Bombay High Court
M/S. Jamnalal Sons Private ... vs Deputy Commissioner Of Income ... on 23 November, 2021
Bench: A.S. Chandurkar, G. A. Sanap
ITL 49-15 1 Judgment
IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
NAGPUR BENCH, NAGPUR.
INCOME TAX APPEAL NO. 49/2015
M/s Jamnalal Sons Private Limited,
Bacchraj Bhawan, Gandhi Chowk, Wardha. APPELLANT
.....VERSUS.....
Deputy Commissioner of Income Tax-
Range Nagpur (MS). RESPONDENT
Shri Rachit and Sanjay C. Thaker, counsel for the appellant.
Shri S.N. Bhattad with Shri A.J. Bhoot, counsel for the respondent.
CORAM : A. S. CHANDURKAR AND G.A. SANAP, JJ.
DATE : 23RD NOVEMBER, 2021.
ORAL JUDGMENT (PER : A.S. CHANDURKAR, J.)
This appeal was admitted on the following substantial
question of law:
"Whether on the facts and on the circumstances of
the case could it be said that there was a 'transfer' of capital
asset by the appellant resulting in capital gains of
Rs.29,43,710/- which could be subjected to capital gains tax in
the hands of the appellant for the assessment year 1982-83 ?"
2. While admitting the appeal it was noticed that a reference
application under Section 256(1) of the Income Tax Act, 1961 was moved
by the appellant for the Assessment Year 1980-81 and it was allowed on
05.09.1991. The said reference proceedings bearing Income Tax
Reference No.225 of 1999 were pending at the Principal Seat and hence
this appeal involving the same question for the subsequent assessment
year 1982-83 was admitted.
ITL 49-15 2 Judgment
3. On 26.02.2021, the learned counsel for the appellant placed
on record the judgment in Income Tax Reference No.225 of 1999 that
was decided on 27.09.2016. According to the learned counsel for the
appellant with the adjudication of the said reference proceedings the
substantial question of law as framed would have to be answered
accordingly. Time was granted to the learned counsel for the Revenue to
examine this position.
4. Today, the learned counsel for the parties agree that the
substantial question of law framed in this appeal could be answered in
accordance with the reference that was decided on 27.09.2016.
In the aforesaid reference, the following substantial question
of law fell for adjudication:-
"Whether on the facts and in the circumstances of
the case, it could be said that there was a transfer of capital
assets by the applicant company resulting in capital gains of
Rs.1,19,26,177/- which could be subjected to capital gains tax in
the hands of the applicant for the Assessment Year 1980-81 ?"
The Division Bench while answering the aforesaid question held in
paragraph 17 as under:-
"17. Accordingly, we answer the question partly in the
affirmative to the extent the Tribunal held that there was a
transfer of capital asset when the applicant assessee made its
ITL 49-15 3 Judgment
capital contribution in the form of land, shares and securities to
the partnership firm M/s Bajaj Trading Company. However,
other parts of the question namely that the transfer of capital
assets resulted in capital gains, which can be subjected to capital
gain tax in the subject assessment year, is answered in the
negative, i.e. in favour of the applicant assessee and against the
Revenue."
5. It is submitted that in the aforesaid reference, the capital
contribution was in the form of land, shares and securities while in the
present case the capital contribution is in the form of shares alone for an
amount of Rs.29,43,710/-. Having considered the adjudication in Income
Tax Reference No.225 of 1999, the substantial question of law as framed
in this appeal is answered by holding that though there was transfer of
capital assets by the appellant which resulted in capital gain of
Rs.29,43,710/-, the aforesaid amount cannot be subjected to capital gains
tax in the hands of the appellant for the Assessment Year 1982-83.
6. In the light of aforesaid, Income Tax Appeal No.49 of 2015 is
partly allowed in aforesaid terms. No costs.
(G.A. SANAP, J.) (A.S. CHANDURKAR, J.)
APTE
Signed By: Digitally signed
byROHIT DATTATRAYA
APTE
Signing Date:25.11.2021 17:34
