Home ›

Search Results For: 45

This section is now closed. Click here for new judgements


Posted on by editor — No Comments ↓
COURT:
CORAM: ,
SECTION(S): , ,
GENRE:
CATCH WORDS: ,
COUNSEL:
DATE: December 16, 2020 (Date of pronouncement)
DATE: January 27, 2021 (Date of publication)
AY: 2015-16
FILE: Click here to view full post with file download link
CITATION:
S. 10(38) Bogus Capital Gains from Penny Stocks: The documents demonstrates that the assessee had purchased shares through Brokers for which the payment was made through banking channels. The assessee had sold shares through an authorized stock broker and payment was received through baking channels after deduction of STT. The AO has not doubted any of the documents. The only objection raised is that the script from which the assessee had earned Long Term Capital Gain has been held by the Investigation Wing of the Revenue to be a paper entity and that this scrip was being used for creating artificial capital gain. The objection is not acceptable (Udit Kalra (Delhi High Court) distinguished)

On going through the aforesaid judgment, we find that no question of law was formulated by Hon’ble High Court of Delhi in the said case and there is only dismissal of appeal in limine and the Hon’ble High Court found that the issue involved is a question of fact as held by Hon’ble Apex Court in Kunhayyammed vs State of Kerala reported in 245 ITR 360 and also in CIT vs. Rashtradoot (HUF) reported in 412 ITR 17. Even on merits and facts, the said judgment in the case of Udit Kalra vs ITO (supra) is distinguishable as in that case the scrips of the company were delisted on stock exchange, whereas, in the instant case, the interim order of SEBI in the cases of M/s Esteem Bio and M/s Turbotech have been cooled down by subsequent order of SEBI placed by assessees in its paper book. Thus, the case of Udit Kalra vs ITO relied by ld. DR is clearly distinguishable on facts and is not applicable to the facts of assessee. Thus, we hold that the case of assessee is factually and materially distinguishable from the facts of the case of Udit Kalra vs ITO so relied by ld DR

Read more ›

Posted on by editor — No Comments ↓
COURT:
CORAM: , ,
SECTION(S): , ,
GENRE:
CATCH WORDS: , ,
COUNSEL: ,
DATE: August 25, 2020 (Date of pronouncement)
DATE: August 26, 2020 (Date of publication)
AY: 1971-1972
FILE: Click here to view full post with file download link
CITATION:
S. 45 Capital Gains: In matters relating to compulsory acquisition of land under the Act of 1894, completion of transfer with vesting of land in the Government essentially correlates with taking over of possession of the land under acquisition by the Government. However, where possession is taken over before arriving of the relevant stage for such taking over, capital gains shall be deemed to have accrued upon arrival of the relevant stage and not before. To be more specific, in such cases, capital gains shall be deemed to have accrued: (a) upon making of the award, in the case of ordinary acquisition referable to Section 16; and (b) after expiration of fifteen days from the publication of the notice mentioned in Section 9 (1), in the case of urgency acquisition under Section 17 (All imp judgements referred)

For chargeability of income-tax, the income ought to have either arrived or accrued. In the matter of acquisition of land under the Act of 1894, taking over of possession before arrival of relevant stage for such taking over may give rise to a potential right in the owner of the property to make a claim for compensation but, looking to the scheme of enactment, it cannot be said that transfer resulting in capital gains is complete with taking over of possession, even if such taking over had happened earlier than the point of time of vesting contemplated in the relevant provisions.

Read more ›

Posted on by editor — No Comments ↓
COURT:
CORAM: ,
SECTION(S): , , ,
GENRE:
CATCH WORDS: , ,
COUNSEL: , ,
DATE: March 11, 2020 (Date of pronouncement)
DATE: July 13, 2020 (Date of publication)
AY: 2012-13
FILE: Click here to view full post with file download link
CITATION:
S. 147 Reopening for bogus capital gains from penny stocks: The Dept's argument that though the assessee disclosed details of the transactions pertaining to purchase and sale of shares, it did not disclose the real colour / true character of the transactions and, therefore, did not make a full and true disclosure of all material facts which was also overlooked by the AO, is not correct. The assessee disclosed the primary facts to the AO & also explained the queries put by the AO. It cannot be said that the assessee did not disclose fully and truly all material facts necessary for the assessment

In para 3.4 of the affidavit in reply it is stated that though the Petitioner had furnished details relating to purchase and sale of shares of Mittal Securities Ltd., (now Scan Steels Ltd.,), but that did not amount to full and true disclosure of all material facts unless true and real facts are disclosed before the Assessing Officer. Assessing Officer had not discussed in the assessment order about the genuineness or camouflage nature of the transactions of purchase and sale of shares of Mittal Securities Ltd. by the Petitioner

