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Section 2(47), read with Section 45 of the Income-tax Act, 1961 [as it stood prior to 1-4-1985] - Transfer - Whether contribution of joint stock by assessee as capital to another firm amounts to transfer giving rise to capital gains - Held, yes FACTS In the relevant assessment year, the Tribunal held that the contribution of joint stock made by the assessee as capital to another firm did not, within the meaning of section 2(47), tantamount to transfer in relation to the said joint stock and that, therefore, there arose no profits and gains computable under the head 'Capital gains'. On reference: HELD In view of the Gujarat High Court's Division Bench decision in CIT v. Kartikey V. Sarabhai [1981] 131 ITR 42 ] this decision has since been affirmed by the Supreme Court in Kartikey V. Sarabhai v.CIT [1985] 23 Taxman 14 W] on the question of applicability of section 2(47)], the order of the Tribunal was not justified. EDITOR'S NOTE The assessee and the revenue arrived at a consensus, namely, (i ) to abide by the decision of the Supreme Court in appeal preferred by Kartikey V. Sarabhai's case (supra) from the decision of the Gujarat High Court in Kartikey V. Sarabhai's case (supra), (ii) not to object to the Tribunal adjusting its order under section 260(1) in the light of that Supreme Court's decision, and (iii) the revenue should not enforce the demand till the Tribunal made adjustment according to that Supreme Court decision. The assessee's oral application for a certificate of fitness for appeal to the Supreme Court, which would have been granted, however, was dismissed in view of the consensus. CASE REVIEW CIT v. Kartikey v. Sarabhai [1981] 131 ITR 42 (Guj.) on appeal reversed in part [1985] 156 ITR 509 (SC) followed and relied upon. CASES REFERRED TO CIT v. Kartikey V. Sarabhai [1981] 131 ITR 42 (Guj.) and Kartikey V. Sarabhai v. CIT [1985] 23 Taxman 14W (SC). G.N. Shah for the Applicant. K.H. Kaji for the Respondent. JUDGMENT Mehta, J. - At the instance of the Commissioner, the following question is referred to us for our opinion : "Whether, on the facts and in the circumstances of the case, the…

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