BMA Rule 3(1)(c)

BMA Rule 3(1)(c) — the law in short

What the courts have decided on section BMA Rule 3(1)(c), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Chintan Navnitlal Parikh v PDIT (Inv) ITATHelps taxpayerNo later treatment found
  I declared my interest in a foreign discretionary trust under s.59 and the assessment accepted it. Can the Principal Director now revise that order?
  Not where the point was examined at the assessment stage. The Tribunal set aside a revision under s.23 of the Black Money Act, holding that an order passed after due enquiry and verification is neither erroneous nor prejudicial to the interest of the Revenue within s.23(2) and cannot be called prejudicial under s.23(9). It also records the valuation route for a beneficiary's interest in a foreign trust: the trust's assets are valued as an association of persons under Rule 3(1)(g), with the shares held by the trust valued first under Rule 3(1)(c).
• Vijendra Kedia v DDIT (Inv) ITATHelps taxpayerNo later treatment found
  The officer valued my foreign shareholding under the rule meant for bank accounts. Does that stand, and was I even an 'assessee' under the Act as a not ordinarily resident?
  Neither stands. Rule 3(1)(e) of the Black Money Rules determines the value of a bank account and cannot be applied to shares, which fall under Rule 3(1)(c). Separately, the definition of 'assessee' in s.2(2) as it stood when the s.10(1) notice was issued in February 2018 covered only a resident, and the assessee being not ordinarily resident in the relevant financial year, the notice and the assessment were held to be without jurisdiction and were quashed.
• DCIT v Uday Pratap Singh ITATHelps taxpayerNo later treatment found
  They have taxed me on shares in a struck-off offshore company I paid nothing for. Can there be a charge at all if the shares have no value under the rules?
  No. The Kolkata Bench upheld deletion of an addition of Rs 65,240 on 1,000 shares of a British Virgin Islands company. Rule 3(1)(c) requires unquoted equity shares to be valued at the higher of cost of acquisition and the value worked out from the company's assets and liabilities; the assessee had paid nothing, the company had been struck off and had no balance sheet, so both limbs came to nil and s.3 could not operate, the tax being imposed on the value of the undisclosed asset.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.