2020 (9) TMI 630

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....39; Chennai ('the Tribunal' for brevity) in I.T.A.No.1423/Mds/2016, for the assessment year 2008-09. The Revenue has raised the following substantial question of law: ''1.Whether the Appellate Tribunal is correct in holding that the assessee is entitled to the exemption u/s 10(23FB) despite the fact that (STT) Security Transaction Tax liability was borne by the Venture Capital Fund and not by the assessee?'' 2. We have elaborately heard Mr.J.Narayanasamy, learned Senior Standing counsel for the appellant / assessee and Mr.R.Vikram, learned counsel for the respondent / assessee. 3. The assessee is an individual and a Director of Public Limited Company and filed the return of income for the Assessment Ye....

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....e Commissioner of Income Tax (Appeals)-15, Chennai ['CIT(A)']. The CIT(A) confirmed the addition of Short Term Capital Gain (STCG) stating that the assumption made by the Assessing Officer regarding the share of profit on sale of shares, had suffered STT. In doing so, followed certain decisions of the Tribunal, Delhi. Aggrieved by such order, the Revenue filed Appeal before the Tribunal. The Tribunal by the Impugned Order remanded the matter to the Assessing Officer for considering the claim on STCG afresh, in the light of the conditions specified under Section 111A of the Act. Further the Tribunal after noting the factual position agreed with the finding of the CIT(A) and directed the Assessing Officer to consider the claim of the ....

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....r out of the investments made in Venture Capital Fund shall be chargeable to tax in the same manner as if it were the income accruing to such investor had he made investments directly in the Venture Capital Undertaking. Further it was contended that under Section 115U(3) of the Act, the income credited by the Venture Capital Fund shall be deemed to be of the same nature and in the same proportion in the hands of the investor, as it had been received or accrued to the Venture Capital Fund. Therefore it was contended that the income from Venture Capital Fund, accrued to the investor's share of same nature under Section 115U(1) of the Act and is chargeable to tax in the same manner as under Section 115U(3) of the Act. Thus it was contended....