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2012 (12) TMI 839 - AT - Income TaxGold deposit scheme, 1999 – Redemption of Gold Bond - Capital Gain – Long term capital gain or short term of capital gain – Period of holding – Cost of acquition – Board's circular No. 415 - Assessee compute capital gain from cost and date of acquisition of the gold i.e. the date on which the gold has been received to assessee on the redemption of the gold bond – AO computes capital gain from day and cost on which sum it was deposited with gold bond scheme – Sale of gold acquired on the redemption of gold bond - Assessee deposited gold on 22.11.1999 - Redemption certificate of gold was issued on 22.11.2006 - Sold gold on 07.11.2007 Period of holding - Held that:- In the Board's circular No. 415, it was decided that for the purpose of computation of capital gains, the cost of acquisition of the gold would be the market value of the bonds on the date of redemption. On the date of maturity, i.e., 22.11.2006, the certificates of gold were redeemed, therefore, 22.11.2006 should be considered as the date of acquisition of the gold for the purpose of computation of capital gains. Cost of acquition – Held that:- The cost of acquisition of the gold is to be taken, i.e., value of gold on the date of redemption of certificates when a new capital asset has come into existence in possession of the assessee. Earlier, the gold in possession of the assessee had lost its identity when the same was converted into bonds. The Bonds cannot be treated as gold nor the gold can be treated as bonds. Therefore, the cost and the date of acquisition of the gold for the purpose of computing the capital gains be taken as the date on which the gold has been received by assessee on redemption of the gold bonds, i.e., 22.11.2006. In favour of assessee
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