TMI Blog2020 (12) TMI 592X X X X Extracts X X X X X X X X Extracts X X X X ..... le to point out why the above decision of this Court rendered in the context of capital assets as defined in Section 2(14) of the Act, is inapplicable to the present facts. Nor, why the loan given to M/s. SNISL would not, in the present facts, be covered by the meaning of capital asset as given under Section 2(14) of the Act. As the issue raised herein stands concluded by the decision of this Court in M/s. Bafna Charitable Trust [ 1997 (9) TMI 93 - BOMBAY HIGH COURT] and also by the self evident position as found in Section 2(14) of the Act, the question as framed does not give rise to any substantial question of law. The share application money is nothing but mere advances till the time the shares are allotted and share application money is converted into share capital. This is further fortified by the fact that the provisions of The Companies Act provide for refund of share application money with interest under certain circumstances. Thus we hold that the share application money as transferred / assigned by the assessee would constitute a Capital Asset within the meaning of Sec.2(14) of the Act. It does not fall under any of the exclusions. Consequently, the resulta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equiring rectification. Therefore, we are inclined to recall Ground No. 3(c) and 3(d) with the limited purpose for adjudicating on the issue of advance for share application, whether it can be considered as capital asset by considering the decision of Jurisdictional High Court in the case of CIT V/s Siemens Nixdorf Information Systems Gmbh (supra). At this stage, we are not inclined to adjudicate on merits or express our opinion on this issue. Accordingly, we direct the registry to fix the present appeal with limited purpose of adjudication of only ground no. 3(c) and 3(d) before the regular bench and issue notices to both the parties for hearing. Pursuant to the same, we proceed to re-adjudicate the issue whether share application money could be considered as capital asset or not which are the subject matter of Ground Nos. 3(c) 3(d) of revenue s appeal. 2. We have carefully heard rival submissions, oral as well as written and carefully perused relevant material on record including orders of lower authorities and the earlier order of the Tribunal dated 30/08/2019. We have deliberated upon various judicial precedents as cited before us during the course of hearing. Our adj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court in the case of CIT V/s Siemens Nixdorf Information Systems Gmbh (ITA No.1366 of 2017 dated 26/08/2019) wherein revenue assailed the decision of a Tribunal by raising a question whether the loan given by a foreign company to its Indian subsidiary would constitute capital asset within the meaning of section 2(14) of the Act or not? The facts, as emanating from the said decision, are that a foreign entity advanced loans to its subsidiary and owing to financial troubles, it sold its debt to another entity thereby incurring short term capital loss in the process. The Ld. AO denied the same on the ground that debt would not constitute capital asset within the meaning of Sec.2(14) and further no transfer took place on assignment of a loss in terms of Sec.2(47) of the Act. The Ld. CIT(A), while holding that there was indeed a transfer u/s 2(47), confirmed the stand of Ld. AO that the debt was not a capital asset. Upon further appeal by assessee, the co-ordinate bench of the Tribunal, inter-alia, considering the meaning of term property, held the debt to be a capital asset and allowed the assessee s appeal. Accordingly, the revenue was in further appeal before Hon ble Bombay Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e definition of capital assets under Section 2(14) of the Act. It held that it defines the term 'capital asset' as 'property of any kind held by an assessee, whether or not connected with his business or profession', except those which are specifically excluded in the said section. It further records the exclusion is only for stock in trade, consumables or raw materials held for purposes of business. It thereafter examined the meaning of the word 'property' to conclude that it has a wide connotation to include interest of any kind. It places reliance upon the decision of this Court in the case of CWT v/s. Vidur V. Patel [1995] 215 ITR 30 rendered in the context of Wealth Tax Act, 1957 which while considering the definition of asset had occasion to construe the meaning of the word property . It held the word property to include interest of every kind. On the aforesaid basis, the Tribunal held that in the absence of loan being specifically excluded from the definition of capital assets under the Act, the loan of ₹ 90 lakhs Euros would stand covered by the meaning of the word capital asset as defined under Section 2(14) of the Act. It also held tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dur Patel (supra) has observed as under: - So far as the meaning of 'property' is concerned, it is well settled that it is a term of widest import and subject to any limitation which the context may require, it signifies every possible interest which a person can hold or enjoy. As observed by the Supreme Court in Commissioner, Hindu Religious Endowments vs. Shri Lakshmirudra Tirtha Swami of Sri Shirur Mutt (1954) SCR 1005, there is no reason why this word should not be given a liberal or wide connotation and should not be extended to those well-recognized types of interests which have the insignia or characteristic of property right.: The only objection of the Revenue to the above decision being relied upon is that it is rendered under a different Act. We are unable to understand this distinction when both the Acts are cognate. However, this submission need not detain us, as this Court had occasion to consider the meaning of the word capital asset as defined in Section 2(14) of the Act in Bafna Charitable Trust v/s. CIT 230 ITR 846. In the above case, this Court observed as under: - Capital asset has been defined in clause (14) of section 2 to mean ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
