DCIT Vs Business Excellence Trust (ITAT Mumbai)
ITAT Mumbai held that since the shares were acquired on or after 01.10.2004, the assessee would be entitled to claim exemption of LTCG u/s 10(38) of the Income Tax Act even if the Securities Transaction Tax (STT) was not paid at the time of acquisition.
Facts- The assessee is established as a trust. Though the assessee applied for “VCF” status to the SEBI on 18th May, 2006, yet it got the Certificate of registration only on 10th October, 2008.Thus the assessee became a Venture Capital Fund (VCF) as per the Securities and Exchange Board (Venture Capital Funds) Regulations, 1996 (SEBI Regulations).
The Venture Capital Funds are entitled to invest in “Venture Capital Undertakings” (VCU) as per SEBI Regulations. The assessee identified a VCU, viz., M/s Dixon Technologies Limited (earlier M/s Dixon Technologies Private Limited), which was an unlisted company then. The assessee made investments in the above said VCU by subscribing to its shares over a period of time.
11,55,730 shares were sold by the assessee from September, 2017 to November, 2017. Consequently, the assessee earned Long Term Capital Gain (LTCG) of Rs.247.67 crores during the year under consideration. In the return of income, the assessee claimed exemption of LTCG u/s 10(23FB) of the Act.
