I.  Useful Case laws :

1.  Shri Uday Punj Vs. CIT, ITA No. 183/2012, Judgment pronounced on: 09.07.2012, High court of Delhi

Issue:

Whether capital gains tax is payable by the assessee or not, on the income earned by him from sale of SEBI shares which he sold through the public offer, and if payable, whether at lower rate of 10% or at the normal rate of 20%.

Held:

Section 10(38) of the Income Tax Act exempts, from payment of tax, any income which arises from transfer of equity shares in a company, where the transaction is chargeable to Securities Transaction Tax, under chapter VII of the Finance (No.2) Act, 2004. To the extent it is relevant, Section 98 of Finance (No.2) Act, 2004 provides for charging of Securities Transaction Tax on sale of an equity share in a company, where the transaction of such sale is entered into in a recognized stock exchange.

Capital gain tax at the rate of 10% was payable only in case of “listed securities”. Since, these shares had been transferred to the applicants in the public offer, by 5.1.2006 before they were actually listed on the stock exchanges on 6.1.2006, they were not „listed securities‟ at the time of sale by the appellant and consequently, the transaction would not be eligible for payment of capital gain tax at the lower rate of 10%.

(Please click here for judgment)

2.  ACIT Vs. Shri Deepak S Bheda, ITA No. 5011/Mum/2010, Date of pronouncement: 15/06/2012, ITAT- Mumbai

Assessee can claim both exemption u/s 54 and 54F simultaneously.

It is held that exemption under ss. 54 and 54F of the Act would be allowable in respect of one residential house only. If the assessee has purchased more than one residential house, then the choice would be with assessee to avail the exemption in respect of either of the houses provided the other conditions are fulfilled. However, where more than one unit are purchased which are adjacent to each other and are converted into one house for the purpose of residence by having common passage, common kitchen, etc., then, it would be a case of investment in one residential.

(Please click here for judgment)

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