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Whether the applicant is required to deduct tax at source on the service fee paid to Intertek Testing Management Limited, UK, at the rate of 10% plus applicable surcharge and cess as per the provisions of section 115A(1)(b)(BB) of the Income-tax Act-AIT-2008-401-AAR Larger Bench of SC Ruling-whether the revenue can be precluded from filing an appeal even though in respect of some other years involving identical dispute no appeal is filed -AIT-2008-403-SC SC Ruling-whether transfer of Banking Undertaking gave rise to taxable capital gains under Section 45 of the 1961 Act-it was not possible to compute capital gains and, therefore, the said amount of Rs. 10.20 cr. was not taxable under Section 45 of Income Tax Act-AIT-2008-400-SC Export duty of 8 per cent notified in place of earlier rate of Rs. 200 per tonne on export of iron ore fines-Customs Tariff Notification No.121 Pan Masala Packing Machines (Capacity Determination And Collection of Duty) Second Amendment Rules, 2008-Central Excise Non-Tariff Notification No.45 SC rules Ethylene and propylene manufactured by the assessee and used in its factory in the further manufacture of the same goods would be entitled to the benefit of exemption contained in notification no.217/86-AIT-2008-398-SC New DEPB Rates on export of all products notified–DGFT PN 102 service tax paid under Section 66A is available as 'input credit' under Cenvat Credit Rules, 2004 provided the said services are used as input services by the manufacturer or producer of final products or a provider of output taxable service-Service Tax Trade Notice No.43/2008 Anti-dumping duty imposed on import of cable ties from China & Taiwan-Customs Tariff Notification No.118 Definitive Anti-dumping duty imposed on import of Phenol from Singapore, South Africa & European Union-Customs Tariff Notification No.114 High-tech products entitled to benefits under High-Tech Products Export Promotion Scheme –DGFT PN 101

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Transfer of exchange card exigible to capital gains tax

AIT News Network

CHENNAI. Special Bench of ITAT vide a ruling dated 14^th September 2006 AIT-2006-197-ITAT has ruled that the transfer of membership card by the assessee is a transfer of capital asset within the meaning of section 2(14) of the Income Tax Act and consequently the consideration of the said transfer is exigible to capital gains tax.

President, ITAT, constituted a Special bench in this case to consider the following issue:

“Whether membership card of madras Stock Exchange could be construed to be a capital asset within the meaning of section 2(14) of the Income-tax Act, 1961; exconsequenti, consideration of the alleged transfer of membership card is exigible to capital gains tax.”

The assessee individual had sold the membership card of Madras Stock Exchange to M/s. ASERA Securities (P) Ltd. for a total consideration of Rs.1,00,00,000/- for which shares were allotted. The AO was of the view that the membership card of MSE constituted a capital asset and hence the gains arising on the transfer of such card constituted capital gains. However, the assessee was of the view that it was not an asset but merely a personal right, a personal permission, which was not capable of being transferred. The AO held it to be a capital asset and accordingly added the entire sale proceeds as capital gain to the total income of the assessee since the cost of acquisition was nil.

T H E R U L I N G: The card is a valuable property which entitles the members to deal in transactions on the floor of the Stock Exchange and without which one cannot transact such business. This right can be disposed of by a member by nomination, though subject to rules and regulations of Stock Exchange and settlement of debts and liabilities of members of the Stock Exchange. The argument of the learned counsel was that exercising the right of nomination is not equivalent to transferring an asset. This argument has been met with by the Ahmedabad Bench of the Tribunal in the case of V.G.Gajjar in para 18 of its order . We are in full agreement with the view expressed therein. In our considered opinion, the judgment of the Supreme Court in the case of stock exchange, Ahmedabad has ceased and has vested with the stock exchange authorities. The said judgment, in our humble opinion, cannot apply to the cases of continuing membership. Accordingly, in the present case, we hold that that the transfer of membership card by the assessee to ASERA Securities Pvt. Ltd. is a transfer of capital asset within the meaning of section 2(14) of the Act and consequently the consideration the said transfer is exigible to capital gains tax.

( Click here for full text of ruling AIT-2006-197-ITAT )