9911796707
TMI Blog2007 (8) TMI 790X X X X Extracts X X X X X X X X Extracts X X X X ..... ellate authority to the effect that no gift tax is chargeable on the bonus shares and deleted the levy of gift tax assessed by the Assessing Officer on the assessee company for the years 1987-88, urging various legal grounds in support of the substantial questions of law with a request to answer the same in favour of revenue and allow the appeal by setting aside the order of the Tribunal impugned and also the order passed by the first appellate authority dated 4.2.1994 and confirm the assessment order of the ACT-I, Central-III. 2. This Court vide its order dated 5.11.2004 has framed the substantial questions of law as framed in the memorandum of appeal: 1. Whether the assessee has adopted a colourable devise of allotting one lakh equ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee company in favour of its seven investment companies. Without examining the transaction in a proper perspective would clearly show that the assessee had adopted a colourable device to avoid payment to Income Tax to the Revenue. 4. In support of his aforesaid legal submissions, he has placed strong reliance upon the decisions of the Supreme Court reported in 1969 ITR Vol. 73 Page 652 that bonus shares held as stock in trade are allotted under the provisions of the Act are held as rightly in the case of assessee, therefore, it is subject to tax. Further placed reliance upon another decision of Supreme Court reported on AIR 1974 SC 1728 in support of his legal submission that the requirement of form or made of transfer are really to ensur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the share allotment was done on 29.8.1986, the assessment order would amount to gift in terms of Sec.2(xii) of the Act is there is transfer of existing property under Sec.122 and 123 of Transfer of Property Act, again which has resulted in holding 24,00168 shares by investment companies for paltry investment of ₹ 10,00,070/- and they have become owner of 24,00,168 shares at a face value. Therefore, the assessing Officer has recorded a finding of fact on the basis of facts and legal evidence after affording opportunity to the assessee and held that the value of shares at face value of ₹ 10/-, according to yield basis is deducted after fixing ₹ 235/- per share was an element of gift in respect of the difference of ₹ 22 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch less substantial questions as framed in the appeal by the Revenue in this appeal do not arise for consideration of this Court. Therefore, he has requested to answer the same against it and prayed for dismissal of the Appeal. 7. In support of aforesaid submission, he has placed reliance upon the judgement of Supreme Court in 1964 Vol.(52) page 567 in the case of Income Tax Commissioner-vs-Dalmia Investment Company Ltd., and the Divisions Bench decision of Madras High Court reported in 1964 Vol.52 in the case of Commissioner of Income Tax-vs-Ramachandra Chettiar in support of contention that bonus shares received in lieu of dividends, which might otherwise have obtained and issuance of eight bonus shares of surplus available from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd., upon which the reliance is placed by the counsel for the Assessee does not support his case. On the other hand, it supports the case of the Revenue as per the majority view wherein the Apex Court has held that the Bonus shares issued and the ordinary shares held by the assessee who is a dealer in shares the real cost to the assessee cannot be taken as nil or they are based on the value by spreading the cost to the old shares and new share namely the bonus shares. 9. The aforesaid observation made by the Supreme Court certainly supports the findings and reasons in holding that assessee held real value of shares and fastening the liability in the assessment order as face value of the shares would certainly amount to deemed gift as p ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
