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Issues involved:
The judgment involves the question of whether the Tribunal was justified in upholding the order of the Commissioner of Income-tax (Appeals) in deleting the addition of Rs. 7,57,076 made by the Assessing Officer on account of transfer of shares at rates lower than the quoted market rates. Summary: Issue 1: Transfer of Shares and Income Assessment The assessment involved a resident individual for the year 1984-85 who transferred shares to another company at a value lower than the market rate. The Assessing Officer added the difference as income, but the Commissioner of Income-tax (Appeals) reversed this decision, stating no grounds for changing the disclosed value. The Tribunal also upheld this decision, emphasizing the genuine nature of the transaction and the absence of evidence of fraudulent intent. Key Details: - The assessee transferred shares to a company at a lower book value than the market rate. - The Assessing Officer added the price difference as income. - The Commissioner of Income-tax (Appeals) reversed this decision, finding no reason to alter the disclosed value. - The Tribunal agreed with the Commissioner's decision, highlighting the genuine nature of the transaction and lack of fraudulent intent. - Citing previous judgments, including one by the Supreme Court, the court affirmed that selling shares below market value does not automatically imply concealment or fraud. - The court ruled in favor of the assessee, stating that no income was derived from the share transfer due to the lower selling price compared to market value. This judgment emphasizes the importance of assessing transactions based on evidence of fraudulent intent rather than solely on differences in transaction values.
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