Pramod Kumar, Accountant Member - The only grievance raised in this revenue’s appeal is as follows :

"deleting the addition of Rs. 1,86,95,362 made on account of Capital Gain arising out of the transfer of 1,05,000 shares of M/s. Morarjee Mills to M/s. Piramal Finance & Investments Pvt. Ltd., without considering the circumstances which indicate that the entire share capital of the assessee company is not held by M/s. Piramal Finance & Investment Pvt. Ltd."

2. The short issue that we are really required to decide, in order to adjudicate on the abovementioned ground of appeal is whether in order to avail exemption under section 47(v) of the Income-tax Act, 1961, entire share capital of a subsidiary company is required to be held only in the name of the holding company, or whether beneficial ownership of the entire share capital would suffice. Learned representatives agree on this proposition.

3. The controversy arises in this background. During the relevant previous year, the assessee company transferred 1,05,000 shares of Morarjee Mills to M/s. Piramal Finance & Investments Pvt. Ltd. (PFIPL, in short). The assessee’s contention was that since PFIPL is 100% subsidiary of the assess