2009 (2) TMI 87

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....ether the Appellate Tribunal is right in law and on facts in holding that the Assessing Officer was not justified in determining the short term capital gain relating to the transaction of sale of right of fully convertible debentures in relation to which the assessee claimed loss? Whether the Appellate Tribunal is right in law and on facts in applying the decision in the case of Ms. Dhun Kapadia wherein the assessee had actually suffered a loss in the price of shares held by her, with reference to the cost of acquisition, whereas in the case of the assessee, even after the shares became ex-right the ruling price of those shares at Rs.180/- was much higher than the actual cost of acquisition by the assessee at Rs.35/- and thus there was no ....

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....sideration received was taxable. Accordingly, the loss claimed by the assessee to the tune of Rs.7,03,96,560/-, on the transaction relating to renunciation of rights to receive debentures, was disallowed. 5. The assessee carried the matter in appeal before Commissioner (Appeals) and succeeded for the reasons recorded in order dated 26.09.1997. Revenue carried the matter in appeal before the Tribunal and contended that the Apex Court decision in case of Miss Dhun Dadabhoy Kapadia Vs. Commissioner of Income-tax, Bombay, [1967] 63 ITR 651 (S.C.) was not applicable on facts of the case as the Scheme of 1961 Act was different to the Scheme of 1922 Act i.e. Old Act; that in this case the entitlement was to a convertible debentures and not to a r....

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....rovisions of Sections 2(47), 45, 48(i) and 48(ii) of the Act to emphasise the difference in language of the provisions and contended that the 1992 Act permitted working out capital gain or loss on the basis of actual cost, whereas in the provisions under the present Act the concept was as regards cost of acquisition and the said two concepts were different. For this purpose, attention was also invited to the second Proviso as appearing below Section 48(ii) of the Act. In support of the submissions made Mr. Bhatt placed reliance on the decision of this Court in the case of Commissioner of Income Tax Vs. Suhashbhai Vadilal, [1999] 239 ITR 362 (Guj.). 8. Mr. J. P. Shah, learned advocate appearing on behalf of the respondent-assessee, submitte....

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....to a capital asset, where by virtue of holding capital asset being a share or any other security, the assessee became entitled to subscribe to any additional financial asset, then in relation to any right to renounce the said entitlement to subscribe to the financial asset, when such right is renounced by the assessee in favour of any person, the cost shall be taken to be NIL in the case of such an assessee. Therefore, till 31.03.1995 the Legislature had not provided for any modality of working out cost of such a right entitlement on the basis of a financial asset held by an assessee. 10. In the impugned order the Tribunal has taken note of the fact that the departmental representative had contended that the said amendment should be treate....