TMI Blog2014 (8) TMI 907X X X X Extracts X X X X X X X X Extracts X X X X ..... ares would form part of the corpus and should not be treated as voluntary contribution - right from the very beginning that even when the return of income was filed on 30.10.06, the stand of the respondent assessee was that 16,50,000 shares of Nicholas Piramal India Limited were gifted towards and to form part of the corpus of the trust - the assessee trust had sold 4 lac shares in terms of Section 49(1)(ii) - The period of holding of the donor had been taken into consideration and the costs of acquisition was taken as “Nil” but the gain from transfer of the shares were exempt u/s 10(38) of the Act – Decided against Revenue. Exemption u/s 11 to 13 - Whether the assessee had violated Section 13(1)(d) of the Act and therefore should be denied exemption under Section 11 to 13 of the Act – Held that:- The shares were acquired by the assessee on 03.08.05 - as per Clause (iia) to the proviso, Section 13(1)(d), would be applicable, post period of one year from the end of the previous year in which the shares were acquired - there would be no violation of Section 13(1)(d) on the part of the respondent assessee till 31.03.07 - the assessee had rightly claimed that they had not violated S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation, from The Piramal Enterprises Executives Trust on 03.08.2005 was, towards corpus of the respondent trust. He held that the market value of the shares received was taxable in terms of Section 2(24)(iia) of the Act and accordingly made an addition of ₹ 42,41,32,500/-. On the question of income from capital gains, as the respondent assessee had sold 4 lac shares of Nicholas Piramal India Limited during the period 20.12.05 to 03.01.06 for consideration of ₹ 11,41,95,430/-, the Assessing Officer held that there was a distinction between donation and gift and being a donation the short term capital gains was computed as ₹ 1,13,75,430/-, instead of declared income of ₹ 13,95,711/-, in the revised return dated 10.01.2007. 5. In the first appeal, the Commissioner of Income Tax (Appeals) came to the conclusion that the assessee could not have filed the revised computation and decision of Goetze (India) Limited case (supra) was applicable. Reliance placed on the decisions by the respondent assessee did not permit the assessee from getting over the revised return. However, he deleted addition of ₹ 1,13,75,430/-. With regard to addition of ₹ 42,41,3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the assessee during the course of the assessment proceedings, before the Assessing Officer had stated that they had proceeded on wrong legal advice and would like to withdraw the revised return filed on 10.01.2007 and would rely upon the original return dated 30.10.2006. The Assessing Officer in fact has gone into the merits and examined the assertions, made in the original return. 11. In the case of NTPC case (supra), the Supreme Court had clarified that the legal issue, which does not involve disputed facts, can be entertained even at the appellate stage. Similar view has been expressed in the case of Jute Corporation of India case (supra), in which Supreme Court observed that 6 . The declaration of law is clear that the power of the Appellate Assistant Commissioner is co-terminus with that of the Income Tax Officer, if that be so, there appears to be no reason as to why the appellate authority cannot modify the assessment order on an additional ground even if not raised before the Income Tax Officer. No exception could be taken to this view as the Act does not place any restriction or limitation on the exercise of appellate power. Even otherwise an Appellate Authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer has noted that The Piramal Enterprises Executive Trust had passed the following resolution in their meeting held on 03.08.05. Resolved that 16,50,000/- equity shares of ₹ 2/- each in Nicholas Piramal India Limited be and hereby transferred without any consideration to The Ajay G Piramal Foundation 58 Ring Lajpat Nagar III New Delhi 24 and that Mr Ajay G Piramal, and / or Dr Swati A Piramal and /or Mr N Santhanam are hereby severally authorized to do all such acts, deed mattes and things as are necessary to effectuate the above transfer. The aforesaid resolution states that 16,50,000/ shares of ₹ 2/- each of Nicholas Piramal India Limited should be transferred to the respondent assessee trust and the persons, mentioned therein, were severally authorized to do all such acts, deeds, matters and things as were necessary to effectuate the above transfer. By a contemporaneous letter dated 03.08.05, executed by the donor trust to the respondent assessee, it was informed: Date: August 3, 2005 The Trustees, The Ajay G.Piramal Foundation, 58, Ring Road, Lajpat Nagar III, New Delhi 110024. Dear Sirs, Re: Gift of 1,650,000 shares of Nicholas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and given the following note:- On August 3,2005 the trust has received 1,650,000 shares of Nicholas Piramal Limited as a gift from the Piramal Enterprises Executive Trust towards the corpus of the trust which is exempt under section 11(1)(d) of the Act. During the year under consideration the trust has sold 400,000 shares of Nicholas Piramal India Limited in terms of section 49(1)(ii) of the Act, the cost of acquisitions of the shares shall be the cost for which the donor of the shares has acquired it, which is Nil. As specified in Explanation to section 2(42A) of the Act, in determining the period for which the shares were held by the trust, the period for which the shares were held by the trust the period of which the shares were hold by the Donor is included the period of holding of the above shares were for more than 12 months. The shares are sold on a stock exchange and the transaction is chargeable to securities transaction tax accordingly, the gains arising on transfer of shares are characterized as long term capital gain and the same are exempt under section 10(38) of the Act. 16. It is, therefore, clear, right from the very beginning that even when the return ..... X X X X Extracts X X X X X X X X Extracts X X X X
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