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2022 (7) TMI 1289 - AT - Income TaxCapital Gain - computation of cost of acquisition - bonus debentures or not - re-investment of dividend amount - treating the cost of acquisition of the bonus debentures received in the nature of ‘dividend’ on which dividend Distribution Tax had been discharged as ‘Nil’ while computing the capital gains arising on the sale of these debentures - HELD THAT:- We have noticed that the assessee had made specific submissions explaining the cost of acquisition of the debentures of BDEL but none of the authorities below has dealt with these contentions by way of a speaking order. These contentions have been simply brushed aside and dealt with in a summary manner. An amount was indeed received on behalf of the assessee and this amount has been reinvested in the debentures. The debentures were not ‘bonus’ debentures and the nomenclature given by the AO is thus incorrect. The taxes were duly paid on the deemed dividend in question, and it did constitute income of the assessee, even though received by a merchant banker on behalf of the assesse. The scheme under which the amount is received by the merchant banker, on behalf of the shareholders-including the assessee, and reinvested on behalf of these shareholders, is duly approved by the Hon’ble High Court, vide order dated 19th September 2014. The fact of, and bonafides of, the transaction cannot thus be disputed. The amount of Rs. 13,85,580/- so reinvested, out of dividend, was the consideration paid for debentures. In the light of these discussions, as also bearing in mind entirety of the case, we uphold the plea of the assessee that the Assessing Officer erred in declines the claim of the assessee with respect to cost of acquisition in respect of these debentures. The assessee, therefore, must get the relief accordingly. We order so.
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