TMI Blog2024 (2) TMI 703X X X X Extracts X X X X X X X X Extracts X X X X ..... sources - Determining the FMV of the shares in terms of Explanation to Section 56(2)(viib) - assessing authority imposed tax treating the said 'Share Premium' as Income from Other Sources - Tribunal held that the provisions of Section 56(2)(viib) cannot be invoked in the case of assessee company when cash or asset is transferred by a mother to her daughter - directions issued by this Court in [ 2019 (5) TMI 952 - MADRAS HIGH COURT] , viz., that the assessing authority would undertake the exercise of fact finding by determining the fair market value of the shares in terms of Explanation to Section 56(2)(viib) was not adhered / complied with. HELD THAT:- To a pointed question as to whether the impugned order has been made in complianc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... z., that the assessing authority would undertake the exercise of fact finding by determining the fair market value of the shares in terms of Explanation to Section 56(2)(viib) of the Income Tax Act, 1961 (hereinafter referred to as the Act ), was not adhered / complied with. 2. Brief facts: The Company was initially formed by Mr.B.G.Raghupathy and his wife Sasikala Ragupathy, each holding 5000 shares. Upon the death of Mr.B.G.Raghupathy, his shares devolved on his daughter Mrs. Vaani Raghupathy. In order to purchase a property in Adyar, Chennai, Mrs.Sasikala Ragupathy brought in a sum of Rs. 23.32 crores through Banking Channels against which, she was allotted 10100 shares at a premium of Rs. 23,086/- per share. The total number of shares h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tual and legal contentions including the point about the said amount being treated as 'gift' from mother to daughter. The assessee may also seek necessary clarification from the Central Board of Direct Taxes on administrative side. (emphasis supplied) 5. It is submitted by the learned counsel for the petitioner that pursuant to the above orders of this Court, they approached the Central Board of Direct Taxes (CBDT) for a clarification vide letter dated 01.11.2019. While the said request for clarification was pending, the Respondent had issued a notice on 03.02.2021 under Section 142(1) of the IT Act calling upon the petitioner to furnish the following details: i) Detailed calculation of share premium. ii) P/L A/C and Balance sheet f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er that the writ petition was filed during Covid and in view of the delay in getting the writ petition numbered and to ensure that the challenge to the impugned orders are not hit by limitation, an appeal was also filed. It is further submitted that the same was filed for the limited purpose of saving limitation. A memo has been filed wherein it is stated that the petitioner has filed a petition for withdrawal of the appeal filed by them before the NFAC / CIT(A) on 27.10.2021. 5.4. It is informed by the learned counsel for the petitioner that their request has been subsequently rejected by CBDT stating that the power to clarify under Section 119 of the Act cannot be exercised to clarify individual cases. It is further submitted that now a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isdiction, in this regard it may be relevant to refer to the decision of the Hon'ble Supreme Court in the case of East India Commercial Co. Ltd. v. Collector of Customs, reported in AIR 1962 SC 1893 wherein it is held as under : 31..... Section 167(8) of the Sea Customs Act can be invoked only if an order issued under Section 3 of the Act was infringed during the course of the import or export. The Division Bench of the High Court held that a contravention of a condition imposed by a licence issued under the Act is not an offence under Section 5 of the Act. This raises the question whether an Administrative Tribunal can ignore the law declared by the highest court in the State and initiate proceedings in direct violation of the law so d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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