TMI Blog2019 (5) TMI 952X X X X Extracts X X X X X X X X Extracts X X X X ..... rtaking the said fact finding exercise. The Assessee will be free to raise all factual and legal contentions including the point about the said amount being treated as 'gift' from mother to daughter. The Assessee may also seek necessary clarification from the Central Board of Direct Taxes on administrative side. Therefore, without expressing any opinion on the merits of the case and answering the questions sought to be raised in the present Appeal under Section 260A of the Act, we dispose of the Appeal filed by the Revenue by remitting the matter back to the Assessing Authority. - Tax Case Appeal No.224 of 2019 - - - Dated:- 4-4-2019 - Dr. Justice Vineet Kothari And Mr. Justice C.V. Karthikeyan For t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... volved upon the only daughter Mrs.Vani Ragupathy. In order to purchase a property in the prime area of Adyar, Chennai, Mrs.Sasikala Ragupathy introduced a sum of RS.23.32 Crores in the Company through Banking Channels and from the said money brought into the Company, she was allotted 10100 shares at a premium of RS.23,086/- per share. The Assessing Authority imposed tax treating the said 'Share Premium' as Income from Other Sources under Section 56(2)(viib) of the Act, which was confirmed by the learned Commissioner of Income Tax (Appeals). However, the Tribunal has allowed the Appeal of the Assessee the with the following observation:- 7.3. It should be also kept in mind that provisions of Section 56 (2)(v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with respect to transfer of shares, the corporate veil of the company has to be lifted and inferred that there is no transfer of shares and accordingly capital gain tax is not exigible. From the above it is apparent that even when there are transfer of shares physically, in the event of family arrangements, the Hon'ble High Courts have held that the entire transactions has to be viewed lifting the corporate veil and treat the transaction as if there is no transfer of shares and hence capital gain tax is not attracted. Similarly we are of the view that in the case of the assessee company also the corporate veil is required to be lifted and thereafter the transaction has to be viewed in the light of the relevant provisions of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the shares in question, which as contended by the Assessee, had gone up subsequently, on account of purchase of a prime property made by the Company in Adyar, Chennai just before the allotment of the Shares in favour of Mrs.Sasikala Raghupathy and the Assessing Authority was bound to compute the Fair Market Value taking into account the relevant factors as per Explanation (a)(ii) of Clause (viib) aforesaid. He further submitted that Section 56(2)(x) and proviso thereto states that the said clause does not apply to any sum of money or principal received from any relative and therefore, the indirect benefit of the said share premium paid by the mother on the allotment of share was imminent benefit conferred upon the daughter. The only other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion for issue of shares that exceeds the face value of such shares, the aggregate consideration received for such shares as exceeds the fair market value of the shares: Provided that this clause shall not apply where the consideration for issue of shares is received- (i) by a venture capital undertaking from a venture capital company or a venture capital fund; or (ii) by a company from a class or classes of persons as may be notified by the Central Government in this behalf. Explanation.-For the purposes of this clause,- (a) the fair market value of the shares shall be the value- (i) as may be determined in accorda ..... X X X X Extracts X X X X X X X X Extracts X X X X
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