TMI Blog2003 (9) TMI 706X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer by Rs. 73,593 by treating the capital gain on sale of units as short-term capital gain instead of as long-term capital gain as returned by your appellant. The assessment in this case was completed by the Assessing Officer under section 143(3) on January 31, 1994, determining the assessee's total income at Rs. 5,01,740. On the perusal of records, it was noted by the Commissioner of Income-tax that the assessee had disclosed long-term capital gains of Rs. 42,395 on the sale of units of the UTI and in the assessment completed under section 143(3), the long-term capital gains offered by the assessee were accepted. The Commissioner of Income-tax found on the perusal of records that capital assets being units of the UTI, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 1995-96. Though the assessment year under appeal is 1991-92, yet the amendment is only clarificatory in nature and is applicable to the past years with equal force. (v) The decision of the Assessing Officer in treating the units of the UTI as shares in a company is an entirely possible legal view and hence in view of the various judicial pronouncements, the Commissioner of Income-tax had no jurisdiction to revise the assessment order. The learned Commissioner of Income-tax rejected the contentions of the assessee by observing as under : Even on merit, taking of unit of the Unit Trust of India as share in the relevant assessment year, i.e., 1991-92 is not correct at all. Nowhere in the Income-tax Act, the units of the Unit Trust of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT [2000] 243 ITR 83 (SC) ; (iv) CIT v. A. K. Timber Traders [1989] 177 ITR 486 (P H) ; (v) Jamnadas T. Mehta v. ITO [2002] 257 ITR (A.T.) 90 (Pune) ; (vi) Venkatakrishna Rice Co. v. CIT [1987] 163 ITR 129 (Mad) ; (vii) Davies Jenkins and Co. Ltd. v. Davies (Inspector of Taxes) [1969] 72 ITR 444 (HL) ; and (viii) ITO v. Mani Ram [1969] 72 ITR 203 (SC). Learned counsel by referring to the decision of the Supreme Court in the case of Apollo Tyres Ltd. v. CIT [2002] 255 ITR 273 contended that the issue that units of the UTI have to be treated as shares within the meaning of the provisions of section 32(3) of the UTI Act stands covered against the assessee. But learned counsel pointed out that the judgment of the Supreme Court ([2002] 255 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Representative contended that if such units were held for a period of less than 36 months, the gains derived by the assessee will only be short-term capital gains. The learned Departmental Representative contended that the assessee had claimed the gains as long-term capital gains and the Assessing Officer in the assessment order accepted them as such and hence the order of the Assessing Officer was erroneous in so far as it was prejudicial to the interests of the Revenue. Hence, according to the learned Departmental Representative, the provisions of section 263 were rightly invoked by the learned Commissioner of Income-tax. The learned Departmental Representative further contended that no two views are possible and the only one valid view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be different in view of the amendment to the proviso to section 2(42A). With effect from the assessment year 1995-96 onwards the units of the UTI have been equated with shares held in a company and they have to be held for more than 12 months only to enable them to come within the category of long-term capital asset. As the Assessing Officer had wrongly accepted the capital gains as long-term capital gains, we are of the opinion that the order of the Assessing Officer was erroneous in so far as it was prejudicial to the interests of the Revenue and hence the learned Commissioner of Income-tax had rightly invoked the provisions of section 263. We are inclined to accept the contention of the learned Departmental Representative that no two vi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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