TaxTMI 
TaxTMI 
2003 (8) TMI 30
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....y quashing the order of the Commissioner (Appeals) by holding that the transaction did not result in taxable capital gains? 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that there was no capital gains in the transaction in question? 3. Whether, when the Tribunal held under order dated November 27, 1986, that there was no genuine conversion of the shares and debentures into stock-in-trade before transferring the same into partnership firm, the Tribunal was right in law in entertaining the claim of the assessee that the transfer did not result into taxable capital gains?" The assessment year is 1982-83 and the corresponding accounting period is Samvat year 2037. The asse....
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.... assets into stock-in-trade was a legal device to avoid tax and hence the Assessing Officer had rightly treated the surplus arising from such transaction as income liable to capital gains tax. The assessee carried the matter by way of second appeal before the Tribunal and the said appeal came to be registered as I.T.A. No. 1324/Ahd of 1986. On November 27, 1986, the Tribunal upheld the orders of the Assessing Officer and the Commissioner of Income-tax (Appeals) holding that there was no genuine conversion of the shares into stock-in-trade before transferring the same into the partnership firm. The Tribunal also simultaneously held that the transaction would amount to a transfer within the meaning of section 2(47) of the Act in the light of....
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....cquires on contributing an asset to the firm as capital cannot fall within the terms of section 48 of the Act and in these circumstances as the computation machinery incorporated in the scheme relating to determination of the charge provided in section 45 of the Act fails, such a case falls outside the scope of capital gains taxation. The Tribunal accordingly accepted the miscellaneous application filed on behalf of the assessee holding that there was no taxable capital gains arising out of the transactions in question. Mr. M.R. Bhatt, learned senior standing counsel appearing on behalf of the applicant-Revenue, submitted that once the Tribunal had upheld the case of the Revenue that the transaction relating to conversion of assets into s....
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....cond proposition of law enunciated by the Supreme Court in the said decision. Hence, the Tribunal was perfectly justified in exercising its powers under section 254(2) of the Act while passing the impugned order dated March 10, 1987. The contention regarding non-genuineness of the transaction requires to be stated only to be rejected. The Revenue admits in no uncertain terms that the capital assets were transferred within the meaning of section 2(47) of the Act from the assessee to the partnership firm by way of capital contribution, and once this is so, it is not possible for the Revenue to contend that the firm was not genuine. The moment the Revenue takes up that stand, there can be no transfer of the assets and there can be no movement....