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| The Tax Publishers2020 TaxPub(DT) 0484 (Kol-Trib) : (2020) 181 ITD 0284 : (2020) 207 TTJ 0038 INCOME TAX ACT, 1961
Section 56(2)(vii)(c)
Where assessee had been allotted certain shares as consideration for property transfer, AO was not justified in invoking section 56(2)(vii)(c) as subject matter was transfer was immovable property and further income was to be computed under the head capital gains.
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Income from other sources - Applicability of section 56(2)(vii)(c) - Receipt of shares against transfer of property -
Assessee had been allotted certain shares as consideration for property transfer. On 27-3-2012. AO invoked section 56(2)(vii)(c) and made addition while computing capital gain.Held: While computing income under the head 'capital gains', provisions of section 56(2)(vii)(c), cannot be invoked. The sub-section is not applicable when subject matter of transfer is 'immovable property', as in assessee case. Moreover when exchange was on 27-3-2012 and when shares were allotted on 27-3-2012, AO sought to value the already allotted shares on 31-3-2012 i.e., after allotment of 40,000 equity shares at a premium of Rs. 400 per share which gave the company premium of Rs. 1,56,00,000., which was not permissible. Accordingly, addition was deleted.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2012-13
INCOME TAX ACT, 1961
Section 14A Rule 8D
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