1997 (8) TMI 59 - HC - Income Tax

Summary

Issues involved: Application u/s 256(2) of the IT Act, 1961 by Revenue raising questions on jurisdiction of Tribunal and taxability of surplus from sale of shares.

Jurisdiction of Tribunal:
The respondent-assessee offered capital gains from sale of shares and securities for taxation, initially stating the cost as of 1st Jan., 1964, and later as the date of receipt from the Government of India. The CIT(A) upheld the assessment, leading to an appeal before the Tribunal where the assessee challenged the levy of capital gains on foreign shares. Despite objection by Revenue, the Tribunal allowed this new ground. The Tribunal ruled that no capital gain was chargeable as the shares belonged to the Government and were transferred to the assessee as a moral gesture, with zero cost of acquisition. The Tribunal's decision was based on precedents and rejected the Revenue's application for reference to the High Court.

Taxability of Surplus from Sale of Shares:
The Tribunal's decision was upheld by the High Court, stating that the questions raised by the Revenue had already been addressed in previous cases. The Court found that the Tribunal correctly applied the law and referred to relevant precedents in reaching its decision. As a result, the application u/s 256(2) of the IT Act, 1961 was rejected, concluding that no further questions of law needed to be answered by the Court.