TMI Blog2016 (1) TMI 946X X X X Extracts X X X X X X X X Extracts X X X X ..... quently, the provision of section 45 of the Act pertaining to capital gain would not apply. Also proviso to section 48 would not apply in the case on hand. Firstly section 48 of the Act itself provides for mode of computation of income chargeable as capital gain. Sub-clause (iii) of section 47 of the Act excludes application of section 45 of the Act in case of certain transfers. By no application of section 48 of the Act, such exclusion can be ignored. Section 48 of the Act only aims to provide for formula for computation of income chargeable as capital gain. Further, this proviso provides for computation of income which is referred to in proviso to sub-clause (iii) of section 47 of the Act, and thus, would cover cases which are to be excluded from the purview of sub-clause (iii) of section 47 of the Act. As noted, the case on hand does not fall within the proviso to subclause (iii) of section 47 of the Act, and therefore, mode of computation provided under section 48 of the Act would simply not apply. Thus The reasons recorded by the Assessing Officer to form belief that the income chargeable to tax had escaped assessment lack validity. - Decided in favour of assessee - SPECI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in. In any case, as donor, the petitioner had no tax liability on the gift so made. Taking us through the affidavit in reply filed by the respondent, counsel submitted that reliance on the further proviso to section 48 of the Act placed by the Assessing Officer was wholly baseless. 6. On the other hand learned counsel Shri Sudhir M. Mehta for the Department opposed the petition contending that return of the assessee was accepted under section 143(1) of the Act without scrutiny. There was no opinion formed by the Assessing Officer on the tax liability of the income in question as held by the Supreme Court in case of Assistant Commissioner of Income Tax Vs. Rajesh Jhaveri Stock Brokers P. Ltd., reported in 291 ITR 500 (SC). It is not necessary at this stage for the Assessing Officer to establish conclusively that the income chargeable to tax has escaped assessment. Counsel also relied on decision of this Court in case of Inductotherm (India) P. Ltd. Vs. M. Gopalan, Deputy Commissioner of Income Tax, reported in 356 ITR 481 (Guj.) in this context. Counsel also relied on the decision of the Supreme Court in case of Deputy Commissioner of Income Tax and another Vs. Zuari Estate Devel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to tax had escaped assessment. 8. In the case of Inductotherm (India) P. Ltd. Vs. M. Gopalan, Deputy Commissioner of Income Tax (supra) Division Bench of this Court, in the context of reopening of assessment which was framed without scrutiny held and observed as under: 13. Despite such difference in the scheme between a return which is accepted under section 143(1) of the Act as compared to a return of which scrutiny assessment under section 143(3) of the Act is framed, the basic requirement of section 147 of the Act that the Assessing Officer has reason to believe that income chargeable to tax has escaped assessment is not done away with. Section 147 of the Act permits the Assessing Officer to assess, re-assess the income or re-compute the loss or depreciation if he has reason to believe that any income chargeable to tax has escaped assessment for any assessment year. This power to reopen assessment is available in either case, namely, while a return has been either accepted under section 143(1) of the Act or a scrutiny assessment has been framed under section 143(3) of the Act. A common requirement in both of cases is that the Assessing Officer should have reason to belie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concluded that the income chargeable to tax had escaped assessment. 11. Quite apart from this, even on greater scrutiny of the statutory provisions, we find that the transaction in question did not invite any tax liability on the petitioner. Section 45 of the Act, as is well known, pertains to capital gains. Subsection (1) thereof in particular provides for charging of tax on any profit or gain from transfer of capital assets as deemed income of the assessee for the previous year in which transfer took place. Section 47 of the Act pertains to transaction not regarded as transfer. Subclause (iii), which is relevant for our purpose reads as under: 47. Nothing contained in section 45 shall apply to the following transfers :- (i) xxx xxx (ii) xxx xxx (iii) any transfer of a capital asset under a gift or will or an irrevocable trust: Provided that this clause shall not apply to transfer under a gift or an irrevocable trust of a capital asset being shares, debentures or warrants allotted by a company directly or indirectly to its employees under any Employees' Stock Option Plan or Scheme of the company offered to such employees in accordance with the guidelines iss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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