1990 (1) TMI 97 - AT - Wealth-tax

Summary

Issues:
- Whether exemption under s. 5(1)(xxa) should be granted to the assessee in respect of shares worth Rs. 10,11,686.
- Whether the conditions prescribed under s. 5(1)(xxa) are fulfilled by the assessee for claiming exemption.
- Whether the assessee, being a dealer in shares, is entitled to claim exemption under s. 5(1)(xxa).
- Whether shares should be registered for the first time in the assessee's name to qualify for exemption under s. 5(1)(xxa).
- Whether the assessee should hold the shares for a minimum period of six months as required by s. 5(3)(a) of WT Act to be eligible for exemption.

Analysis:
The appeal involved a dispute over the grant of exemption under s. 5(1)(xxa) to the assessee for shares worth Rs. 10,11,686. The WTO initially denied the exemption, citing reasons such as the assessee being a dealer in shares and not fulfilling certain conditions under s. 5(1)(xxa). The CWT(A) overturned this decision, allowing the exemption for eligible shares owned by the assessee in various companies. The Revenue challenged this decision, arguing that the conditions under s. 5(1)(xxa) were not met. The assessee's counsel contended that the exemption is not restricted to non-dealers and highlighted that similar exemptions were granted in earlier years. The ITAT held that s. 5(1)(xxa) does not differentiate between dealers and investors for granting exemption, emphasizing that fulfillment of conditions is key.

The ITAT analyzed the provisions of s. 5(1)(xxa) and concluded that the exemption is available to both dealers and investors as long as the conditions specified are satisfied. The tribunal emphasized that the exemption is tied to the initial issue of shares by companies engaged in priority sectors and does not mandate direct purchase from the company. The ITAT further clarified that subsequent buyers of qualifying shares can also avail the exemption for the remaining qualifying period. Regarding the shares of three specific companies, the CWT(A) had referred the matter back to the WTO for further examination, which the ITAT deemed valid. Ultimately, the ITAT upheld the CWT(A)'s decision, dismissing the Revenue's appeal against granting the exemption to the assessee for eligible shares.