TaxTMI 
TaxTMI 
2013 (4) TMI 178
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....essee sold 7,20,992 equity shares of Lupin Limited held by it from the past, at Rs. 555 per share, for an aggregate of Rs. 40.02 crores and offered a net gain of Rs. 31.30 crores under the head capital gains. From the assessment order, it is evident that part of this stock, the assessee was holding 3,44,292 shares as stock in trade and balance as investment. In the instant year, the assessee converted this stock of 3,44,072 shares, held as SIT into investment and sold the block on 03.11.2003. 3. This point was noticed and examined by the AO, who, after taking into consideration the various replies of the assessee, denied the status of LTCG on shares converted to investment from SIT, because, the period of holding the shares as investment w....
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....etailed analysis, concluded "(1)(a) The year of acquisition is only that is the year in which it is purchased for the first time by the assessee. However, when it is acquired by other modes specified in sec 49, it is the year in which the previous owner acquired it; (b) The only condition to be satisfied is that capital asset must be capital asset only on the date of transfer. (c) It is not necessary that it should be capital asset on the date of acquisition or on the statutory date. [Pls see Kalyani Exports & Investments P Ltd / Jannhavi Investments Pvt Ltd & Ors v. DCIT 78 ITD 95, 124, 131-132 (Pune) (TM) also approved in 304 ITR 276 (Bom)] (d) The true ratio of the decision [Keshavji Karsondas vs. CIT 207 ITR 737 (Bom)] is that there....
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....apital asset. (4) The jurisdictional Tribunal in the case of ACIT v. Bright Star Investment (P) Ltd. (2008) 24 SOT 288 (Mum) held that in the absence of specific provision in sec. 45(2) to deal with a situation where shares were converted from stock-in-trade into investment and later on investment was sold at profit, earned on sale was assessable as long-term capital gain; it was not proper to compute business income till date of conversion of shares into investment, and then to compute long-term capital gain till date of sale of investment." 6. Basing his observation on the above, the CIT(A) concluded that, "... only the date of first holding, i.e. date of acquisition of the shares as SIT, and not the subsequent period of holding as cap....