10/ at which the shares were allotted was sought to be brought to tax under the said section.
In that case, the facts were as follows.
Answer to Question No.
Appellant was a shareholder of S.R.C.M. Ltd Appellant was an assessee.
However, according to the CIT A , gift tax proceedings had to be initiated by the Department number against the appellant companypany but it ought to have initiated gift tax proceedings against the existing shareholders who had renounced their rights.
Aggrieved by the decision of the O., the appellant carried the matter in appeal to CIT A .
1 On 29.1.1986 the appellant companypany, on the other shareholders number exercising the option given to them to take up the right shares issued by the appellant, allotted them to the seven investment companypanies, who were the shareholders in the appellants companypany.
It was held that the entire exercise undertaken by the appellant was to evade payment of wealth tax by the individual shareholders of the appellant company.
Twenty shareholders did number subscribe to the rights issue and companysequently the appellant company allotted them to the remaining existing shareholders.
H. KAPADIA, J. Leave granted.
This civil appeal filed by the assessee seeks to challenge judgment and order passed by the Karnataka High Court dated 1.8.2007 in Gift Tax Appeal No.
Appellant was entitled to apply for 800 equity shares in a fresh issue of capital by the companypany with a option to renounce the same as provided for in Section 81 of the Companies Act, 1956.
This finding was given by the CIT A on the ground that right shares were allotted because 20 existing shareholders out of 27 shareholders of the companypany did number subscribe for the rights.
In this civil appeal we are companycerned with the assessment year 1987 88.
