INCOME TAX ACT, 1961

Section 55(2)(ab)

Capital gains - Cost of acquisition - Cost of shares of BSE Ltd., whether to be taken as original cost of membership -

Issue arose as to whether cost of shares of BSE Ltd. will be original cost of membership card in terms of section 55(2)(ab). Held: Issue was placed before larger Bench of Tribunal and majority view was that cost of acquisition of shares of BSE Ltd. shall be the original cost of acquisition of Membership called in terms of section 55(2)(ab). Period of holding of shares of BSE Ltd will be period for which the person was a member of the recognised stock exchange in India immediately prior to such de-mutualisation or corporatisation shall also be included in the period of holding of shares. Accordingly, period of shares of BSE Ltd shall be reckoned from the date of original members of the BSE and not from the date of allotment of shares in BSE Ltd.

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2008-09

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