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TMI Blog2014 (10) TMI 253X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, any person in his place, would have got the differential price, by selling the shares - Irrespective of the willingness or otherwise of the person holding such a share, if the bar operates, it is difficult to imagine that the sale of the shares would take place or that it would yield the differential price – the Tribunal was rightly was of the view that as long as the bar operated, the question of any benefit in the form of differential price, accruing to the respondents, does not arise – Decided against revenue. Whether the benefit has accrued at all to the respondent – Held that:- There exists a distinction between the "accrual of income", on the one hand, and "arising of income", on the other - while accrual is almost notional in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount being ₹ 365 deserves to be treated as benefit , as defined under section 2(24)(vd) read with section 28(iv) of the Act. The Income-tax Officer passed separate orders dated March 27, 1998, levying tax on the differential amount, apart from dealing with other questions. The respondents filed appeals before the Appellate Commissioner. The appeals were dismissed through order, dated March 19, 1999. Thereupon, the respondents carried the matters in appeal, being I. T. A. Nos. 189 and 190 of 1999, before the Tribunal. Through the orders under appeals, the Tribunal accepted the contention of the respondents and allowed the appeals. The appeals were admitted on noting the existence of substantial questions of law. Sri J. V. Prasad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an be said to have accrued. He further submits that the Tribunal has analysed the matter with reference to the relevant provisions of law and has arrived at the correct conclusions. Learned senior counsel further submits that even if one ignores the volatility or fluctuating nature of the prices of shares, the bene- fit in the form of difference between the market price and the price at which the share was allotted can be said to have accrued, if only the share was capable of being sold. Expanding this, he submits that a clear and unequivocal prohibition against transfer of shares for a block period of three years was imposed by the allotting company and as long as that operated, the question of accrual of any benefit, in the form of differ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , arising from business or the exercise of a profession. The benefit, which is sought to be taxed, in the instant case, is the dif- ference between the market price, on the one hand, and the allotted price of a share, on the other. It has already been mentioned that, according to the Income-tax Officer, the market price was ₹ 455 per share, whereas it was allotted to the respondents at ₹ 90 per share, on preferential allot- ment. Even if all the subsidiary contentions advanced by the respondents in this behalf are rejected, the fact remains that there is a clear bar for a block period of three years prohibiting the sale of shares. It is axiomatic that the benefit can be said to have arisen to an individual, if only, any per- so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trate, that the income in the form of benefit has arisen to the respondents at all. The sole basis for levying income-tax on the amount was on the assumption that in case the shares are sold, they would have yielded the differential price and that, in turn, can be treated as income . Even if the exercise contemplated by the Income-tax Officer is taken as permissible in law, at the most, it amounts to accrual and not arising of income. Here again, the Tribunal has explained the subtle distinction between the two, in a perfect manner and arrived at the correct conclusion. We do not find any substantial question of law in the appeals and they are accordingly dismissed. There shall be no order as to costs. The miscellaneous petition f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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