INCOME TAX ACT, 1961

Section 45 Section 2(42A)

Capital gain - Short-term or long-term capital gains - Unlisted shares sold after holding for 23 months -

Assessee purchased unlisted company's shares in financial year 2012-13 and sold in the assessment year 2014-15, she computed the indexed cost of acquisition of those shares. AO reached at the conclusion that assessee had shown above shares as 'long-term capital asset' whereas they were held for less than 36 months and therefore they are short-term capital assets'. Therefore, according to the provisions of section 2(42A) AO held that sale of shares of an unlisted company, if held for less than 36 months, the asset is not a 'long-term capital asset' but a 'short-term capital asset'. CIT(A) held that the assessee would not get benefit of 'long-term capital gain' before 36 months. Accordingly, he dismissed the claim of the assessee that shares held by the assessee, which were transferred during the year, were not 'long-term capital asset' but was 'short-term capital asset'. Held: It was not in dispute that the period of holding of unlisted shares, i.e., 'rights shares' of SBPL was more than 12 months and less than 36 months (23 months). Respectfully following the decision of the co-ordinate bench in the case of Mr. Analjit Singh, the gain on transfer of shares of SBPL would be taxable as 'long-term capital gains' and not as 'short-term capital gains' as assessee has held those shares for more than 12 moths.

Followed:Analjit Singh ITA No. 4737/Del/2017, dated 1-12-2017 : 2017 TaxPub(DT) 5225 (Del-Trib).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2014-15

INCOME TAX ACT, 1961

Section 45 Section 48

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