Law:

Section:

Section 47 of the Income-tax Act, 1961 - Capital Gains - Transactions not regarded as transfer - Assessment year 1962-63 - Assessee sold certain shares for a price less than break up value of those shares on basis of balance sheet - Assessee contended that under section 47(iii), a gift was not regarded as transfer of capital asset and was not assessable to capital gains and transaction in question was a deemed gift within meaning of definition of Gift Tax Act, 1958 - ITO rejected assessee's contention and treated difference in value of those shares on basis of balance sheet of company and price charged as capital gains - Tribunal, however, held that amount in question was not liable to capital gains - Whether where one transaction is made subject to different statutes, though cognate in matter, concept of double taxation has no application - Held, yes - Whether expression given in clause(iii) of section 47 is not only to exclude gift as contemplated under clause (a) of section 4 of Gift Tax Act, 1958, but is meant to cover a transaction as understood generally and in light of Transfer of Property Act, 1882 - Held, yes - Whether in view of aforesaid legal position, it could be concluded that amount in question was liable to tax under head 'capital gains even though it had also been assessed under Gift Tax Act, 1958 - Held, yes FACTS During relevant assessment year, the assessee sold certain shares for Rs. 11,500. The break-up value of those shares, on the basis of the balance-sheet, would have been Rs. 50,209 on the date of the transfer. The ITO was, therefore, of the opinion that the provisions of section 52(1) were applicable. It was contended by the assessee that under section 47(iii), a gift was not regarded as transfer of a capital asset and was not assessable to capital gains and the transaction was a deemed gift within the meaning of the definition of the Gift Tax Act, 1958. The ITO did not accept said contention. He, therefore, treated the difference in the value of those shares on the basis of the balance-sheet of the company and the price charged as capital gains. On second appeal the Tribunal held that the amount in question was not liable to capital…

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