TaxTMI 
TaxTMI 
2015 (2) TMI 68
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....s have challenged the common order dated 03.05.2002 passed by the Income Tax Appellate Tribunal, Ahemdabad [for short "the Tribunal"] in ITA Nos. 1785 to 1788/Ahd/96, whereby the Appeals filed by the revenue were allowed by the Tribunal. 3. The facts and question of law involved in these appeals are identical, therefore, we discuss only the facts of Tax Appeal No.293 of 2002 for our convenience. 4. The facts in brief are that the appellant-assessee was beneficiary in S.K. Patel Specific Family Trust. The appellant sold his 3% beneficiary interest in S.K.Patel Family Trust for Rs. 85,000/-. The said amount was considered not taxable in the Return of Income. The Assessing Officer passed an order, holding that the capital gain accrued to....
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....ital asset "Beneficial interest", therefore, the amount of settlement by settlor cannot be treated as cost of acquisition. He, therefore, urged that this Court may quash and set aside the impugned order of the Tribunal. 6.1. In support of his contentions, he relied upon the decisions of the Apex Court in the case of Commissioner of Income Tax v. D.P. Sandu Bros. Chembur P. Ltd., reported in [2005] 273 ITR, page 1 , and in the case of PNB Finance Ltd. v. Commissioner of Income Tax, reported in [2008] 307 ITR 75 . 6.2. Learned senior counsel for the appellants-assessees has also relied upon the decision of this Court in the case of Chntan N. Parikh v. Commissioner of Income Tax, reported in [2002] 253 ITR 564 and contended that in view ....
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....jected to capital gains because the cost of its acquisition was inherently incapable of being determined. Pathak J. as his Lordship then was, speaking for the Court said: "What is contemplated is an asset in the acquisition of which it is possible to envisage a cost. The intent goes to the nature and character of the asset, that it is an asset which possesses the inherent quality of being available on the expenditure of money to a person seeking to acquire it. It is immaterial that although the asset belongs to such a class it may, on the facts of a certain case, be acquired without the payment of money." 9. In other words, an asset which is capable of acquisition at a cost would be included within the provisions pertaining to the hea....
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....t that such a case was not intended to fall within the charging section, which, in the present case, is Section 45. That section contemplates that any surplus accruing on transfer of capital assets is chargeable to tax in the previous year in which transfer took place. In this case, transfer took place on 18.7.1969. The second test which needs to be applied is the test of allocation/attribution. This test is spelt out in the judgment of this Court in Mugneeram Bangur & Co. (supra). This test applies to a slump transaction. The object behind this test is to find out whether the slump price was capable of being attributable to individual assets, which is also known as item-wise earmarking. The third test is that there is a conceptual differen....
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....ncerns assessment year 1970-71, it was not possible to compute capital gain and, therefore, the said amount of Rs. 10.20 cr. was not taxable under Section 45 of the 1961 Act. Accordingly, the impugned judgment is set aside. 19. Before concluding, we may state that in this case, Section 55(2)(i) did not operationalize. Under Section 55(2), fair market value as on 1.1.1954 could have substituted the figure of cost of acquisition provided the figures of both "cost of acquisition" and "fair market value as on 1.1.1954" were ascertainable. The letter dated 30.9.1970 does not indicate the choice. Even the working done by the AO based on capitalization of last 5 years' profits would give the Enterprise Value of the Undertaking and not the c....