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TMI Blog1990 (1) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... 86.50. The WTO denied the aforesaid exemption to the assessee mainly on the following grounds: (i) She is a dealer in shares as is evident from her IT assessments. Such exemption is available only to an investor in shares and not to a dealer in shares. (ii) The WTO has the option to determine value of business assets either in accordance with s. 7(1) or to value the business assets as a whole, on the basis of global valuation as provided in s. 7(2) after making necessary adjustments as per r. 2A to 2G. When valuation of business asset is done on global valuation basis, the assessee will not be entitled to get exemption under s. 5(1)(xxa). Prescribed form of wealth-tax return also supports this view. (iii) In order to get exemption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of eligible shares owned by her in 14 companies out of 17 companies claimed by the assessee. With regard to shares in the three remaining companies, the learned CWT(A) restored the matter back to the WTO to look into the evidence produced by the assessee and to examine the assessee's claim for grant of exemption under s. 5(1)(xxa). 4. The Revenue is aggrieved by the aforesaid order of the CWT (A) and contends that the CWT(A) has erred in allowing exemption under s. 5(1)(xxa) to the assessee in respect of the shares worth Rs. 10,11,686. The learned Departmental Representative relied upon the detailed reasons given by the WTO in the assessment order and contended that the various conditions prescribed under s. 5(1)(xxa) are not ful ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion will be granted only if the assessee purchased such shares out of the initial issue directly from the company. He invited our attention towards s. 5(3) of the Act to further support his contention that it is not necessary for the assessee to directly purchase such shares from the company or that such shares should be for the first time registered in the name of the assessee and the assessee cannot purchase it from other persons. Sec. 5(3) provides that exemption in respect of eligible shares under s. 5(1) (xxa) will be allowed from the date on which such shares were first issued by the company or the assessee should own and hold the same atleast for a period of 6 months ending with the relevant valuation date. This itself proves that e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of eligible shares owned by an assessee in his capacity as a dealer. It is nowhere provided, that in order to avail the said exemption the investment should be made by the assessee in his capacity as an investor and not as a dealer. Exemption has been granted in respect of the initial issue of the shares issued by those companies which are engaged in manufacture of priority items in order to promote the growth of such industries. It does not discriminate between the assessee who owned such shares either as a dealer or as an investor. Such exemption has been granted in an unqualified and unconditional manner to all assessees provided the conditions mentioned in s. 5(1) (xxa) are fulfilled. The opening part of s. 5(1) clearly provides that su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such shares out of the initial issue directly from the company, a careful perusal of s. 5(1)(xxa) reveals that exemption in respect of such shares is dependent on the nature and qualifying conditions of the shares and it has not been prescribed in the aforesaid section that in order to avail the exemption under this section the eligible shares should be purchased by the assessee directly from the company. The exemption is attached to the qualifying initial issue of shares for a qualifying period of 5 years and is not subject to the condition that it should be directly purchased from the company or the assessee should be the first registered owner of such shares. A subsequent purchaser of the qualifying shares would also be entitled to get e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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