ACIT Vs Vireet Investments Private Limited (ITAT Delhi)
ITAT Delhi held that the LTCG derived from exclusive transfer of equity shares and units of equity oriented mutual funds only is held eligible for exemption under section 10(38) of the Income Tax Act. Thus, ground raised by the revenue stands allowed.
Facts- The respondent assessee filed its Income Tax Return on 30.10.2007 declaring NIL income comprising of business loss of Rs. (-) 82,00,995/-, income from the house property at Rs.1,35,800/- and Long-Term Capital Gains (‘LTCG’) of Rs.50,44,027/- and the exempted LTCG of Rs.8,90,66,252/-. However, it offered a sum of Rs.8,21,45,406/- as income u/s. 115JB of the Income Tax Act, 1961. The case was picked up for scrutiny and consequential assessment was completed at income of Rs.11,75,90,926/- by making various additions and disallowances.
Aggrieved, the assessee filed appeal before CIT(A) and succeeded. Dissatisfied with the impugned order, the Revenue challenged the deletion of addition of Rs.8,90,66,252/-claimed exempt u/s. 10(38) of the Act and deletion notional interest of Rs.10,49,768/- taxed by AO.
Conclusion- Held that undisputedly, the ‘taxable securities’ include equity, derivatives, and unit of equity-oriented mutual fund. It also includes unlisted shares sold under an offer for sale to the public included in IPO and where such shares are subsequently listed in stock exchanges. Thus, it does not mean that only on the equity shares and units of equity oriented mutual funds, STT is levied. Further, only part of sample contract notes has been examined by the Ld. CIT(A). Thus, it cannot be ruled out that the assessee has not transferred derivatives and unlisted shares sold under an offer for sale to the public included in IPO and where such shares are subsequently listed in stock exchanges. All these facts need examination in entirety to establish beyond doubt that the assessee has derived LTCG of Rs.8,90,66,252/- on exclusive transfer of equity shares and units of equity oriented mutual funds only. After careful consideration of material on the record in entirety; we, therefore, without commenting on merit of this issue, are inclined to remit this issue to the Ld. AO for deciding it afresh that whether the LTCG of Rs.8,90,66,252/-derived by the assessee are only from transfer of equity shares and units of equity oriented mutual funds. It is hereby clarified that the LTCG derived from exclusive transfer of equity shares and units of equity oriented mutual funds only is held eligible for exemption under section 10(38) of the Act.
