TMI Blog2013 (11) TMI 567X X X X Extracts X X X X X X X X Extracts X X X X ..... 8-2013 - Shri R. P. Tolani, JM And Shri J. Sudhakar Reddy, AM,JJ. For the Appellant : Sh. Salil Agarwal, Adv. Sh. Shailesh Gupta, C.A For the Respondent :.Sh. Satpal Singh, Sr. D.R ORDER Per J. Sudhakar Reddy, AM. This is an appeal filed by the Assessee directed against the order of the Ld.CIT(A)-XXX, New Delhi dated 05.02.2010 pertaining to the Assessment Year 2007-08. 2. Facts in brief:- Facts as brought out in para 4 of the Ld.Commissioner of Income Tax (Appeals)'s order are extracted for ready reference. "The assessee is an individual having income from salary, income from other soruces and capital gains. The assessee filed his original return of income for Assessment Year 2006-07 on 30.7.06 declaring a total income of Rs.92,98,529.00 thereafter the assessee filed revised return of income on 1-2- 2008 declaring a total income of Rs. 92,94,006.00 along with the income of return, the appellant filed a computation of taxes paid below the income from capital gains. The following note was annexed: "The assessee was granted stock options as per the stock options scheme PLAN 13 of the employer on 11th Feb., 2002 numbering 1313 shares which vested with him on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxable under short term capital gain or long term capital gain. He applied the decision of the jurisdictional Tribunal in the case of ACIT vs. Shri Jaswinder Singh Ahuja in ITA nos. 185 and 186/DEL/2009. Aggrieved the assessee is in appeal before us. 4. The Ld. Counsel for the asasessee Mr.Salil Aggarval submitted that the first issue the assesse disputes is the validity of reopening. The sum and substance of his submissions is that : a. In the reasons recorded, the AO referred to the fact that information was received that the shares were given to the assessee under ESOP through cashless scheme and that this is the basis for reopening and that the assessee has in a note filed along with the return of income, has stated these facts and there is no new information or material which came into the possession of the Assessing Officer, in addition to what the assessee sated in his return of income, to warrant reopening of the assessments. He relied on the judgment of Hon`ble Delhi High Court in the case of CIT Vs. Orient Craft Ltd. (2013) 29 Taxmann.com 392 (Delhi), judgement dated 12 Dec 2012 in ITA no. 555/2012 for the proposition that when there is no whisper in the reasons reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee has shown long term capital gain of Rs. 88,57,512/ - with following note: "the assessee was granted stock options under PLAN 13 and 14, which stood vested with him on 11.02.2002 and 17.12.2002 (i.e. the date of grant of stock option) the said options have been sold on 13.04.2006 and 02.02.2007 respectively. The assessee has earned a gain for an aggregate value of Rs. 88575121- (Rs. 4121177 + 4736335) as per computation sheet enclosed on the sale of the said stock options. A legal opinion had been sought by the employer M/s Seagram on the manner in which the capital gains is to be calculated and as per the said legal opinion, the capital gains has been calculated by adopting the date of grant as the date of acquisition, for the purpose of a computation, hence the gain has been calculated accordingly. It is further clarified that as the stock options had been granted to the assessee on 11.02.2002 and 17.12.2002 and such an asset was sold/transferred only on 13.04.2006 and 02.02.2007 it is apparent that the asset transferred was a long term capital asset which had been held by the assessee when the stock option was granted to him. There is an issue regarding appropriate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer, both strongly deprecated by the Supreme Court in Kelvinator of India Ltd. (supra). The reasons recorded by the Assessing Officer in the present case do confirm our apprehension about the harm that a less strict interpretation of the words "reasons to believe" vis- -vis an intimation issued u/s 143(1)can cause to the tax regime. There is no whisper in the reasons recorded, of any tangible material which came to the possession of the Assessing Officer subsequent to the issue of intimation. It reflects an arbitrary exercise of the power conferred u/s 147 of the Act." 9. Applying the propositions laid down to the facts of the case we hold that the reopening is bad in law. 10. On merits the date of grant of stock options was 11.02.2002 and 17.12.2002 respectively and these stock options were sold by the assessee on 13.04.2006 and 02.02.2007 respectively. The issue is whether the gain in question is a short term capital gain or long term capital gain. The Tribunal in the case of Mr. Purwez Rusi Patel (supra) followed the decision of the Coordinate Bench of the Tribunal in the case of Param Paul Uberoi (supra) and held that the date of acquisition of ESOP is to be taken a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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