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2014 (10) TMI 253 - HC - Income TaxBenefit / perquisit u/s 2(24)(vd) r.w. section 28(iv) – Difference in value of shares alloted at concessional rate – profits and gains of business or profession - According to the ITO, the market price was ₹ 455 per share, whereas it was allotted at ₹ 90 per share, on preferential allotment - Held that:- Even if all the subsidiary contentions advanced by the respondents in this behalf are rejected, the fact remains that there is a clear bar for a block period of three years prohibiting the sale of shares.- the benefit can be said to have arisen to an individual, if only, any person in his place, would have got the differential price, by selling the shares - Irrespective of the willingness or otherwise of the person holding such a share, if the bar operates, it is difficult to imagine that the sale of the shares would take place or that it would yield the differential price – the Tribunal was rightly was of the view that as long as the bar operated, the question of any benefit in the form of differential price, accruing to the respondents, does not arise – Decided against revenue. Whether the benefit has accrued at all to the respondent – Held that:- There exists a distinction between the "accrual of income", on the one hand, and "arising of income", on the other - while accrual is almost notional in nature, the other is factual - in its complex nature, the Act covers not only the "income" that, in fact, has arisen, but also the one that has accrued - The sole basis for levying income-tax on the amount was on the assumption that in case the shares are sold, they would have yielded the differential price and that, in turn, can be treated as "income" - the Tribunal has explained the subtle distinction between the two, in a perfect manner and arrived at the correct conclusion – no substantial question of law arises for consideration – Decided against revenue.
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