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2014 (8) TMI 461 - HC - Income TaxBenefit of section 54E – Transfer of bonus shares - Whether the sale of the bonus shares ought to be taxed as short term gains or as long term gains - The entire sale proceeds were invested in the eligible assets - President held that the transaction had resulted in the transfer of shares, and transfer of certain interest was only a consequence and incidence of the transfer of the shares - the sale of bonus shares resulted in short term capital gain – Relying upon Manecklal Premchand (Deceased) v/s Commissioner of Income Tax [1989 (9) TMI 15 - BOMBAY High Court] - there was a failure on the part of the Assessee to disclose fully and truly all material facts necessary for the assessment in the original returns filed for the AY 1978-1979, and re-assessment was justified in law - the bonus shares issued by a company are acquired by a shareholder when they are issued, and they must be taken to be held by the shareholder from the date of their issue, and not from the date when the original shares in respect of which they are issued, were acquired by the shareholder – Decided in favour of revenue.
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