9911796707
TMI Blog2024 (12) TMI 1104X X X X Extracts X X X X X X X X Extracts X X X X ..... he long term capital gain. 3. The facts relating to the above issue are stated in brief. The assessee company is engaged in the business of Manufacture and sales of fragrance compounds and flavours. The assessee company has got two wholly-owned subsidiary units viz., Aarav ITES Pvt. Ltd., and Aarav Suisse SA. Of the two, M/s Aarav Suisse SA is a foreign company. 4. During the year under consideration, the shares of M/s Aarav Suisse SA were sold by the assessee under buy back scheme. Accordingly, the assessee computed long term capital gain by deducting the indexed cost of acquisition of assessee, which was computed by applying cost inflation index. The same resulted in long term capital loss of Rs. 22.93 crores. The AO took the view that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereto: (iii) in case of value of any money or capital asset received by a specified person from a specified entity referred to in subsection (4) of section 45, the amount chargeable to income-tax as income of such specified entity under that sub-section which is attributable to the capital asset being transferred by the specified entity, calculated in the prescribed manner: Provided that in the case of an assessee, who is a non-resident, capital gains arising from the transfer of a capital asset being shares in, or debentures of, an Indian company shall be computed by converting the cost of acquisition, expenditure incurred wholly and exclusively in connection with such transfer and the full value of the consideration received or acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onds issued by the Government: or (b) Sovereign Gold Bond issued by the Reserve Bank of India under the Sovereign Gold Bond Scheme, 2015: [Provided also that where shares, debentures or warrants referred to in the proviso to clause (iii) of section 47 are transferred under a gift or an irrevocable trust, the market value on the date of such transfer shall be deemed to be the full value of consideration received or accruing as a result of transfer for the purposes of this section: ] [Provided also that no deduction shall be allowed in computing the income chargeable under the head "Capital gains" in respect of any sum paid on account of securities transaction tax under Chapter VII of the Finance (No. 2) Act, 2004.] [Explanation. - Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only to the non-residents. Since the assessee herein is a resident, the first proviso will not apply to it. The second proviso gives the benefit of cost inflation index. A careful perusal of the same would show that the said proviso does not distinguish between the assets held in India and held outside India. Once the capital gain is required to be computed as per sec.48 of the Act, then, in our view, the full effect of the said section should be given. Since Income tax Act levies tax upon the assessee, the provisions of the said Act should be applied strictly. Further, under the Principles of interpretation, there is no scope for referring to internal or external aids for interpretation, when the language of the section is clear. Only whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sideration was received in India in Rupees....." Accordingly, he submitted that, in view of the lack of clarity on facts, the parity of facts between the present case and the above said decision cannot be established and in that case, the revenue could not place reliance on the above said case law. We agree with the above said contentions of Ld A.R. Accordingly, we are of the view that the decision rendered by the co-ordinate bench in the case of ICICI Bank (supra) cannot be taken support of by the revenue. 6.3. We noticed that the second proviso to section 48 of the Act, which grants indexation benefit, does not distinguish assets into assets held in India and in foreign countries. Accordingly, we are of the view that the assessee cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
