1993 (4) TMI 308

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....s follows : "(1) Whether, on the facts and in the circumstances of the case the Tribunal was right in law in holding the assessee-company as company in which the public are substantially interested in spite of the fact that the provisions of s. 2(18)(b)(B)(iii) are clearly applicable to the company's case ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in directing the Assessing Officer to exclude the profit of Rs. 5,14,000 on sale of National Defence Gold Bonds, 1980 without taking into consideration the Board's Circular No. 415 of 14th March, 1985 wherein it has been clarified that the transaction of such a nature would attract capital gains tax ?" 2. As far as question No. ....

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.... The assessee had purchased on 8th Aug., 1980 National Defence Gold Bonds, 1980 for a sum of Rs. 24,16,000. The assessee sold the same on 17th Oct., 1980 for Rs. 29,30,000. The date of maturity of the Bonds was 27th Oct., 1980. The assessee had contended that Rs. 5,14,000 which was the excess realisation from the sale of these Gold Bonds was neither taxable as income nor as capital gain. Under s. 2(14) of the IT Act, the Gold Bonds are excluded from the definition of "capital assets". Hence, the assessee contended that the excess realisation cannot be considered as capital gain. This contention was upheld by the Tribunal, which has held that the receipt of Rs. 5,14,000 was on capital account, but could not be considered as capital gain beca....