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Issues:
1. Date of acquisition of gold bonds and computation of capital gains. 2. Interpretation of Circular No. 415 dated 14th March, 1985. 3. Reassessment by the ITO based on the order under section 263. 4. Appeal by the assessee against the reassessment order. 5. Appeal by the Revenue against the order of the CIT(A). 6. Cross-objection by the assessee on certain findings of the first appellate authority. Analysis: 1. The main issue in this case revolves around the determination of the date of acquisition of gold bonds and the computation of capital gains. The CIT passed an order under section 263 directing the ITO to treat the date of acquisition as 27th Oct., 1980, the maturity date of the gold bonds, instead of 13th April, 1981, when the gold bonds were redeemed. The Tribunal held that the Circular No. 415 dated 14th March, 1985, clarifies that the date of redemption of the gold bonds should be considered as the date of acquisition of gold for computing capital gains. The Tribunal rejected the assessee's argument that the actual redemption date should be considered, emphasizing that the market value of the bonds on the redemption date is the cost of acquisition of gold for capital gains calculation. 2. The interpretation of Circular No. 415 dated 14th March, 1985, was crucial in determining the date of acquisition of the gold bonds. The Tribunal relied on the Circular to establish that the market value of the bonds on the redemption date should be used for computing capital gains. The Tribunal emphasized that the Circular clearly states that capital gains arise on the subsequent sale of gold, with the cost of acquisition being the market value of the bonds on the redemption date. This interpretation guided the decision in favor of the Revenue and upheld the order passed by the CIT under section 263. 3. The ITO reassessed the assessee based on the CIT's order under section 263, resulting in additional income assessment. The reassessment was challenged by the assessee, leading to an appeal before the CIT(A). The CIT(A) set aside the reassessment order, considering the date of redemption, 13th April, 1981, as the date of acquisition of gold. This decision was appealed by the Revenue, highlighting the disagreement on the date of acquisition and subsequent capital gains calculation. 4. The assessee filed an appeal against the CIT's order under section 263, arguing that the date of acquisition should be 13th April, 1981, the redemption date of the gold bonds. The Tribunal analyzed the contentions of both parties, emphasizing the relevance of Circular No. 415 and the market value of the bonds on the redemption date for determining the cost of acquisition of gold. Ultimately, the Tribunal decided in favor of the Revenue, confirming the order passed by the CIT under section 263. 5. The Revenue appealed against the CIT(A)'s decision, contending that the date of acquisition of gold should be 27th Oct., 1980, the maturity date of the gold bonds, instead of 13th April, 1981. The Tribunal, based on its findings in the previous appeal, reversed the CIT(A)'s decision, supporting the Revenue's stance on the date of acquisition for capital gains computation. 6. The assessee raised a cross-objection on certain findings of the first appellate authority, primarily related to the classification of capital gains as short term instead of long term. The Tribunal dismissed the first ground of the cross-objection, noting that the assessee's initial declaration and argument supported short term capital gains. However, the Tribunal ruled in favor of the assessee on the second ground concerning interest under section 217(1A), directing that no interest should be charged from the assessee. The cross-objection was partly allowed based on these considerations.
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