Read more ›

Posted on by editor — 4 Comments ↓
COURT:
CORAM: ,
SECTION(S): , , ,
GENRE:
CATCH WORDS: , ,
COUNSEL:
DATE: June 12, 2020 (Date of pronouncement)
DATE: June 22, 2020 (Date of publication)
AY: 1992-93, 1993-94, 1994-95, 1995-96
FILE: Click here to view full post with file download link
CITATION:
S. 45/ 147: Capital gains are chargeable to tax when individual flats are sold and not when the land is transferred to the co-operative society formed by the flat purchasers. The flat purchasers, by purchasing the flats, had certainly acquired a right or interest in the proportionate share of the land but its realisation is deferred till formation of the co-operative society by the owners of the flats and eventual transfer of the entire property to the co-operative society

According to the Assessing Officer, assessee had erred in offering to tax ‘capital gains’ in the year when the individual flats were sold whereas such ‘capital gains’ could be assessed to tax only when the land is trasferred to the co-operative society formed by the flat purchasers. If the assessee had offered to tax as ‘capital gains’ in the assessment years under consideration which should have been offered to tax in the subsequent years, it is beyond comprehension as to how a belief can be formed that income chargeable to tax for the assessment year under consideration had escaped assessment. That apart, the flat purchasers by purchasing the flats had certainly acquired a right or interest in the proportionate share of the land but its realisation is deferred till formation of the co-operative society by the owners of the flats and eventual transfer of the entire property to the co-operative society

Read more ›

Posted on by editor — 1 Comment ↓
COURT:
CORAM:
SECTION(S): , ,
GENRE:
CATCH WORDS: ,
COUNSEL:
DATE: February 14, 2020 (Date of pronouncement)
DATE: March 14, 2020 (Date of publication)
AY: 2015-16
FILE: Click here to view full post with file download link
CITATION:
S. 10(38) Bogus capital gains from penny stocks: As the detailed explanation of the assessee does not sufficiently discharge the onus on proving the source of impugned deposits, the impugned addition should be restricted to 30% only with a rider that same shall not be treated as a precedent in any other assessment year

It emerges that from a perusal of these case files that although the assessee has produced her documentary evidence before the lower authorities about the impugned sums to be in the nature of income derived from the sales of shares, the fact remains that her detailed explanation tendered in the course of assessment till date does not sufficiently discharg her onus on proving the source of impugned deposits

Read more ›

Posted on by editor — 2 Comments ↓
COURT:
CORAM: ,
SECTION(S): , ,
GENRE:
CATCH WORDS: , , ,
COUNSEL:
DATE: February 6, 2020 (Date of pronouncement)
DATE: February 22, 2020 (Date of publication)
AY: 2011-12
FILE: Click here to view full post with file download link
CITATION:
S. 2(47)/45: A reduction of capital results in an "extinguishment of rights" in the shares and constitutes a "transfer‟. The fact that the percentage of shareholding remains unchanged even after the reduction is irrelevant. The loss arising from the cancellation of shares is entitled to indexation and is allowable as a long-term capital loss (Bennett Coleman 133 ITD 1 (Mum)(SB) distinguished, all imp verdicts referred)

The ld DR vehemently argued that the percentage of shareholding remains the same because reduction of shares had happened for all shareholders. We find that the ld DR relied on para 24 of the judgement of Special Bench of Mumbai Tribunal in 133 ITD 1 supra to support his proposition. In this regard, we hold that the percentage of shareholding has got no bearing for chargeability of capital gains under the Act. We further find that the provisions of section 55(2)(v) of the Act were applied in the Mumbai Special Bench decision also in para 28 thereon. We find that in the case before us, the provisions of section 55(2)(v) of the Act will have no application at all and if the assessee is not given the benefit, it will never get it and none of the clauses of section 55(2)(v) of the Act would be applicable to the assessee in the instant case. Hence reliance placed on para 28 of the judgement of Special Bench of Mumbai Tribunal does not advance the case of the revenue

Read more ›

Posted on by editor — No Comments ↓
COURT:
CORAM: ,
SECTION(S): , ,
GENRE:
CATCH WORDS: , ,
COUNSEL:
DATE: November 18, 2019 (Date of pronouncement)
DATE: January 18, 2020 (Date of publication)
AY: 1999-00
FILE: Click here to view full post with file download link
CITATION:
Capital Gains from Family Arrangements: A family settlement which is a settlement amongst family members in the context of their 'preexisting right' is not a "transfer". Such a settlement only defines a preexisting joint interest as a separate interest. However, if there is no preexisting right, the family arrangement constitutes a "transfer". Merely because dispute involved some family members and such dispute is ultimately settled by filing consent terms, the same cannot be styled as a family arrangement or family settlement so as to hold that the consideration received as a result of such settlement, does not constitute capital gain (all imp verdicts referred)

