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2016 (5) TMI 1549 - ITAT CHENNAICapital asset being trademark - Treatment of asset transferred viz. “Trade Mark” as short term capital gains and disallowing the claim u/s.54F - Trust v/s settlement - difference between Gift and Settlement and the Explanation-1(i)(b) to Sec.2(42A) r.w.s.49(1)(ii) - HELD THAT:- There are striking differences between a settlement and a gift. Under no circumstances can a settlement be equated to a gift. The appellant’s contention of importing the definition of gift from the Gift Tax Act, 1958, which is no longer in existence, is not a valid proposition. Whether the capital asset is a Long Term Capital Asset or a Short Term Capital Asset under the Income Tax Act? - In our opinion the artificial distinction made by the lower authorities with reference to the Gift and Settlement is not appropriate and we are of the opinion that for the purpose of Sec.49(1)(ii), there is no difference between the gift and settlement and in the present case, the settlement made by Mrs.Malathy Rangaswami & Mr.T.T.Ashok in favour of Mrs.Maya Varadarajan to be considered as Gift in terms of Sec.49(1)(ii) of the Act and accordingly, Explanation-1(i)(b) to Sec.2(42A) to be applied so as to compute the holding period of the asset after considering the holding period of the said capital asset by previous owner i.e. SETTLOR. In the present case, the date from which “SETTLOR” holding the title over the Registered Trade Mark “PREETT” is not available on record and we are not in a position to give a finding whether transfer of this Trade Mark by the present assessee would give rise to short/long term capital gains. Hence, this issue is remitted to the file of AO to determine the period of holding of this impugned capital asset and decide the issue afresh.
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