TMI Blog2003 (1) TMI 698X X X X Extracts X X X X X X X X Extracts X X X X ..... of material placed before us and precedents relied upon. 4. The assessee purchased Indira Vikas Patra on the following dates : Date of Purchase Face Value (Rs.) 31-3-1987 75,000 8-5-1987 1,00,000 6-7-1987 1,00,000 Assessee got back the money on the maturity of Indira Vikas Patra. Applying the index cost, assessee claimed long term capital loss. The maturity period was five years. After maturity, assessee took the realization value, which was the purchase value. Assessing Officer held that there was no transfer of the capital asset. As such there was no capital gain/los ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Minor Bababhai [1981] 128 ITR 13 (Guj.), assessee advanced a sum of ₹ 25,000 to a company on a promissory note. Company went into liquidation. Scheme of compromise was arranged. Assessee could realize only ₹ 13,323 from the company. The balance of ₹ 11,617 was claimed by the assessee as capital loss suffered by him during the relevant assessment year. Hon ble Gujarat High Court allowed this loss as capital loss. In the case of Anarkali Sarabhai v. CIT [1997] 224 ITR 4224 (SC) it was held that the difference between sum received by the assessee on redemp- tion of the shares and the sum earlier paid for purchasing was taxable as capital gains. The Court held that when preference shares are redeemed by the company, the sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of treatment of deep discount bonds and strips reported in 254 ITR (statute) 241 and the press note in connection with tax treatment of deep discount bonds and strips reported in 254 ITR (statute) 302. 12. We have considered the text and context of the various precedents relied upon. It is clear that none of the precedents discussed in the court deals with the present situation. We are concerned with the issue that whether Indira Vikas Patra could be construed to be a capital asset. In that context, it is important to ascertain that whether surrender of Indira Vikas Patra on its maturity amounts to relinquishment of right in the asset. De hors transfer, there cannot be capital gain. 13. Adverting to the scheme of Indira Vikas Patra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of money with the Post Office on interest with a peculiar feature that the depositor s name is nowhere recorded and it can be encashed by anyone. That is how the instrument becomes transferable. The context of transferability is akin to that of currency note. Currency note is also freely transferable. It does not bear the name of holder. No documentation is required for effecting the transfer. 15. In order to subject any profit or gain received by or accruing to an assessee to the charge of capital gain, the sine qua non is that the receipt or accrual must have originated in a transfer within the meaning of section 45(1) read with section 2(47). There must, therefore, be a casual nexus between the transfer and the profit or gain receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the word effected in section 45, it can be said that in the case of corporeal property, unless the owner of the capital asset is divested of his rights by the process of extinguishment resorted to and unless there is consideration for such extinguishment, there can be no transfer of the capital asset for the purpose of sections 45 and 48. According to the rule of Noscitur a Sociis, the expression extinguishment of any rights therein would take colour from the associated words and expression will have to be restricted to the sense analogous to them. If the Legislative intended to extend the definition to any extinguishment of right, it would not have included the obvious instances of transfer, viz., sale, exchange, etc. Hence, the expres ..... X X X X Extracts X X X X X X X X Extracts X X X X
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