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2015 (11) TMI 1367 - AT - Income TaxTaxability of the gain on the transfer of sweat equity shares allotted to the assessee - Revenue seeks to bring the entire gain to tax as short-term capital gain, the assessee concedes it to be income by way of capital gains, albeit long term in nature and, accordingly, exempt u/s.10(38) of the Act. The Revenue’s alternate claims are of the income being assessable as speculation income u/s. 43(5) or even as income from other sources u/s. 56 - Held that:- In essence and substance though the co-ordinate Bench in the assessee’s own case for A.Y. 1998-999 express the same opinion, i.e., that the rights to the assessee, undoubtedly a capital asset, vests on the exercise of the option/s by the assessee, and not at any time earlier, who, at best, could be considered as having held the shares for a single day. In fact, it states this in the alternative, observing that the assessee did not become the owner of the shares at any point of time. This is also precisely what the A.O. states in the alternative (as did the assessing authority in that case). The shares were not intended to be held in-as-much as the payment of cost, a precondition for their acquisition, could not be made. The assessee’s account was accordingly settled, for all intents and purposes, otherwise than through delivery, yielding speculative gain, assessable u/s. 43(5), and which could itself fall under any head of income, including ‘capital gains’. Thus we confirm the assessment of income on the sale of shares, as short-term capital gain or, in the alternative, as income from other sources, not liable for exemption u/s.10(38) or s. 54EC of the Act. We decide accordingly. - Decided against assessee.
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