Bonds, that mature in future, issued against services provided for a project, does not convert them into capital assets

Brief of the Case: In the cited case, Delhi High Court held that the Iraqi Government’s inability to pay due to sanctions imposed by it and the subsequent Central Government’s negotiating an arrangement for its payment through bonds that were to mature in future with interest did not in any way alter their character or convert them into capital assets. The assessee’s claim of capital loss, based on indexed treatment of capital gain is therefore insubstantial and unfounded on any principle.

Facts

Please become a Premium member. If you are already a Premium member, login here to access the full content.