1997 (11) TMI 54

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... of share capital in release of assets attract capital gains in the hands of the shareholders?" 2. The applicant before us is the CIT, Trivandrum and the respondent is the assessee. The assessee is an individual who surrendered 148 shares held by him in M/s Cavunal Rubber Estate (P) Ltd. and received land belonging to the company in lieu of such surrender worth Rs. 1,46,200. The AO took the vie .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... the Tribunal. 3. Learned senior standing counsel for the Department submitted that the question is now fully covered in favour of the Department in view of the decision of the Supreme Court in Kartikeya V. Sarabhai vs. CIT [1997] 142 CTR (SC) 150 : [1997] 228 ITR 163 (SC). The Supreme Court affirmed the decision of the Gujarat High Court in Kartikeya V. Sarabhai vs. CIT [1982] 28 CTR (Guj) 132 .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... Court is, therefore, bound to follow the decision of the Supreme Court. 4. Now let us see what the Supreme Court said in Kartikeya V. Sarabhai's case. "Sec. 2(47) which is an inclusion definition, inter alia, provides that relinquishment of an asset or extinguishment of any right therein amounts to a transfer of a capital asset. While it is no doubt true that the appellant continues to remai .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X