TMI Blog2012 (9) TMI 444X X X X Extracts X X X X X X X X Extracts X X X X ..... strued to be a part of the cost of acquisition of convertible Part A of the PCD retained by the appellant and thus the claim of loss of the assessee in the matter of sale of Part B of the PCD in the self-same rights issue was permissible as short term capital loss. Set aside the impugned order passed by the learned tribunal to the extent it confirmed the disallowance of Rs. 28,17,945/- as short term capital loss as claimed by the assessee and allowed by CIT (Appeals) - in favour of assessee. - I.T.A. No. 259 of 2003 - - - Dated:- 30-8-2012 - K J Sengupta And Joymalya Bagchi, JJ. For Appellant : Mr. J.P. Khaitan , Sr. Adv , Mr. Sourav Bagaria, Adv For Respondent : Smita Das De, Adv JUDGEMENT Per : Joymalya Bagchi : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 96 set aside the disallowance made by the Assessing Officer, inter alia, relying on the decision of the learned Tribunal, Calcutta in ITA No. 2649 (Cal) of 1996 wherein in respect of the self-same rights issue the learned tribunal had arrived at the conclusion that the disallowance as claimed by the assessee as short term capital loss was permissible. This order of CIT (Appeals) was challenged by the revenue before the learned Tribunal in I.T.A. No. 117 (Cal) 1998 wherein the learned tribunal allowed the appeal of the revenue, inter alia, holding that the judgement and order of the learned tribunal in the case of Kamal Trading Co. Vs. Deputy Commissioner of Income Tax in ITA No. 977 (Cal) of 1998 applied to the facts of the instant case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tees thereby requiring the said allotees not to make any further payment on allotment and to surrender Part B portion of their PCDs in favour of Citi Bank along with a signed blank transfer deed in favour of the Citi Bank at the time of allotment by BILT. Citi Bank on its turn instead of making the payment of the consideration sum of Rs. 235/- to the applicant i.e. the appellant assessee in the instant case paid the same to BILT on behalf of the appellant assessee in fulfillment of their letters of obligation in respect of the allotment. In such manner, the appellant assessee retained the convertible Part A of the PCD valued at Rs. 100/- each. In terms of its agreement with the Citi Bank, non-convertible Part B of the PCD having face value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... self-same rights issue and had not been appealed against by the department. He further submitted that the tribunal erred in law in relying upon the decision of the learned tribunal in the case of Kamal Trading Co. Vs. Deputy Commissioner of Income Tax in I.T.A. No. 977 (Cal) of 1998 wherein the disallowance for short term capital loss had arisen out of a different rights issue wherein the terms and conditions were entirely different from the present one. Mr. Khaitan submitted that in Kamal Trading Co. s Case the value of NCD along with detachable warrant were not priced separately and the purchase constituted a single transaction. Furthermore, the warrants were attached to the NCD itself. These facts clearly rendered the transaction dif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we should also be understood as approving the way the tribunal has dealt with the matter in paragraph 8 and the beginning of paragraph 9. In short the disposing of the Part B non-convertible debenture resulting in capital loss cannot take on a different aspect because and only because the convertible portion being Part A was held on to by the assessee. A separate treatment given by the assessee to its two separate types of property is not illegal and, therefore, it cannot affect the assessee s interest in any adverse manner whether for tax purposes or otherwise. We are also in agreement with the tribunal that the introduction of Citi Bank by the assessee in the matter of disposal of the Khokha s (a commercial word used by the business c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Karam Chand Thapar and Borthers (Coal Sales) Ltd. is not applicable to the facts of the assessee s case, and that of Kamal Trading Co. in I.T.A. No. 977 (Cal) of 1998 is applicable. It is an admitted fact that the decision of the tribunal in Karam Chand Thapar and Borthers (Coal Sales) Ltd. is in respect of self-same rights issue whereas the decision in Kamal Trading Co. was delivered in respect of a different rights issue wherein the terms and conditions were completely different from that in the present rights issue. In fact, the tribunal in its decision in Kamal Trading Co. distinguished the terms of the rights issue in that case from the rights issue in Karam Chand Thapar and Brothers (Coal Sales) Ltd. (Supra) which is sa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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