TaxTMI 
TaxTMI 
TaxTMI 
2003 (1) TMI 698
X X X X Extracts X X X X
X X X X Extracts X X X X
....al submissions in the light of material placed before us and precedents relied upon. 4. The assessee purchased Indira Vikas Patra on the following dates : Date of Purchase Face Value (Rs.) 31-3-1987 75,000 8-5-1987 1,00,000 6-7-1987 1,00,000 Assessee got back the money on the maturity of Indira Vikas Patra. Applying the index cost, assessee claimed long term capital loss. The maturity period was five years. After maturity, assessee took the realization value, which was the purchase value. Assessing Officer held that there was no transfer of the capital asset. As such there was no capital gain/loss. 5. Being aggrieved, assessee preferred appeal before CIT(A). CIT(A) held that it was a pure case of refund. There was no transfer inv....
X X X X Extracts X X X X
X X X X Extracts X X X X
....idation. Scheme of compromise was arranged. Assessee could realize only ₹ 13,323 from the company. The balance of ₹ 11,617 was claimed by the assessee as capital loss suffered by him during the relevant assessment year. Hon'ble Gujarat High Court allowed this loss as capital loss. In the case of Anarkali Sarabhai v. CIT [1997] 224 ITR 4224 (SC) it was held that the difference between sum received by the assessee on redemp- tion of the shares and the sum earlier paid for purchasing was taxable as capital gains. The Court held that when preference shares are redeemed by the company, the shareholder has to abandon or surrender the shares, in order to get the amount of money in lieu thereof. There is, therefore, also a relinquishmen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....p discount bonds and strips reported in 254 ITR (statute) 302. 12. We have considered the text and context of the various precedents relied upon. It is clear that none of the precedents discussed in the court deals with the present situation. We are concerned with the issue that whether Indira Vikas Patra could be construed to be a capital asset. In that context, it is important to ascertain that whether surrender of Indira Vikas Patra on its maturity amounts to relinquishment of right in the asset. De hors transfer, there cannot be capital gain. 13. Adverting to the scheme of Indira Vikas Patra, we find that this can be purchased in the form of certificates from Post Office of various denomi-nations by paying cash or locally executed che....
X X X X Extracts X X X X
X X X X Extracts X X X X
....That is how the instrument becomes transferable. The context of transferability is akin to that of currency note. Currency note is also freely transferable. It does not bear the name of holder. No documentation is required for effecting the transfer. 15. In order to subject any profit or gain received by or accruing to an assessee to the charge of capital gain, the sine qua non is that the receipt or accrual must have originated in a transfer within the meaning of section 45(1) read with section 2(47). There must, therefore, be a casual nexus between the transfer and the profit or gain received by or accruing to the assessee. Section 2(47) defines 'transfer' in relation to capital asset, to include "the sale, exchange or relinquishmen....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... his rights by the process of extinguishment resorted to and unless there is consideration for such extinguishment, there can be no transfer of the capital asset for the purpose of sections 45 and 48. According to the rule of Noscitur a Sociis, the expression 'extinguishment of any rights therein' would take colour from the associated words and expression will have to be restricted to the sense analogous to them. If the Legislative intended to extend the definition to any extinguishment of right, it would not have included the obvious instances of transfer, viz., sale, exchange, etc. Hence, the expression 'extinguishment of any rights therein' will have to be confined to the extinguishment of rights on account of transfer and cannot be exte....