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TMI Blog2013 (11) TMI 567X X X X Extracts X X X X X X X X Extracts X X X X ..... me 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 11th Feb. 2006. Of this 500 shares were sold through a cashless scheme as on 23/03/2006. The assessee has earned a gain for an aggr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed a letter objecting to the assumption of jurisdiction under Section 148 and also requested that the reasons recorded for issuance of Section 148 be supplied to him. On 10.11.09 another letter was issued requesting to show cause as why the above mentioned capital gain should not be assessed as short term capital gain." 3. The AO rejected the objections of the assessee on the issue of reopening. He assessed the income earned by the assessee on surrender of stock options under cashless scheme as short term capital gain. Aggrieved the assessee carried the matter in appeal. The First Appellate Authority rejected both the contentions of the assessee i.e., on the issue of reopening as well as on the issue as to whether capital gains earned on s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and as it is an issue of rate of tax that is applicable to the income. c. On merits he submitted that the ESOPs in question vested in the assessee for the first time on 11.02.2002 which was sold on 13.04.2006 and for the second time on ESOP's vested on 17.12.2002 which was sold on 02.02.2007 and as rights in question were held for more than 36 months, and hence the gain in question is a long term capital gain. He relied on the following case laws:- i. Mr. Purwez Rusi Patel vs. JCIT, Delhi Bench of ITAT in ITA no.4936/Del/2010; ii. ACIT vs. Sh. Param Paul Uberoi of Delhi Bench of ITAT in ITA no.4477/Del/2011; iii. Abhiram Seth vs. JCIT Delhi Bench of ITAT in ITA no.2302/Del/2010; iv. ACIT vs. Ambrish Kumar Jhamb, Delhi Bench of ITAT in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich 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 as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital gain. In view of the above, I have reason to believe that the income of the assessee chargeable to tax for A Y 2007-08 has escaped assessment within the meaning of Section 147 of the I T Act, 1961. Issue notice u s 148 of the IT Act." 8.1. A perusal of the reasons recorded demonstrates that the letter dated 14/10/2008 received by the AO from Pernod Recard India Pvt. Ltd does not give any new information or material to the Ld.AO. Whatever information that the assessee disclosed by way of a note, i.e. that he has received ESOP under cashless scheme was stated by way of a letter by Pernod Recard India Pvt. Ltd. Thus the reopening of assessment is made in the absence of tangible material or fresh information. The jurisdictional High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 as the date when the option was given to the assesse. In other words the Tribunal in these decisions has held that the assesse acquired a valuable right on the date of grant and this valuable right, which is capital asset, when sold after 3 years, was liable to be taxed under the head "Long term capital Gain'". The valuable right which is a capital asset is held for more than 36 months by the assessee making it a long term capital asset. The decision in the case of Shri Jaswinder Singh Ahuja (supra) relied upon by the revenue was considered by the Bench in the case of Abhiram Seth (supra). At para 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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