NARENDRANATH P Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) ON hearing counsel for both the parties, we are of the view that an arguable question of law does arise for consideration of the High Court. The Income-tax Appellate Tribunal refused to refer the question on the ground that the conclusion that the transaction involving the sale of shares by the Hindu undivided family to its karta was not valid and made only with a view to reduce the tax burden further was a question of fact and inference was drawn on the basis of the consideration of relevant facts. While disposing of the appeal, the Tribunal having regard to certain circumstances such as the receipt of consideration being deferred and non-charging of interest held that :

(2.) LEARNED counsel for the petitioner submits that even on the findings recorded by the Tribunal, at best, it would be a tax planning measure and if it is so, it is wrong to describe it as a colourable device and is liable to be ignored. It is also pointed out that the dividend income received by the individual for the transfer was being credited to the Hindu undivided family and it gives an indication of the transaction having been given effect to. It is further pointed that there is no finding to the effect that the transaction was sham or not acted upon.

(3.) THE income-tax case is accordingly allowed. No costs.