2011 (9) TMI 87

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....dent, had filed its return of income on 22nd October 2001 declaring income of Rs.138.96 crores. The assessment order under Section 143(3) of the Income Tax Act, 1961 ('Act' for short) was passed on 25th March 2004, assessing the income at Rs.142.85 crores. 3. Thereafter, by a notice dated 29th March 2006 the said assessment was sought to be reopened on the ground that the rate of tax on the long term capital gain of Rs.142.85 crores was erroneously taxed at ten per cent under Section 112(1) of the Act, whereas it should have been taxed at the rate of twenty per cent. The assessee objected to the reopening of the assessment. However, the assessing officer rejected the contention of the assessee and held that the capital gains were liable ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....s of section 112(1)(c)(ii) are reproduced herein under for reference :"   Tax on longterm capital gains :112   (1) Where the total income of an assessee includes any income arising from the transfer of a longterm capital asset, which is chargeable under the head "Capital Gains", the tax payable by the assessee on the total income shall be the aggregate of (   a) ...........   (b) ..........   (c) in the case of a nonresident (not being a company), or a foreign company, (   i) .............   (ii) the amount of incometax calculated on such longterm capital gains at the rate of twenty percent;"   3. Therefore, I have reason to believe that the incorrect application of rate of tax....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ble in respect of any income arising from the transfer of a longterm capital asset, being listed securities or unit or zero coupon bond, exceeds ten per cent of the amount of capital gains before giving effect to the provisions of the second proviso to section 48, then, such excess shall be ignored for the purpose of computing the tax payable by the assessee." 7. Thus, under Section 112 of the Act the tax payable by a nonresident on longterm capital gains is twenty per cent. However, the proviso to Section 112(1) provides that in cases specified therein the longterm capital gains in excess of ten per cent shall be ignored. In the present case, the assessing officer in the original assessment order, after considering the second proviso to....