TMI Blog2006 (4) TMI 245X X X X Extracts X X X X X X X X Extracts X X X X ..... pressed ground No. 2, in which it is mentioned that the learned CIT(A) erred in confirming the disallowance of short-term capital loss incurred by the assessee. Ground No. 6 is in the nature of prayer that the Assessing Officer may be directed to adopt the cost of shares at Rs. 10 per share. 2.1 The findings of the learned CIT(A) , with regard to ground No. 2, are contained in para 4.4 of his order, which is reproduced overleaf for the sake of ready reference:- "4.4 It is an admitted fact that the appellant had subscribed to the impugned shares at par. The cost of acquisition of the shares therefore, was Rs. 10 lakhs. After acquiring the shares, however, the appellant transferred the shares to the AOPs by way of revocable gift deed. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere not included in his net wealth for the purpose of levy of wealth-tax. These shares were purchased by the assessee at the cost of Rs. 10 per share on 29-3-1982. The gift was revoked on 31-12-1988 and the shares were sold on 27-3-1989. Therefore, there was a question of finding out the cost of the share to the assessee. The case of the learned counsel was that these shares had been purchased in the past at the rate of Rs. 10 per share and, therefore, the value on this basis ought to have been adopted for the purpose of computing loss to the assessee. It was stated that since the assessee had actually paid the cost at the rate of Rs. 10 per share, there was no question of holding that the cost was not ascertainable in the case of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g before us, the intent and purpose of gifting the shares to the AOPs under a revocable gift, was ascertained from the learned counsel. It was pointed out that the revocable transfer of shares was made to the AOPs as a matter of wealth-tax planning. At the time of gifting the shares, the AOPs in which members had specified the shares in its wealth, were not liable to pay wealth-tax. Therefore, both the assessee and the AOPs escaped taxation on the value of shares under the Wealth-tax Act, 1957. However, the aforesaid tax planning was undone when such AOPs were also brought to tax under that Act. Consequently, the assessee revoked the gifts, which he was empowered to do under the original gift-deed. Nonetheless, his case was that since the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o clear from the fact that the assessee excluded the value of the shares from its net wealth. Thus, according to the assessee's own conduct, the right of revocation had only the nil value. Coming to the point of law, raised by the learned counsel, it may be pointed out that section 49(1)(iii)(d) deals with a situation where the capital asset becomes the property of the assessee under a transfer to a revocable or an irrevocable trust. Therefore, this clause applies to a situation where any asset is transferred to a revocable or an irrevocable trust. This section does not apply where the capital asset becomes the property of any assessee on revocation of the trust. Thus, the question regarding finding out the cost to the previous owner or det ..... X X X X Extracts X X X X X X X X Extracts X X X X
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