CIT (International Taxation -3) Vs Kuwait Investment Authority (ITAT Mumbai)
ITAT Mumbai held that holding period of the capital goods includes the date on which asset is acquired and also date of sale/ transfer of the same. Accordingly, shares held for exactly 12 months treated as long term.
Facts- AO noticed that the assessee has offered LTCG of Rs.12,19,93,396/- on sale of certain equity shares sold exactly after one year from purchase of such shares. The AO issued a showcause notice asking the assessee to explain as to why the LTCG should not be treated as STCG as the shares were held exactly for a period of 12 months. Post reply, AO completed the assessment by computing the gains as STCG taxable @15% as per Section 111A of the Act. CIT(A) allowed the appeal. Being aggrieved, the present appeal is filed by the department.
Conclusion- Delhi High Court in the case of Bharti Gupta Ramole has held that the clause, therefore, refers to the holding period. It will not be appropriate to exclude or include any day of the holding for computing the said period. The date on which the asset is acquired is not to be excluded because the holding starts from the said date. Neither is the date of sale/transfer to be excluded.