The settlement between the Appellant and the said two persons can hardly be described as a family settlement. The settlement may be enforceable inter-parties now that the same is incorporated in the consent terms, based upon a consent decree may have been issued. However such settlement, cannot be called as a family settlement or family arrangement, as is understood in the case of Kale and others (supra) or in the case of Sachin Ambulkar (supra). Merely because dispute involved some family members and such dispute is ultimately settled by filing consent terms, the same cannot be styled as a family arrangement or family settlement and on such basis, it cannot be held that the consideration received as a result of such settlement, does not constitute capital gain.

Read more ›

Posted on by editor — No Comments ↓
COURT:
CORAM: ,
SECTION(S): , ,
GENRE:
CATCH WORDS:
COUNSEL:
DATE: November 21, 2019 (Date of pronouncement)
DATE: December 7, 2019 (Date of publication)
AY: -
FILE: Click here to view full post with file download link
CITATION:
S. 4/ 56: Amount received by assessee for relinquishing secretaryship of educational society cannot be treated as a capital receipt. The question of the principle of capital asset being invoked does not arise. The receipt is assessable as income from other sources. It may have been a different matter if it was a case of life time appointment of the assessee as Secretary of the concerned Institution but no such evidence was produced by the assessee (CIT vs. Ramachandra Rao 330 ITR 0322 affirmed)

The substance of the admission is that the appellant was holding the post of Secretary of the Institution [Paramahamsa Foundation (R) Trust] until 1996 but he left the institution after new members were elected as the managing committee. That being the case, the question of appellant invoking the principle of capital asset does not arise. It may have been a different matter if it was a case of life time appointment of the appellant as Secretary of the concerned Institution. No such evidence was produced by the appellant before the assessing officer or before us

Read more ›

Posted on by editor — No Comments ↓
COURT:
CORAM: , ,
SECTION(S): , ,
GENRE:
CATCH WORDS: , , , , ,
COUNSEL: , ,
DATE: September 5, 2019 (Date of pronouncement)
DATE: October 5, 2019 (Date of publication)
AY: 2010-11
FILE: Click here to view full post with file download link
CITATION:
S. 48 Capital Gains: The payment towards discharge of outstanding loan liability out of the sale proceeds of mortgaged property is a mere application of income and not a diversion of sale proceeds by overriding title. The assessee cannot claim such application as deduction for the purpose of computing Capital Gain in terms of s. 48 of the Act. The legal position prevailing prior to SARFAESI Act is also germane even after the enactment of SARFAESI Act

I thus agree with the view taken by the learned Judicial Member that the consideration from sale of property to the extent of principal component of loan adjusted by the bank cannot be treated as ‘diversion of income by overriding title’ and was thus not deductible from the total consideration accrued to the assessee from sale of property. In my considered opinion, so far as the instant dispute is concerned, the legal position prevailing prior to SARFAESI Act is also germane even after the enactment of SARFAESI Act

Read more ›

Posted on by editor — No Comments ↓
COURT:
CORAM: ,
SECTION(S): , ,
GENRE:
CATCH WORDS: ,
COUNSEL: ,
DATE: May 29, 2019 (Date of pronouncement)
DATE: July 6, 2019 (Date of publication)
AY: 2012-13
FILE: Click here to view full post with file download link
CITATION:
Capital vs. Revenue Receipt: Damages received for breach of development agreement are capital in nature & not chargeable to tax. The only right that accrues to the assessee who complains of breach is right to file a suit for recovery of damages from the defaulting party. A breach of contract does not give rise to any debt. A right to recover damages is not assignable because it is not a chose-in-action. Such a mere 'right to sue' is neither a capital asset u/s 2(14) nor is it capable of being transferred & is therefore not chargeable under u/s 45 of the Act (All imp judgements referred)

Despite the definition of the expression capital asset in the widest possible terms in section 2(14), a right to a capital asset must fall within the expression ‘property of any kind’ and must not fall within the exceptions. Section 6 of the Transfer of Property Act which uses the expression ‘property of any kind’ in the context of transferability makes an exception in the case of mere right to sue. The decisions there under make it abundantly clear that the right to sue for damages is not an actionable claim. It cannot be assigned and its transfer is opposed to public policy. As such it will not be quite correct to say that such a right constituted capital asset which in turn has to be an interest in ‘property of any kind.’

Read more ›