ITAT explains Tax on renouncement of Rights Shares In Favour of Assesse

Jigar Jashwantlal Shah Vs ACIT (ITAT Ahmedabad) Now, we shall deal with the issue of whether section 56(2)(vii)(c) of the Act can be invoked in respect of additional 82,200 shares received by the assessee since the assessee’s wife and father did not exercise the rights issue and renounced the right in favour of the assessee. It is a well settled principle of law that what cannot be done directly cannot be done indirectly as well. Had the wife and father of the assessee directly transferred their rights shareholding in favour of the assessee, provisions of 56(2)(vii)(c) of the Act could not h...