab & HaryanaPHHC01034949199605 July 2010Bench: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE ADARSH KUMAR GOEL2 pages

AI SummaryDismissed

What did the High Court hold?

The High Court held that the question of law referred to it was covered by its earlier decision in The Commissioner of Income-tax, Amritsar v. Sh. Pyare Lal Kapur (supra). In that earlier decision, the Court had likely ruled on the taxability of consideration for transfer of controlling interest and directorship rights. Consequently, the High Court answered the referred question of law against the revenue and in favour of the assessee. The reference was disposed of in light of this finding. The specific reasoning of the earlier judgment is not detailed in this order, but it formed the basis for the present decision.

What were the facts?

The Income Tax Appellate Tribunal (ITAT) passed an order on December 14, 1995, in ITA Nos. 875 & 887/1990 for the assessment year 1983-84. The Commissioner of Income Tax, Amritsar (Revenue) challenged this order before the High Court of Punjab and Haryana. The dispute concerns the taxability of consideration received for the transfer of controlling interest and directorship rights in shares. The Revenue's appeals were dismissed by the ITAT.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Hon'ble Tribunal was justified in law in dismissing the appeals of the revenue by holding that the consideration received for transfer of controlling interest and directorship rights in shares were not taxable as the cost was nil and no capital gain was chargeable thereon? (Question of law) Contentions: Assessee: Not recorded. Revenue: The Revenue argued that the consideration received for the transfer of controlling interest and directorship rights in shares was taxable as capital gains, as there was a transfer of an asset and a resultant profit. Authorities/Precedents: The Revenue's counsel conceded that the matter was covered by an earlier order of the High Court dated September 15, 2008, in ITR Nos. 75 to 82 of 1992, titled The Commissioner of Income-tax, Amritsar v. Sh. Pyare Lal Kapur.

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.R. No.145 of 1996 (O&M) Date of decision: 5.7.2010 Commissioner of Income Tax, Amritsar. -----Applicant. Vs. Master Deepan Kapoor. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Ms. Naveender P.K. Singh, Sr. Standing Counsel for the applicant. --- ADARSH KUMAR GOEL, J.

Following question of law has been referred for opinion of this Court, arising out of order of the Income Tax Appellate Tribunal dated 14.12.1995 in I.T.A. No.875 & 887 (ASR)/1990 for the assessment year 1983-84:- “Whether on the facts and in the circumstances of the case, the Hon’ble Tribunal was justified in law in dismissing the appeals of the revenue by holding that the consideration received for transfer of controlling interest and directorship rights in shares were not taxable as the cost was nil and no capital gain was chargeable thereon?”

I.T.R. No.145 of1996

Learned counsel for the revenue fairly states that the matter is covered by earlier order of this Court dated 15.9.2008 in I.T.R. Nos.75 to 82 of 1992 The Commissioner of Income-tax, Amritsar v. Sh. Pyare Lal Kapur.

In view of above, the question referred is answered against the revenue and in favour of the assessee.

The reference is disposed of. (ADARSH KUMAR GOEL) JUDGE July 05, 2010 ( AJAY KUMAR MITTAL ) ashwani JUDGE 2

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