9911796707
TMI Blog1979 (10) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... lth-tax Act, 1957 ? 2. Whether, on the facts and circumstances of the case, the Appellate Tribunal was justified in holding that the value of the bonus shares issued to the minor daughter of the assessee should be excluded in computing the net wealth of the assessee ? " The assessee gifted to her minor daughter 10,000 shares in M/s. Rajendra Mills Ltd. on September 22, 1960. During the course of the year ending March 31, 1969, M/s. Rajendra Mills Ltd. issued bonus shares as result of which the minor daughter came to own another 10,000 shares. The value of the entire 20,000 shares was included in the total wealth of the assessee by invoking s. 4(1)(a)(ii) of the W.T. Act. The AAC, on appeal, following the judgment of the Bombay High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se shares in the hands of the assessee. The question before us relates to the bonus shares issued during the year ended March 31, 1969. The language of the, provision is not at all satisfied in the present case with reference to the bonus shares. Though the original shareholding is the basis or gives a right to the shareholder to get the bonus shares, still what is received by the shareholder as bonus share is not by transfer from the original transferor of the gifted shares but by allotment by the company itself. As a result of the shareholding in the company, the minor child had acquired a right to the allotment of further shares in accordance with the resolution of the company. The very concept of transfer implies that the transferor was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nus shares in the hands of the minor child is income which arose indirectly from assets transferred by the assessee and is liable to be included in computing the total income of the assessee for the purpose of assessment. But, in our judgment, the source of the dividend income from the bonus shares is not the assets transferred but the accretion thereto; and that income cannot be regarded as arising even indirectly from the assets transferred by the assessee. The Legislature has not by enacting section 16(3)(a)(iv) sought to tax in the hands of the assessee income arising from accretions to the assets transferred by him to his minor children." Modifying the observations to suit wealth-tax, it can be stated that the Legislature has not, by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old partnership. It was conceded by the assessee that there was a transfer of Rs. 97,329 by him to his son and that the interest paid to his son by the new firm on the amount so transferred could be included in the income of the assessee under s. 16(3)(a)(iv) of the Indian I.T. Act, 1922. But, he contended that the share income of the son in the new firm could not be so included as the share was not an asset transferred by the assessee to his minor child. It was held that the share interest in the new firm was an asset which was transferred by the assessee to his minor son though the transfer was effected by indirect means. The wording of s. 16(3)(a)(iv) was found to be wide enough to cover the operations of this kind. During the course o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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