TaxTMI 
TaxTMI 
2017 (2) TMI 280
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....the assessment year 1995-96, the assessee has preferred the present tax appeal for consideration of the following substantial question of law which were framed while admitting the matters : "(I) Whether, in the facts and circumstances of the case the Income-tax Appellate Tribunal was right in law in holding that the appellant is not entitled to long-term capital loss of Rs. 19,61,617 as there is no valid transfer of the shares sold ? (ii) Whether, in the facts and circumstances of the case the Income-tax Appellate Tribunal was right in law in holding that the cost of shares which are pledged cannot be ascertained and resultantly since the machinery provisions of section 48 fails, loss arising from such transfer has to be d....
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....ubmitted that the shares in the company are movable property and can be transferred through deed of assignment and stated that the transfer is valid and long-term capital loss should be allowed to the assessee-company. Learned advocate appearing for the assessee relied upon the decision of this court in the case of Asst. CIT v. Biraj Investment (P) Ltd. [2012] 24 taxmann.com 273 (Guj) ; [2012] 210 Taxman 418 (Gujarat) ; [2014] 3 ITR-OL 157 (Guj) wherein it is held that the assessee, having entered into an agreement with the purchaser- company and further having given power of attorney and received the full sale consideration from the purchaser company, by virtue of section 2(47), for the purpose of Income-tax, transfer of share was complete....
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.... on sale of shares during the same previous years. 4. However, learned advocate for the respondent contended that the Tribunal found that the facts of the present case are distinguishable from that of the case before the Income-tax Appellate Tribunal in the case Biraj Investments (P.) Ltd. v. Asst. CIT and also before the hon'ble Madras High Court in case of A. M. P. Arunachalam v. A. R. Krishnamurthy. Section 536, sub-section (2) of the Companies Act, 1956 reads as : "(2) In the case of a winding up by or subject to the supervision of the court, any disposition of the property (including actionable claims) of the company, and any transfer of shares in the company or alteration in the status of its members, made after the co....
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....ave taken place on March 21, 1995 by the so called deed of assignment is void and therefore, the question of capital gain or loss does not arise. Section 536(2) of the Companies Act declares the transfer of shares during the liquidation proceedings as void. The transfer of shares includes transfer of rights in shares which is declared void under section 536(2) of the Companies Act and therefore, it is not a transfer at all and therefore, the question of capital gains/losses on the said transaction does not arise. Therefore, the transfer of 27410 shares of M/s Rustom Mills Industries Ltd by the assessee company by way of deed of assignment is held as void and not falling under section 2(47) of the Income-tax Act with no consequences as to th....