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| The Tax Publishers2020 TaxPub(DT) 3874 (Del-Trib) INCOME TAX ACT, 1961
Section 45
Assessee did not have any antecedent title of any family property because whatever shares/asset assessee has possessed of as owner were sold subject to consideration because assessee had acquired shares of two companies by way of gift from her father and sons. Thus, share were not family property which could have been divided among family members and accordingly there was transfer within meaning of section 2(47) and AO rightly taxed capital gain on shares.
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Capital gains - Chargeability - No family settlement behind transfer of shares as pleaded by assessee -
AO made addition on account of long term capital gain earned on shares. Assessee claimed that amount received on re-alignment of shareholding pursuant to family settlement arrangement was not liable to capital gains tax under section 45. AO rejected this. Held: Assessee did not produce any evidence of prior, present or likelihood of any future family dispute on record to justify execution of Memorandum of Family Settlement. The clauses of Memorandum of Family Settlement clearly established that it was a simple transaction of sale and purchase of shares, subject to consideration received by assessee from one 'G' described as purchaser of shares and assessee as seller in the Memorandum of Family Settlement which could never be regarded as Family Settlement Deed. The assessee did not have any antecedent, title of any family property because whatever shares/asset assessee has possessed as owner were sold subject to consideration because assessee had acquired shares of two Companies by way of gift from her father and sons. Thus, share were not family property which could have been divided among family members and accordingly there was transfer within meaning of section 2(47) and AO rightly taxed LTCG on sale of shares.
REFERRED :
FAVOUR : Against the assesse.
A.Y. : 2009-2010
IN THE ITAT, DELHI 'G' BENCHES
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