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2015 (2) TMI 70 - HC - Income TaxRedemption of Stock Appreciation Rights - capital gain or perquisite under Sec.17(2)(iii) - short term capital gain or long term capital gain - Held that:- The questions posed for consideration before us reproduced hereinabove and considering the decision of the Hon'ble Supreme Court in the case of Infosys Technologies Ltd. (2008 (1) TMI 17 - SUPREME COURT OF INDIA), the questions, which are raised in the present appeals are required to be answered in favour of the assessee wherein held that the revenue had erred in treating amount being difference in market value of shares on the date of exercise of option and total amount 'paid' by employees consequent upon exercise of the said options as perquisite value as during the lock-in period there was no cash inflow to employees to foresee future market value of shares and the benefit if any which arose on date when option stood exercised was only a notional benefit whose value was unascertainable. In view of the above, the questions raised for consideration in the present appeals are answered in favour of the assessee and against the revenue. The Tribunal was correct in treating the amount received on redemption of Stock Appreciation Rights as capital gain as against treated as perquisite under Sec.17(2)(iii) of the I.T. Act and in treating the amount received on exercising the opinion of Employee's Stock Option Plan (EOSP) as long term capital gains instead of treating the same as short term capital gains. However, the Tribunal was not justified in holding that capital gain arose to the assessee on redemption of Stock Appreciation Rights which were having no cost of acquisition. - Decided in favour of assessee.
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