Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (5) TMI 316 - AT - Income TaxWithhodlign Tax / TDS u/s 195 on LTCG Benefit of proviso to section 112 of the Act Applicability on Non-resident assessee or not - Rate of deduction 10%+ Surcharge OR 20% + Surcharge Held that:- Following Cairn UK Holdings Limited Versus Director of Income-Tax [2013 (10) TMI 430 - DELHI HIGH COURT] - The proviso is applicable to listed securities or units or zero coupon bonds - Long-term capital gains tax is not payable on listed securities sold through stock exchanges as securities transaction tax is payable - The first proviso to section 48 is applicable on sale of shares or debentures in an Indian company, whether or not the shares or debentures are listed - the proviso to section 112(1) is more restrictive and will not necessarily apply in all cases covered by the first proviso to section 48 - the proviso to section 112(1) is not applicable to debentures - the proviso to section 112(1) is applicable to units and zero coupon bonds, which are not covered by the first proviso to section 48 of the Act - The second proviso to section 48 is not applicable on transfer of a long-term capital asset being bond, debenture other than the capital index bond - Zero coupon bonds are specifically made eligible for the benefit under the proviso to section 112(1). The purpose and object behind the proviso to section 112(1) itself is somewhat debatable, except that the legislative intention was to tax long-term capital gains on listed shares, bonds and units at 10 per cent., without the benefit of indexation under the second proviso to section 48 of the Act - Legislative policy and object is nothing more, and it is impermissible to read into the provision an affirmative legislative intention on assumption and guess work and this would be beyond the acceptable principles of interpretation - the assessee is entitled to benefit of lower rate of tax @ 10% while computing the tax under the head long term capital gain Decided against Revenue.
|