9911796707
TMI Blog1997 (5) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... ial Bearer Bonds issued by the Central Government under the Special Bearer Bonds (Immunities and Exemptions) Act, 1981 (for short the "Bearer Bonds Act"). During the relevant previous year which ended on31st March, 1992, the assessee encashed the above bonds on maturity at a premium of Rs. 2,000 per bond. The total amount realised by the assessee on such redemption was: . . Rs. (i) Against the face value of Rs. 10,000 per bond (885 bonds) 88,50,000 (ii) As premium of Rs. 2000 per bond for 885 bonds : 17,70,000 . . 1,06,20,000 The assessee claimed total exemption of the above sum in terms of the Bearer Bonds Act. The Asstt. CIT however, asked the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... course and not to the Special Bearer Bonds Scheme of 1981 which was for bringing out concealed income. 3. The learned counsel for the assessee Dr. S. Narayanan during the course of arguments submitted that CIT(A) has erred on both the counts. Firstly s. 5(b) of the Bearer Bonds Act inserted a new sub-cl. (ib) in sub-s. (15) of s. 10 of IT Act as under: "(ib) Premium on redemption of Special Bearer Bonds, 1991." The learned CIT(A) was, therefore, in error in thinking that there was no reference to s. 10(15)(ib) in the Bearer Bonds Act. The above-mentioned amendment was duly incorporated in the IT Act w.e.f.12th Jan., 1981. However, Direct Tax Laws (Amendment) Bill, 1987, proposed w.e.f.1st April, 1989, deletion of above provision along ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccordingly argued that premium received on encashment of bonds be directed to be treated as exempt. The learned Departmental Representative, supported impugned order of CIT(A). 4. After careful consideration of rival submissions we are of view that there is no justification to tax premium received on encashment of bonds at their maturity. Sec. 5 of Special Bearer Bonds (Immunity Exemptions) Act, 1981, inserted sub-cl. (ib) after sub-cl. (ia) in cl. (15) of s. 10 of IT Act exempting "premium on redemption of Special Bearer Bonds, 1991". The aforesaid provision was maintained in amending cl. 15 in s. 10 whereby sub-cl. (i) provided omnibus exemption to all sorts of exemptions on securities, bonds, savings, service deposits, etc. as are no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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