Long-term capital gains treatment follows where acquisition dates in disclosure material show holding beyond 60 months.

Loose diamonds disclosed under the Voluntary Disclosure Scheme were treated as having been acquired in assessment years 1966-67 to 1970-71, because the affidavit and related material showed that the reference was to assessment years rather than accounting years. On that factual basis, the diamonds were held for more than 60 months before sale in February and March 1976, so they did not qualify as short-term capital assets under section 2(42A). The capital gain was therefore long-term, and the assessee was entitled to the corresponding deduction under section 80T.

---

---

Issues: Whether the loose diamonds sold by the assessee were held for more than 60 months so as to constitute a long-term capital asset, and whether the assessee was therefore entitled to deduction under section 80T.

Analysis: The assessee had disclosed the jewellery and loose diamonds under the Voluntary Disclosure Scheme, and the affidavit filed before the appellate authority clarified that the reference to assessment years 1966-67 to 1970-71 in the disclosure meant assessment years and not accounting years. Reading the affidavit as a whole, the acquisition of the disclosed jewellery and ornaments was held to have taken place during the accounting periods relevant to the assessment years 1966-67 to 1970-71. On that basis, the diamonds had been held for more than 60 months before their sale in February and March 1976. The Tribunal therefore held that the asset did not fall within the definition of a short-term capital asset under section 2(42A).

Conclusion: The capital gain was long-term and the assessee was entitled to statutory deduction under section 80T.

Ratio Decidendi: Where documentary material as a whole establishes that the asset was acquired in assessment years sufficiently earlier than the transfer, the asset is not a short-term capital asset under section 2(42A), and the assessee is entitled to the corresponding long-term capital gains relief.

---