9911796707
TMI Blog1983 (5) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... peal relates to the assessment year 1976-77 for which the accounting year ended on 3-11-1975. The assessee derives income from property, share income from several firms besides own business and other sources. The ITO computed, inter alia, short-term capital gains of Rs. 6,408 on sale of 150 shares of Bank of Baroda. The assessee purchased 150 shares of Bank of Baroda on 17-1-1972 for Rs. 15,042.70. The Bank of Baroda was amalgamated with Mahindra Ugine Steel Co. Ltd. on 1-7-1974. The shareholder of Bank of Baroda was given an option either to accept the shares of the transferee-company or cash at the rate of 140 per share. The assessee exercised the option to receive cash and, accordingly, received Rs. 21,450 on 24-10-1975. This difference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this appeal by the revenue. In particular, he contended that the assessee having exercised his option to receive cash in lieu of right to receive the shares of the amalgamated company exemption under section 47(vii) of the Act was not applicable and, therefore, the assessee was liable to capital gains in view of the decisions of the Gujarat High Court in the case of CIT v. Vania Silk Mills (P.) Ltd. [1977] 107 ITR 300 and CIT v. Minor Bababhai alias Lavkumar Kantilal [1981] 128 ITR 1. 5. We have duly considered the facts and circumstances of the case. In this case, the assessee has exercised the option offered to him to receive cash at the rate of Rs. 140 per share in lieu of 150 shares held by him in Bank of Baroda which got amalgama ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransaction did not constitute either exchange or relinquishment of old shares and, therefore, no capital gains arose as a result of transaction. Obviously this decision is not applicable to the case of the assessee who has received cash in lieu of shares of the amalgamated company. In that case section 47(vii) constituted an exception in favour of the assessee. Thus both the case law relied upon by the AAC are not applicable to the case of the assessee at all. Therefore, the AAC misdirected himself by relying on the aforesaid decisions to hold that there was no transfer in terms of section 2(47), or in terms of Transfer of Property Act. Consequently, we hold that the order of the AAC is not justified in law and, therefore, we set aside his ..... X X X X Extracts X X X X X X X X Extracts X X X X
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