TMI Blog2016 (6) TMI 523X X X X Extracts X X X X X X X X Extracts X X X X ..... read with first proviso to Section 112(1) of the Act , provided other conditions are fulfilled. The assessee has right to choose to be taxed on long term capital gains arising from the transfer of HSBC MF either @ 20% after claiming the benefit of cost inflation indexation as provided in Section 112(1)(a) of the Act read with second proviso to Section 48 of the Act , to compute indexed cost of acquisition or indexed cost of improvement of the capital asset , or to be chargeable to tax @ 10% without adjusting the cost of acquisition or improvement with cost inflation index as per provisions of Section 112(1)(a) of the Act read with first proviso to Section 112(1) of the Act in the case of long term capital gain arising on transfer of listed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned C.I.T. in her order dated 19th July, 2013 has erred in denying the benefit of indexation on Long Term Capital Gains accruing on sale of mutual fund units of HSBC Fixed Term Series 59. 2. The learned C.I.T. has failed to appreciate that the option of exercising indexed cost and paying tax on long term capital gains @ 20% or not exercising the option of indexed cost and paying tax @ 10% is the prerogative of the assessee and that this right cannot be denied by the revenue authorities. 3. The appellant prays that the benefit of indexation should be allowed while computing Long Term Capital gains. 3. The brief facts of the case are that the assessee is an individual and has declared income from salary in the return of income f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CIT(A), the assessee submitted that benefit of cost inflation indexation should be granted to the assessee and submitted the working as under:- The capital gains working post indexation is as under: Capital gains on redemption of HSBC MF funds Units: Full value of sale consideration 16.07.2009 ₹ 1,44,84,120/- Less indexed cost of acquisition purchase date- 15.07.2008 (12,900,000*632/582) ₹ 1,40,08,247/- Long Term Capital Gains ₹ 4,75,873/- The assessee submitted that ₹ 4,75,873/- be charged to tax as long term capital gains as computed above. The assessee submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iso to Section 112(1) of the Act, the afore-stated benefit of option of paying tax on long term capital gains @20% after indexation or 10% without availing the benefit of indexation has to be granted to the assessee and merely because the gains are not declared in return of income filed with the Revenue, the benefit of choosing option of paying tax at the rate of 20% or 10% as the case may be cannot be denied to the assessee. The ld. Counsel relied upon the decision of Hon ble Bombay High Court in the case of CIT v. Pruthvi Brokers and Shareholders Private Limited reported in (2012)349 ITR 336(Bom. HC) and submitted that the long term capital gain is to be charged to tax @ 10% without adjusting for cost inflation indexation or 20% after all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x @ 10% of the amount of capital gain before giving effect to the second proviso to Section 48 of the Act i.e. without applying cost inflation index to the cost of acquisition or cost of improvement of the said capital assets being listed securities or units or zero coupon bonds . The above stated chargeability to tax of long term capital gains with or without the benefit of indexation u/s 112 of the Act read with second proviso to Section 48 of the Act, is to be availed at the option of the tax-payer whichever is more beneficial to the taxpayer as is contemplated by the wordings used by the legislature in the aforestated relevant provisions of the Act The relevant provisions of the Act as are applicable for the instant assessment year u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d proviso to section 48, then, such excess shall be ignored for the purpose of computing the tax payable by the assessee. 12 [Explanation.-For the purposes of this sub-section,- (a) listed securities means the securities- (i) as defined in clause (h) of section 2 13 of the Securities Contracts (Regulation) Act, 1956 (32 of 1956); and (ii) listed in any recognised stock exchange in India; (b) unit shall have the meaning assigned to it in clause (b) of Explanation to section 115AB.]] ****** ****** The taxes are to be collected by the authority of law as per the mandate of the Act. Merely because the assessee has not filed the details of long term capital gain in the return of income filed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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