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2020 (10) TMI 40 - HC - Income TaxReopening of assessment u/s 147 - transfer of shares was a colourable device for evading payment of tax on capital gains - notice issued beyond four years from the end of the assessment year in question - change of opinion - HELD THAT:- While any profits or gains arising out of transfer of a capital asset shall be deemed to be the income of the previous year in which the transfer took place chargeable to income tax under the head 'capital gains', section 47(iii) makes it very clear that any transfer of a capital asset under a gift or will or an irrevocable trust shall not be liable to income tax under the head 'capital gains'. Evidently, the proviso is not applicable to the present case. While initially contention of the petitioner that such transfer of shares was a gift without consideration was accepted, subsequently the above view was revised to treat the transfer of shares not as a gift and to tax the said transaction on the market value of the shares; this is nothing but change of opinion. It is quite apparent that petitioner had placed before the assessing officer during the assessment proceedings all the primary facts wherefrom he made the inference. Now it is not open to the assessing officer to take a second view on the same set of facts treating the earlier view as erroneous. This is not permissible. We find that Tribunal in the case of Jayneer Infrapower and Multiventures Private Limited [2019 (3) TMI 686 - ITAT MUMBAI] examined such transaction of transfer of shares which was held to be a colourable device by the CIT(Appeals) and liable to be taxed on the market value of the shares. Tribunal recorded a categorical finding of fact that such transfer of shares without consideration was a gift which is valid, permissible and genuine. Referring to section 47(iii) Tribunal held that transfer of shares by way of gift is exempt from the provision of capital gains and concluded that transfer made as a gift without consideration is not taxable under the provisions of capital gains. Thus, the very foundation on which the impugned notice was issued no longer survives. - Decided in favour of assessee.
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