INCOME TAX ACT, 1961

Section 2(14)

Capital gains - Capital asset - Whether loan given to subsidiary in India, by foreign company constitutes capital asset -

Issue arose under consideration as to whether on the facts and in the circumstance of the case, Tribunal was justified in law in holding that loan given to its subsidiary in India, by foreign company constitutes capital asset within the meaning of section 2(14). Held: Section 2(14) has defined the word 'capital asset' very widely to mean property of any kind. Tribunal had considered the meaning of word 'property' as given in context of the definition of asset in Wealth Tax Act to hold 'property' to include the every interest which a person can enjoy. Revenue was able to point out any reasons to understand meaning of the word 'property' as given in section 2(14) differently from the meaning given to it under section 2(e) of the Wealth Tax Act, 1957 Revenue was not able to point out why the loan given to subsidiary would not, in the present facts, be covered by the meaning of 'capital asset' as given under section 2(14). Thus, question framed did not give rise to any substantial question of law.

REFERRED : CIT v. Lakshmindra Thirtha Swamiar of Shirur Mutt (1954) SCR 1005, Bafna Charitable Trust v. CIT (1998) 230 ITR 864 (Bom) : 1998 TaxPub(DT) 0843 (Bom-HC), CWT v. Vidur V. Patel (1995) 215 ITR 30 (Bom) : 1995 TaxPub(DT) 0841 (Bom-HC) and CIT-III v. Minor Bababhai Alias Lavkumar Kantilal (1981) 128 ITR 1 (Guj) : 1981 TaxPub(DT) 0736 (Guj-HC)

FAVOUR : In assessee's favour.

A.Y. :

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