TMI Blog2005 (8) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... ition that the date of the decision of the company to issue the rights shares is the date of acquisition of the right to receive the rights shares for determining as to whether such right is a long-term capital asset or a short-term capital asset. No other point has been raised. In view of the above, we find no merit in these appeals and dismiss the same - - - - - Dated:- 11-8-2005 - Judge(s) : N. K. SUD., VIRENDER SINGH. JUDGMENT The judgment of the court was delivered by N.K. Sud J.-This order will dispose of five appeals, viz., I.T.A. Nos. 55 to 59 of 2002, involving common question of law and facts. All these appeals are directed against the common order of the Income-tax Appellate Tribunal, Delhi Bench "E", New Delhi (for sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss and not short-term capital loss as claimed by the assessee. Aggrieved by the order of the Assessing Officer, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals), who accepted the claim of the assessee that the loss was in the nature of short-term capital loss. The Commissioner of Income-tax (Appeals) held that there is no inherent right with any shareholder to receive the bonus shares or rights shares. It accrues only when the company takes the decision for issuance of such shares. Thus, according to him, the right to receive rights shares was a short-term capital asset. Aggrieved by the order of the Commissioner of Income-tax (Appeals) the Revenue preferred an appeal before the Tribunal, which has been a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the loss was a short-term capital loss. The decisions relied upon by the learned Authorised Representative of the assessee do not apply to the facts of the present case." Mr. M.L. Garg, appearing on behalf of the appellant, contended that the right to receive bonus shares or rights shares arises only when the company decides to issue such shares and the date of acquisition of the original shares has no relevance for determination as to whether the rights shares or the bonus shares are a long-term capital asset or a short-term capital asset. In support of this contention, he placed reliance on the following judgments: (1) Miss Dhun Dadabhoy Kapadia v. CIT [1967] 63 ITR 651 (SC); (2) CIT v. K.A. Patch [1971] 81 ITR 413 (Bom); (3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the adjustment of loss on account of fall in value of the old shares against the amount received on the renunciation of the right to receive rights shares on the ground that such right was embedded in the old shareholding which had matured when the decision was taken to issue the new shares. That being so, the question as to whether this right was a long-term or a short-term capital asset has to be decided on the basis of the period for which the old shares have been held. None of the authorities cited by counsel for the appellants support their case. In Miss Dhun Dadabhoy Kapadia [1967] 63 ITR 651, the only issue for consideration before the Supreme Court was as to whether the loss in the value of old shares as a result of issue of ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n arising on the sale of right to purchase the rights shares had been shown as short-term capital gain and assessed as such. However, no dispute had been raised by the Revenue about the nature of the capital asset. The Calcutta High Court, therefore, had no occasion to deal with the question as to whether the capital gain was short-term or long-term in nature. Thus, this judgment cannot be said to be an authority on the proposition that the date of the decision of the company to issue the rights shares is the date of acquisition of the right to receive the rights shares for determining as to whether such right is a long-term capital asset or a short-term capital asset. No other point has been raised. In view of the above, we find no mer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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