9911796707
TMI Blog2015 (8) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... WT) and in light of its analysis of the relevant provisions of the AoA of the DSE, the Court is of the view that the first question requires to be answered in favour of the Assessee. It is accordingly held that the ITAT was not justified in holding that membership of the DSE was an asset of the Assessee and transfer thereof was exigible to gift tax under the taxation under the Gift Tax Act, 1958. Membership of the stock exchange is in the nature of personal permission and is not a tangible asset. The second question is answered in the negative. It is accordingly held that the ITAT was not justified in adopting the composite value of the share as well as the ticket for the purpose of gift tax. This Court is not called upon to examine the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of DSE comprised both the share itself and the right to enter the trading ring as member of the DSE. Thus, he worked out the value of the gift at ₹ 40 lakhs. 4. The appeal of the Assessee was rejected by the Commissioner of Gift-Tax (Appeals) [ CGT (A) ] and the further appeal filed before the Special Bench, ITAT was disposed of by its order dated 8th November 1999 upholding the order of the CGT (A). Thereafter, a reference was sought and the above questions framed by the Special Bench, ITAT. 5. On the first question, learned counsel for the Assessee first referred to the Memorandum and Articles of Association ( AoA ) of the DSE to urge that membership of the DSE was independent and distinct from holding shares in it. He refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and describes further conditions to be satisfied before a share holder can become a member. These conditions are further enumerated in Article 25. The procedure with regard to enrolment, admission or election of new members of the stock exchange is set out in Article 26. Article 34 states that membership shall not be transferable except in accordance with the rules. Article 43 talks about the termination of the membership and sets out the instances resulting in the same. 7. In Vinay Bubna v. Stock Exchange, Mumbai (supra) the Supreme Court was considering the question whether under the Rules of the Bombay Stock Exchange the membership card could be said to be an asset of the shareholder. In answering that question, the Supreme Court ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n holding that membership of the DSE was an asset of the Assessee and transfer thereof was exigible to gift tax under the taxation under the Gift Tax Act, 1958. 10. In view of the answer to the first question, the second question is answered in the negative. It is accordingly held that the ITAT was not justified in adopting the composite value of the share as well as the ticket for the purpose of gift tax. 11. The CGT (A) had in his order dated 31st August 1985 held that as per the decision of the Supreme Court in Bharat Hari Singhani v. CWT 207 ITR 1, valuation of the share must mandatorily be as per Schedule III of the Wealth Tax Act. The CGT (A) proceeded on the basis that that the same value has to be taken for both wealth tax an ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
