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2021 (9) TMI 866 - HC - Income TaxLong term capital asset as per Section 2(42A) - period of holding - Whether Tribunal was right in holding that the shares/debentures not listed in the recognized stock exchange could be treated as a long term capital asset as per Section 2(42A)? - HELD THAT:- The expression listed in a recognized stock exchange in India is only used for category of 'any other security' and not for the category of 'share held in a company'. Further after taking into consideration that the condition for the period of holding was curtailed from 36 months to 12 months by the Finance Act, 1987, it was only for 'share held in a company' - when the amendment by the Finance Act 1994 was brought in the statute so far as the category 'shares held in a company' was concerned, the same was not disturbed, albeit, new category was included like 'any other security listed in recognized stock exchange in India'. ITAT took note of the Memorandum explaining the provision in the Finance Bill and observed that the Memorandum clearly makes a distinction that there are many financial instruments other than the company shares through which the investor are entering capital market and in order to provide such units and all securities traded in the recognized stock exchange, a level playing field with the company's share is proposed to be amended and thus, the said Memorandum clearly makes a distinction between the company shares and other than company shares.The above decision of the ITAT has laid down the correct legal principle which we have discussed in the preceding paragraphs. On a search made, we find that the Revenue has not challenged the order of the ITAT before the Court, but it is the assessee, who has challenged it before the High Court of Delhi and obviously not against the above finding, which was rendered in favour of the assessee. The above Circular issued by the CBDT will clearly indicate that all shares whether listed or unlisted have enjoyed the benefit of shorter period of holding and even any investment in shares of private limited companies enjoyed long-term capital gains on its transfer after twelve months. - Decided against revenue.
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