TaxTMI 
TaxTMI 
2013 (8) TMI 244
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....08 relinquished 3,75,815 right Partially Convertible Debenture, in short, PCD of EID Parry India Limited at Rs.5/- for a consideration of Rs.18,79,475/-, where the market value at the time of relinquishment was Rs.21.50 per share. The Assessing Authority treated the difference at Rs.16.50 per share as deemed gift, since transfer also included relinquishment. Thus a sum of Rs.62,02,268/- was sought to be assessed under the head 'deemed gift'. Notice under Section 16 of the Gift Tax Act, 1958 was accordingly issued to the assessee. Since the assessee did not file the return within the due date, notice under Section 15(4) was issued. The assessee filed its reply countering the stand of the Revenue. The said contention was, however, rejected by....
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....nform you, from the present trends in the market it will be extremely difficult to locate buyers for the rights, particularly so for such a big lot. Many shareholders have been opting for sale of the rights in view of sagging investment climate at the moment and disinclination to put more money in the same company. Neverthless, we will try our best and keep you advised by the 19th instant. As long as the traded volumes are low, say 1000 to 2000 Rights, we can get a reasonable price. If the volume of sale is high this will bring down the price substantially. Therefore, we prefer to sell it cautiously and would let you know the postiion before 18th Aug.1993" 3. The Tribunal pointed out that except this letter, there was no material avai....
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....etermining the value of share transfer. When the assessee had failed to discharge the burden as to the charging of the price at Rs.5/-, the only other option open herein was to adopt the procedure under Second Schedule; consequently, the order of the Tribunal is liable to be set aside. 5. Per contra, learned counsel appearing for the assessee placed heavy reliance on the letter written by stock broker dated 07.08.1993 that considering the volume of the rights to be disposed of within the limited period of 30 days, rightly the Tribunal had arrived at the conclusion to allow the appeal. 6. We do not agree with the submission made by the learned counsel appearing for the assessee. As already seen in the preceding paragraph, the assessee ....
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....hese rights in the open market; that ultimately faced with time constraint and the volume of rights to be disposed of, it had to sell the rights at Rs.5/- as against the prevailing market price of Rs.21.50/- each. In the circumstances, we hold that the view of the Tribunal is wholly without any material and the letter of the stockbroker cannot be taken as a good evidence for the purpose of accepting the value given by the assessee. Accordingly, the order of the Tribunal stands set aside and the Tax Case (Appeal) No.1033 of 2008 is allowed. 8. As far as T.C.(A)No.133 of 2008 is concerned, the assessee herein sold 43,535 Right PCD of EID Parry India Ltd. to his sister concern Tichain Invts. Pvt. Ltd. at Rs.5/-, which was far below the prev....