TaxTMI 
TaxTMI 
TaxTMI 
2005 (8) TMI 44
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....arguments were heard in I.T.A. No. 55 of 2002, the facts are being taken from that case. The assessee held 1,500 shares in M/s. Jindal Strips Company. The company decided to issue rights shares and offered 1,875 rights shares at the rate of Rs. 100 per share with an option of renouncement. The assessee decided to renounce the rights shares in favour of M/s. Colorado Trading Company at the rate of Rs. 30 per share. In this manner, he realised Rs. 56,250 from the renouncement. The assessee claimed that due to issue of new rights shares, there was a sharp fall in the market value of shares already held by him. In this process, the value of his old shareholding depleted and resulted in a loss of Rs. 3 lakhs. He claimed this loss against the pr....
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....ture of long-term capital loss. The findings of the Tribunal are contained in para. 10 of the order, which reads as under: "10. After considering the rival submissions and the materials on the file, we are of the view that on the facts and in the circumstances of the case, the Assessing Officer was justified in treating the capital loss as long-term capital loss and not short-term capital loss and the learned Commissioner of Income-tax (Appeals) was wrong in directing the Assessing Officer to treat the capital loss under the head "Short-term capital loss". It is abundantly clear from the facts of the case and the ratio of the Supreme Court decision in the case of Miss Dhun Dadabhoy Kapadia [1967] 63 ITR 651 that the capital loss was allowe....
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....mar Jayantilal v. CIT [1995] 211 ITR 755 (Guj). Mr. Akshay Bhan, appearing on behalf of the appellants in I.T.As. 58 and 59 of 2002, reiterated the contentions raised by Mr. M.L. Garg. He further relied on the decision of the Calcutta High Court in CIT v. Oberoi Building and Investment Pvt. Ltd. [1993] 203 ITR 403, in support of the contention that the loss in question was a short-term capital loss. Dr. N.L. Sharda, learned standing counsel for the Revenue, on the other hand, supported the findings of the Tribunal. He contended that the right to receive shares in a rights issue was a right which was embedded in the old shares held by the appellant and, therefore, it was acquired on the date when the old shares had been acquired. He pointe....
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....g therefrom was in the nature of long-term or short-term was not an issue in that case. Similar was the position in K.A. Patch [1971] 81 ITR 413 (Bom). In Chunilal Khushaldas [1974] 93 ITR 369 (Guj); Manecklal Premchand [1990] 186 ITR 554 (Bom) and Smt. Sanatkumar Jayantilal [1995] 211 ITR 755 (Guj), the courts were dealing with cases where bonus shares allotted to the assessee had been sold. It was in that context that it has been held that bonus shares would not relate back to the date of issue of the original shares and for determination as to whether the same was a short-term capital asset or a long-term capital asset, the date of issue of the bonus shares was relevant. In the present case, the transfer is not of the rights shares but....