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2014 (9) TMI 651 - AT - Income TaxComputation of capital gain - Clim of deduction of expenditure from sale / Transfer of shares offloaded in public issue u/s 48(1) – Held that:- Disallowance of the claim of expenditure in computation of capital gain which was on account of expenditure incurred in connection with the transfer of capital asset resulting into long term capital gain - the computation of the income as well as the expenditure were submitted before the AO at the time of original assessment proceedings - While completing the assessment under section 143(3), the AO has not made any computation in the assessment order - in the proceedings u/s 154, he has accepted the computation as shown by the assessee - the assessee had offered sale of shares to the public which was part of the entire lot of shares offered to the public - The IL&FS has incurred the expenditure for the said IPO i.e., the public offer for the entire shares including that of the assessee - the proportionate expenditure which has been paid by the assessee to the IL&FS was assessee’s liability and directly relates to sale of shares i.e., transfer of capital asset - the finding recorded by the CIT(A) after verifying the entire records is factually and legally correct and there is no reason to deviate from findings - allowing the claim of deduction of an expenditure u/s 48 by the CIT(A) in the computation of long term capital gain is upheld. Rate of taxability of LTCG on shares allotted – 10% or 20% - Held that:- The long term capital gain was in respect of listed securities and, therefore, the rate of tax should be 10% and not 20% as per section 112 because for a public issue, the shares have to be listed at the stock exchange and then only they are allotted to the public in the ratio approved by the stock exchange - It is after listing the public receives the shares and is also entitled to sell the shares in the stock exchange – the order of the CIT(A) is upheld – Decided against revenue.
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