2013 (7) TMI 650

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....) has erred in holding that long-term capital gains should be worked out each transaction wise and tax should be charged at 10 percent or 20 percent (without indexation/with indexation respectively) whichever is beneficial to the assessee/at the option of the assessee ignoring that the law with respect to taxation of long-term capital gain on sale of shares had undergone a change with effect from 2000-01 wherein long-term capital gain on sale of shares could be offered to tax at 10 percent plus surcharge instead of 20 percent plus surcharge, if the cost is not modified by adopting the cost inflation index ? 2. Whether, on the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals) has erred in holding t....

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....rcharge instead of 20 percent plus surcharge, if the cost is not modified by adopting the cost inflation index. The Assessing Officer was of the view that the assessee has adopted wrongly cost inflation index and offered capital gain at 10 percent plus surcharge. It was in this backdrop, the assessee was asked to explain as to why income under the head "Capital gains" should not be worked out on sale price minus the actual cost of acquisition which comes to Rs. 4,21,20,693 and indexation should not be given. In response to the Assessing Officer's requisition, the assessee submitted the computed statement of calculation of long-term capital gain (with indexation taxable at 20 per cent.) and statement of calculation of long-term capital gain ....

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....as to be computed and then aggregated by setting off the loss, if any, from the transfer of long-term capital assets from the gain, if any, of the other long-term capital assets. As provided in section 48, the option is with the assessee to or not to avail of the benefit of indexation for the computation of capital gains on the transfer of each of the long-term capital asset, it is only after computing the capital gains as per section 48, can it be aggregated by setting off the loss under section 70 of the Income-tax Act and it is then that the rate of tax as provided under section 112 is applied. The second proviso to section 112 provides that if the capital asset which is transferred is a listed security or units or a zero coupon bond, an....