PDGIT v. Indian Plywood Mfg. Co. (P.) Ltd [2023] 153 taxmann.com 416 / [2023] 240 COMP CASE 282 ( Delhi )( HC) Editorial : SLP is granted against the order of High Court , Indian Plywood Mfg. Co. (P.) Ltd. v. PDGIT (2024) 296 Taxman 576 (SC)

S. 48 : Capital gains –Mode of Computation – Sale of shares gifted by promoters – BIFR cannot sanction any modification to scheme directing the Income tax department to give further tax concession without department being consenting to grant additional concession .[ S. 45 , Sick Industrial Companies ( Special Provisions ) Act , 1985 , 3(1)(o) , 17 , 18 , 22A, Art. 226 ]

BIFR declared respondent-company as a sick industrial company within meaning of section 3(1)(o) and appointed Central Bank of India as operating agency to prepare a rehabilitation package for company . Draft rehabilitation scheme was approved by BIFR . Said scheme had set out reliefs and concessions to be provided by income-tax department (ITD) . Respondent sought an additional relief from ITD in respect of sale of shares, which were gifted by promoters of company as a part of their promoters’ contribution, which had resulted in capital gains, chargeable to income tax . Said request was opposed by ITD on ground that it had granted all reliefs and concession as envisaged in scheme .  BIFR by order modified said scheme, requiring ITD to consider grant further additional concession . On Writ by the ITD  It was contended  that obligation to extend further concessions could not be imposed on Central Government (ITD) without its consent . Court held that in instant case, ITD had not consented for extending any further concession and, therefore, order requiring ITD to consider grant of further concessions, could not be interpreted as making it obligatory on ITD to grant such concessions . Further, BIFR’s order did not indicate that it had examined transactions, which had led to capital gains arising in hands of company or context in which additional concessions were sought . The order is set aside  .ITD was not required to grant any further concession contrary to IT Act, to company .