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TMI Blog2008 (1) TMI 581X X X X Extracts X X X X X X X X Extracts X X X X ..... market value of the shares allotted to the assessee, treated the difference amount of Rs. 15 per share as an escaped income. The Commissioner (Appeal) dismissed the appeal. The Tribunal held that the shares were allotted to the assessee as a promoter of the company and pursuant to an agreement, and set aside the order of the Commissioner (Appeals). Held that- the assessee was the employee of M. Though the Tribunal had given a finding that the shares had been allotted to the assessee by virtue of an agreement in favour of the assessee as a promoter of the company, he could not be considered as promoter of M. The assessee being an employee of the company having got shares at the rate of Rs. 10 each, had been benefited out of such allotment w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company with M/s. Technology Development and Information Company of India Ltd., had allotted 50,000 equity shares of Rs. 10 each, therefore he contended he has not acquired any benefit or amenity as required under section 17(2)(iii) of the Act and requested the Assessing Officer to pass an appropriate order. The Assessing Officer rejected the contention of the assessee on the ground that in the same year pursuant to the agreement referred to by the assessee M/s. Manikya Plastichem Pvt. Ltd., has sold 4 lakh equity shares at the rate of Rs. 25 per share and the difference of Rs.15 per share has to be treated as a benefit derived by the assessee by virtue of his employment in M/s. Manikya Plastichem Pvt. Ltd., Accordingly, the order of asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment of M/s. Manikya Plastichem Pvt. Ltd. it was detected that equity shares worth Rs. 25 had been sold in favour of the assessee at Rs. 10 and the difference had escaped assessment which was liable to be taxed in accordance with the amended section 147 of the Act? 2. Whether the Tribunal was correct in holding that the transfer of shares by M/s. Manikya Plastichem Pvt. Ltd., the employer in favour of the assessee at a lower rate than that of the market value would not amount to perquisite as the assessee did not acquire any vested right as enunciated by the apex court in CIT v. L. W. Russel [1964] 53 ITR 91. 3. Whether the Assessing Officer was correct in bringing to tax the difference in acquiring shares at Rs. 10 when compared t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the benefit and to avoid tax. According to him, agreement dated November 9, 1995, cannot be considered in view of the specific provision under section 17(2)(iii) of the Act and the circular issued by the Department in regard to the allotment of shares by a company to its employees. 11. Though the Tribunal has given a finding that shares have been allotted to the assessee by virtue of the agreement dated November 9, 1995, in favour of the assessee as a promoter of the company, on facts he cannot be considered as a promoter of M/s. Manikya Plastichem Pvt. Ltd. Though the counsel for the assessee has relied upon the word "promoters and associates", we are afraid to accept the argument advanced by the counsel for the assessee since the word ..... X X X X Extracts X X X X X X X X Extracts X X X X
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