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2019 (5) TMI 299 - AT - Income TaxAcquisition of BSE shares - LTCG OR business income - holding period of capital asset being equity shares allotted in pursuance to demutualisation or corporatisation of a recognised stock exchange in hand - period of holding of asset - Calculation of Indexation benefit – cost of acquisition of 'BSE card' - HELD THAT:- As per the section 2(42A)(ha) supra, for determining the holding period of capital asset being equity shares allotted in pursuance to demutualisation of a recognised stock exchange in hand, the period for which the assessee was a member of the recognised stock exchange prior to such demutualisation shall also be included. Hence, the holding period of the asset is to be calculated from the acquisition of date of ‘BSE card’ and not from the date of conversion of ‘BSE card’ into equity shares. As per the section 55(2)(ab) of the Act, the cost of acquisition in relation to equity shares allotted to a shareholder under a scheme of demutualisation shall be the cost of acquisition of his original membership of the exchange. So from the express provisions, it is clear that the cost of acquisition of ‘BSE card’ shall be the cost of acquisition of BSE shares and the shares are deemed to be acquired on the date of acquisition of ‘BSE card’ and not from the date of their conversion. Hence, the date of holding/acquisition of an asset being equity shares allotted pursuant to demutualisation or corporatisation of a recognised stock exchange will be the date of acquisition of original ‘BSE card’ and we note that CIT(A) have given relief to assessee by following the decision in M/s. Parag Parikh Financial Advisory Services Ltd. No other decision was cited before us by Revenue, to persuade us to to take a different view. Therefore, respectfully following the decision of M/s. Parag Parikh Financial Advisory Services Ltd. [2014 (2) TMI 686 - ITAT MUMBAI] the lis is decided in favour of the assessee.
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