TMI Blog2018 (2) TMI 1218X X X X Extracts X X X X X X X X Extracts X X X X ..... others v. ITO [2016 (1) TMI 946 - GUJARAT HIGH COURT] 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 - Special Civil Application No. 20045 of 2017 - - - Dated:- 14-2-2018 - MR. AKIL KURESHI AND MR. B. N. KARIA, JJ. For The Petitioner : MR B S SOPARKAR, ADVOCATE For The Respondent : MRS KALPANAK RAVAL, ADVOCATE ORAL ORDER ( PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. Petitioner has challenged a notice dated 31.03.2017 issued by the respondent Assessing Officer seeking to reopen the petitioner's assessment for the assessment year 2010-11. 2. Brief facts are as under. 3. Petitioner is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er filed this petition. 5. As noted, the reasons cited by the Assessing Officer for issuing notice was that the assessee had transferred some 3,96,000 shares to one M/s.Nerka Chemicals Pvt. Ltd. on 26.02.2010. This was done without consideration. The market value of the shares on the date of transfer was ₹ 5.69 crores (rounded off). According to the Assessing Officer, the assessee was liable to pay capital gain on such transfer of shares which the assessee had not declared. 6. We are conscious that the return of the assessee was originally accepted without scrutiny and that therefore the Assessing Officer had much greater latitude in reopening such assessment. Nevertheless, even in such cases, reopening of the assessment is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 issued by the Central Government in this behalf. Under sub-clause (iii) of section 47 of the Act, therefore, nothing would apply to any transfer of capital assets under a gift or will or irrevocable trust. It is not the case of the Assessing Officer that the present case is not one of transfer of asset under a gift. In terms of sub-clause (iii) of section 47 of the Act, thus such transfer would not be governed by section 45 of the Act. For apparent reasons, the proviso to subsection (iii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able trust, the market value on the date of such transfer shall be deemed to be the full value of consideration received or accruing as a result of transfer for the purposes of this section. 13. For the simple reason this proviso 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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