TMI Blog2014 (4) TMI 1274X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in section 2(42A). DR has submitted that as per the Securities Contracts (Regulation) Act, 1956, the term Securities include shares. The relevant extract of section 2(h) of the Securities Contract (Regulation) Act, 1956 which defines the term securities . Although, under the Securities Contracts (Regulation) Act, the term Securities include shares, but in section 2(42A) of the Act, shares have been mentioned separately. Thus, the intention of the Legislature while introducing the amendment to the Act was very much clear not to include shares in the term security . From the above discussion, we conclude that there is no distinction between unlisted and listed shares for classifying them as Short Term Capital Asset under the Act.In the present case, undisputedly the holding period of the shares is more than twelve months. Thus, the capital gain arising from the sale of shares is Long Term Capital Gain. We are of the considered opinion that the Commissioner of Income Tax and CIT(Appeals) are two separate authorities exercising their jurisdiction under the different provisions of the Act. The Commissioner of Income Tax exercising his revisional jurisdiction remanded the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eved against the assessment order, the assessee preferred an appeal before the CIT(Appeals). The CIT(Appeals) vide impugned order held that, the shares were held for more than twelve months, therefore, the shares are Long Term Capital Asset and the gain arising out of sale of shares is Long Term Capital Gain. The Revenue has come in appeal before the Tribunal assailing the findings of the CIT(Appeals). 4. Shri Anirudh Rai, appearing on behalf of the Department submitted that the assessee had acquired shares and debentures of M/s.Jennys Hotel (P) Ltd., in FY.2006-07 and the same were sold in the period relevant to AY.2007-08. The said shares and debentures were transferred within the period of thirty six months. The said shares were not listed on the recognized stock exchange. In the case of un-listed shares, the minimum period of holding is thirty six months to be part of Long Term Capital Asset . The CIT(Appeals) has erred in coming to the conclusion that in case of un-listed shares, the period of holding should be more than twelve months to classify them as Long Term Capital Asset. The ld.DR further submitted that the Commissioner of Income Tax in his order dated 15-02-2011 h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TR 596 (Mad). 6. We have heard the submissions made by the representatives of both the sides. We have also perused the orders of the authorities below as well as the decisions on which the representatives of both the sides have placed reliance. The issue in appeal is; Whether there is any distinction between unlisted shares and shares listed on recognized stock exchange for classifying them as Short Term Capital Asset under the Act? 7. The term Short Term Capital Asset has been defined in section 2(42A) of the Act. The same is re-produced herein below: 2(42A) short-term capital asset means a capital asset held by an assessee for not more than [thirty-six] months immediately preceding the date of its transfer:] Provided that in the case of a share held in a company [or any other security listed in a recognised stock exchange in India or a unit of the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963) or a unit of a Mutual Fund specified under clause (23D) of [or a zero coupon bond], the provisions of this clause shall have effect as if for the words thirty-six months , the words twelve months had been substituted.] The amendme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f its transfer: i. Equity or preference shares held in a company; ii. Any other security listed in a recognized stock exchange in India; iii. Units of the UTI or units of mutual funds specified u/s.23(D); iv. Zero coupon bonds. The section does not create any distinction between listed and unlisted shares. However, listing of securities is essential prerequisite to fall within the ambit of the term Short Term Capital Asset defined in section 2(42A). The ld.DR has submitted that as per the Securities Contracts (Regulation) Act, 1956, the term Securities include shares. The relevant extract of section 2(h) of the Securities Contract (Regulation) Act, 1956 which defines the term securities is as under:- 2(h). Securities include: I. Shares, Scripts, stocks, bonds, debentures, debenture stock or other remarkable securities of a like nature in or of any incorporate company or other body corporate i(a)xxxxx i(b)xxxxx II. xxxxx III. xxxxx . Although, under the Securities Contracts (Regulation) Act, the term Securities include shares, but in section 2(42A) of the Act, shares have been mentioned separately. Thus, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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