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2016 (4) TMI 386 - AT - Income TaxEntitlement for benefit of indexation - capital gain computation - Held that:- The assessee company being a non-resident is not covered by the first proviso to Sec. 48, however, it is entitled for benefit of indexation since the shares were purchased in Indian currency. The first proviso to Sec. 48 ensures that a non-resident, who utilizes his foreign currency, is taxed after taking into consideration the fluctuation in the exchange rate. The Indian rupee, which has in the past appreciated against various currency, long term capital gains payable can increase. Therefore, the NRI assessee who had purchased shares in Indian currency would be entitled to benefit of second proviso to Sec. 48 on sale of equity shares in question. No merit in the action of the lower authorities declining the benefit of second proviso to Sec. 48. AO is accordingly directed to re-compute the capital gains.
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