TMI Blog2018 (3) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... he fact that the necessary pre-conditions of treating M/s Dua Engineering Pvt. Ltd., as an investment company did not exist. If rule was inapplicable, the other mechanism of applying the value of a non-investment company, was to apply. This meant that the book value of the share (Rs.6.86) had to be applied. Therefore, ₹ 10/- value at which the assessee sold her shares to her husband in 1993 could not be treated as inadequate consideration. The findings of the lower authorities are, therefore, in error of law. The question of law is answered in favour of the assessee. - GTA 1/2007 AND GTA 2/2007 - - - Dated:- 22-2-2018 - MR. S. RAVINDRA BHAT AND MR. A.K. CHAWLA JJ. Appellant Through: Mr. K. Sampath, Adv. Respondent Throu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eals. At the same time, the Commissioner of Gift Tax acknowledged that under Rule 2 (6) of Schedule III to the Wealth Tax Act, 1957 (which was made applicable by virtue of Rule 11 to the II Schedule to the Gift Tax Act) read with Section 6, an investment company is deemed to be one, which reports income from capital gains, house property or income from other sources yet went on to hold that subsequent sale of property at a much higher price is a relevant circumstance and on that basis, upheld the GTO s order. The ITAT concurred with that too. 3. It is argued on behalf of the assessee that revenue authorities were unduly influenced by the valuation of a property i.e. an industrial plot which had devolved upon the assessee s husband in 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appreciation of facts and are concurrent throughout. It is urged that the value of the property was a necessary and relevant consideration. Though the property devolved on the husband, it became an asset of the company and therefore, it s realistic or market value had to be reckoned for the purpose of valuing the share. Learned counsel also argued that the facts were glaring that the wife sold the shares to her husband at ₹ 10 and in the same year, the same shares were sold at a market value of ₹ 1400/-. These facts could not and were not ignored by the Revenue authorities. Furthermore, M/s Dua Engineering Pvt. Ltd. did not undertake any activity commercial or industrial and in these circumstances, the findings rendered by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the heads Income from house , Capital gains and Income from other sources. 8. The discussion of the lower appellate authority reveals that M/s Dua Engineering Pvt. Ltd., had hardly any commercial or industrial transaction. It did not even report much income. The CIT(A) was cognizant of the fact that under Rule 2(6), an investment company is one where the gross total income consists mainly of income chargeable to income tax under the heads income from house property, capital gains and income from other sources. However, the CIT went on to hold that the said provision applies only when the company has any real gross total income at all . Given that M/s Dua Engineering Pvt. Ltd. merely held investments in the industrial plot, at ..... X X X X Extracts X X X X X X X X Extracts X X X X
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