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TMI Blog2015 (5) TMI 922X X X X Extracts X X X X X X X X Extracts X X X X ..... h was a charitable association and therefore, the receipt did not constitute long term capital gain. However, Ld. CIT(A) has rejected the ground regarding service of notice by holding as under: "4.2. The assessee is in appeal against the issue of notice U/S 143(2) and it is submitted that the AO is not justified to make the assessment as the notice was issued beyond the period of 12 months. 4.3. The submission of the assessee was forwarded to the AO and a remand report dated 0110812011 has been forwarded by the Addl. CIT Range-30, New Delhi vide the letter dated 01/08/2011. It is submitted by the AO that the assessee had filed the return on 25/07/2008 and as such the AO was justified to issue the notice by the end of September 2009 as provided in the proviso u/s 143(2). It is submitted that as per the amended provisions of the proviso u/s 143(2) w.e.f. 01/04/2008. The AO is entitled to issue the notice within six months from the end of the FY in which the return is filed. 4.4. I have considered the order of the AO, remand report of the AO and the submissions of the assessee and I do not find any merit in the submission of the assessee. The provisions of section 143(2) has been a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the AO has rightly issued the notice in time and accordingly, the appeal of the assessee on this ground is dismissed and the action of the AO is confirmed." 2. Ld. CIT(A) has decided the issue on merits by holding as under: "5.2. The assessee was having the membership ticket of erstwhile the Delhi Stock Exchange Ltd (D E) which was later on dissolved and the assessee received the amount of Rs. 44,00,000/- for the membership card of the DSE which was not declared by the assessee as income in the income tax return. During the course of assessment proceedings, the AO had found out that the assessee has included the amount of Rs. 44.00,000/- in the capital account of the assessee and claimed the amount as exempt on the ground that the DSE was a charitable organization and the amount was received as part of the demutualization. The AO was not satisfied with the explanation of the assessee and held that the amount of Rs. 44,00,0001- was taxable as a long term capital on the ground of sale of allotted equity shares and trading rights. 5.3. The assessee is in appeal against the order of the AO and it is submitted that the AO is not justified to make the addition as the DSE was char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. This right can be disposed of by a member by nomination, though subject to the rules and regulations of the stock exchange and settlement of debts and liabilities of the members of the stock exchange. The judgment of the Supreme Court in Stock Exchange, Ahmedabad v, Asst. CIT [200 I] 248 ITR 209 applies only to cases where the membership has ceased and has vested with the stock exchange authorities. It cannot apply to cases of continuing membership. Accordingly, in the present case, the transfer of membership card by the assessee to A Ltd. was a transfer of a capital asset within the meaning of section 2(14) of the Act and consequently the consideration for the transfer is exigible to capital gains tax (Note) - The membership card of stock exchange was treated as a capital asset, so that any amount in realization on transfer of the membership card would be liable to capital gains tax as held by the Tribunal in R. M. Valliappan v. Asst. CIT [2006] 287 ITR (AT) 203 (Chennai) [SB] following a number of precedents on the subject both under income-tax law and in company cases. The assessee had relied upon the decision of the Supreme Court in Ahmedabad Stock Exchange v. Asst. CIT [200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the remand report, the A.O. has replied to the questions as raised by the Bench vide order sheet dated 18.11.2014. The remand report as sent by A.O. is reproduced below: " Office of the Income Tax Officer, Ward 48 (5), Room No.217, Drum Shape Building, New Delhi. Ph.No.011-3370124 IF. No.ITO/ Ward 48(5)/2014-15/ 39, Dated: 18/03/2015 To The Sr. Departmental Representative, E-Bench, ITAT, Lok Nayak Bhawan, Khan Market, New Delhi. (Through Jt. CIT, Range-48, New Delhi.) Sir, Sub.: Remand Report in the case of Sh. Madhusudan Lal Nanda, Prop. M/s Wazir Chand Nanda & Co. in appeal No. 4799/0/2011 for A.Y. 2008-09 - reg. Kindly refer to your letter F.No. Sr. D.R./E-8ench/ITAT/2014-15/89 dated 05/02/2015 on the above subject. As desired by your goodself, remand report on the following points is as under: i) How cash was given by DSE to assessee? In this regard it is submitted that the above amount was received by the assessee by two cheques of Rs. 20 lac and 24 lac respectively. ii) Whether cash was given to other members also on demutualization of DSE? On perusal of the records, no such information as to whether cash was given to other members also on demutualization o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve and grounds of appeal, and other relevant material from the record. While dictating the order, it was felt that a further remand report regarding further clarifications be sought from A.O., therefore, an order was passed vide order sheet entry dated 01.04.2015 and a copy of which was handed over o Ld. D.R. with a direction that remand report be submitted by 20th April, 2015 but till the passing of this order, remand report has not been received. Therefore, this appeal has been disposed off on the basis of material available on record. We find that the issue before us is as to whether the notice u/s 143(2) was served upon the assessee within the prescribed period of time. Ld. CIT(A) has dismissed this ground of appeal holding that the notice was issued within the prescribed period of time. He has not mentioned about service of the said notice, therefore, we deem it appropriate to set aside this ground or appeal to the office of A.O. who on the basis of record will find out as to whether the service of notice u/s 143(2) was within the prescribed period of time and accordingly will decide this legal issue as per law. 6.1 As regards the issue of taxability of receipt of Rs. 44 lacs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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