1985 (9) TMI 80

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....r 1965-66 in terms of the provisions of section 64(v) of the Income-tax Act, 1961 ? (2) Whether, on the facts and in the circumstances of the case, 3,000 shares of Great Eastern Shipping Co. Ltd., settled upon trust by the assessee for the benefit of minor son, Ravi, vide deed dated March 13, 1964, could be said to have been transferred by the assessee to the trustees for adequate consideration ? (3) Whether, on the facts and in the circumstances of the case, the dividend income in respect of the above 3,000 shares of Great Eastern Shipping Co. Ltd. is includible in the total income of the assessee-settlor for the assessment year 1965-66 in terms of the provisions of section 64(v) of the Income-tax Act, 1961 ? " Counsel are agreed ....

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....ted. The Income-tax Officer brought the capital gain to tax in the hands of the assessee under section 64(v) of the Income-tax Act, 196 I.. In appeal, the Appellate Assistant Commissioner confirmed the order. The assessee went in appeal to the Income-tax Appellate Tribunal. The Tribunal, following an earlier precedent, held that the transfer of the shares had been effected for full and adequate consideration so that the condition necessary for the application of section 64(v) was not fulfilled. The Tribunal accordingly deleted the amount of Rs. 44,726 from the assessment made upon the assessee. Mr. Jetly, learned counsel for the Revenue, relied upon the decision of this court in Sevantilal Maneklal Sheth v. CIT [1965] 57 ITR 45. The a....

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....urt, and dealing with it, the Rajasthan High Court referred to the well-settled rule of interpretation that unless the terms of a statute expressly so provided or necessarily required it, retrospective operation should not be given to it so as to take away or impair an existing right or create a new obligation or impose a new liability. Unlike section 60, the Income-tax Act, 1961, the expression " whether effected before or after the commencement of this Act" did not find mention in section 64. There was nothing in section 64(iv) to show that the provisions were retrospective. All laws were considered to be prospective unless made retrospective by express words or by necessary implication. Section 64(iv) was, therefore, only prospective. Th....