TMI Blog1976 (12) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessment year 1965-66. A private company owned several buses in relation to which they held what are known as route permits and which, under the motor vehicles parlance, are called permits attached to motor vehicles. There were certain tranfers effected by this firm in view of domestic arrangements as between the shareholders. Consequent upon such arrangements, of the buses were transfered to three of the shareholders, simultaneous with such transfers, the Tribunal records, " The rights to ply them on the respective routes were also transferred simultaneously in each case." We shall make a comment on this in the course of our judgment. When the buses were transferred, the written down value was taken into consideration for the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evaluation of the buses as above and added on the sum of Rs. 74,463 as assessble income in the hands of the assessee by reason of the transfer of the " route rights ". Another addition was male, with which we are not concerned. The Appellate Assistant accepted the contention of the assessee that, in the absence of any material on record to show that the transfer was with the object of avoidance or reduction of the liability of the assessee and as there is no finding either to that effect, the additions are not supportable. The department took it up in appeal before the Appellate Tribunal. The Appellate Tribunal, once again, agreed with the Appellate Assistant Commissioner, but found factually as follows : " (i) There is no material to sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res a capital asset from an assessee is directly or indirectly connected with the assessee and the Income-tax Officer has reason to believe that the transfer was effected with the object of avoidance or reduction of the liability of the assessee under section 45, the full value of the consideration for the transfer shall, with the previous approval of the Inspecting Assistant Commissioner, be taken to be the fair market value of the capital asset on the date of the transfer." The two essential limits of this sub-section can be stated as follows : (i) the person who acquires a capital asset from an assessee is directly or indirectly connected with him, and (ii) the Income-tax Officer has reason to believe that the transfer was effec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f section 52 would apply. This is a case in which one set of shareholders in a private company transfer their shares which are in the nature of stock to another set of shareholders. Therefore, it is not a transfer which would squarely come within the language of sub-section (2) of section 52. But on the other hand, it fits in with the description given in sub-section (1). As already stated, the objection to the transfer contemplated in sub-section (1) of section 52, in relation to which the Income-tax Officer is given a privilege to reassess and find what is known as the fair market value, is dependent upon his finding that the transfer was effected with the object of avoidance or reduction of the liability. The Tribunal finds, as a fact, w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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