Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2011 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2011 (9) TMI 186 - AT - Income TaxSale of ESOP shares - LTCG or STCG - Date of acquisition - date of allotment - Held that:- the assessee’s claim of taxability of gains on the transfer of such rights under the head “long term capital gains” is justified and deserves to be accepted. - If we accept AO’s stand, then there will be no capital gain; if the date of allotment of share and sale thereof is the same, the price of purchase of shares cannot be the price paid for right which is not held as purchase, which becomes unascertainable. According to AO, the earlier right of allotment does not constitute a purchase of shares and thus leads to a presumptive situation. In that case, as rightly observed by the ITAT in the case of Bomi S. Billimoria (2009 -TMI - 59450 - ITAT BOMBAY), the purchase price will be unascertainable. If we apply the case of Dhurjati Gupta (2009 -TMI - 66827 - ITAT HYDERABAD), then allotment constitutes new right of purchase and the price will be same as the sale consideration. In both situations there will be no taxability. - The right of shares constitute capital assets and the gains should be taxed as “Long Term Capital Gains” as the holding period is more than 3 years. - Decided in favor of assessee.
|