Wealth Tax Act 1957

This query is : Resolved

shiva prakash (Querist)
Follow

16 May 2009 Sir,

If an person transfers shares to his wife and she sells such shares & buys any Asset which is an asset U/s 2(ea) of wealth tax act, then such asset is taxed in the hands of the wife or in the hands of the husband.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
Follow

16 May 2009 If the shares are transferred for an inadequate consideration or on an agreement to live apart, then the value of the converted asset on the valuation date is to be clubbed in the hands of the husband.

Citation:- CWT Vs.Kishnanlal Bupana 204 ITR 600 (SC).

shiva prakash

shiva prakash (Querist)
Follow

17 May 2009 Thanks for your reply,however on my repeated reading of Section 4 (1)(a), I am under the Impression that, on the date of transfer of asset (ie., Shares) to my wife, the shares are not asset u/s 2(ea), but only after I have transfered the shares to my wife, she has sold the shares and bought the asset which is comming within section 2(ea), and in section 4(1)(a) the words "such asset" has been used. Otherwise to say I have transfered the shares which is not an asset u/s 2(ea) hence the liability to tax does not arise.

Upgrade to CAclubindia Pro. Subscribe Now!