Law:

Section:

Section 45, read with section 55 of the Income-tax Act, 1961 - Capital gains - Chargeable as - Assessment year 1994-95 - Income arising on sale of tradeable warrants is not liable to capital gains tax when said tradeable warrants did not have any cost of acquisition [In favour of assessee] On sale of the tradeable warrants held as investment in the assessment year in question, the assessee claimed that the profits arising therefrom were not taxable as the tradeable warrants did not have any cost of acquisition. The Assessing Officer, however, held that the income earned on sale of tradeable warrants was liable to capital gains tax. The Commissioner (Appeals) dismissed the assessee's appeal but the Tribunal allowed the assessee's claim. Held that admittedly, clause (aa) of section 55(2) has been brought on the statute book by the Finance Act, 1995, with effect from 1-4-1996, to the effect that the cost of acquisition attributable to the trading warrants shall be statutorily deemed to be nil with effect from 1-4-1996. Since the assessment year involved was assessment year 1994-95, that is, prior to the insertion of clause (aa) of section 55(2), the Tribunal was justified in holding that in the assessment year in question, the income earned on the sale of tradeable warrants was not liable to capital gains tax as the said tradeable warrants did not have any cost of acquisition. JUDGMENT 1. "Whether the Income-tax Appellate Tribunal was justified in holding that the income earned from sale of tradeable warrants amounting to Rs. 37,46,400 was not taxable on the ground that the asset transferred had no cost of acquisition, is the question raised in this appeal ?" 2. The assessment year involved herein is the assessment year 1994-95. 3. Admittedly, the assessee had stopped its trading activity since the assessment year 1993-94 and whatever stocks of shares remained with the assessee have been converted into investment. On sale of the…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492