9911796707
TMI Blog2001 (9) TMI 250X X X X Extracts X X X X X X X X Extracts X X X X ..... in investments made by him in the earlier years in Mutual Funds. In the return, he declared the income on repurchase by adopting indexed cost. Observing that the provisions of section 45(6) are clear in that indexed cost cannot be adopted in respect of repurchase of units specified in section 80CCB(2), the Assessing Officer treated the difference between the repurchase price and the capital value as per proviso to section 45(6), as the capital gains assessable in the hands of the assessee. He thus worked out the capital gains to be assessed in the following manner. -------------------------------------------------------------------- "Capital gains as discussed in para-7 above: Repurchase price of: LIC Dhan 80CCB(2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to this is provided in respect of capital gains arising to a non-resident from the transfer of shares in or debentures of an Indian Company. It is to be noticed that second proviso to section 48 does not envisage any exception in the matter of indexing the cost of acquisition in respect of units as referred to in section 45(6). Therefore, in my view, in the absence of any specific clause to the effect that section 45(6) takes precedence over section 48 and the second proviso thereto, the benefit of indexation in the matter of the cost of acquisition of the units cannot be denied to the appellant. So, I direct that the capital gains in this case should be computed with reference to the indexed cost of that capital assets acquired." Ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 90 with effect from 1-4-1991, simultaneous with the provisions of section 80CCB, which allowed a deduction relating to investments made under certain Equity Linked Savings Schemes, which were notified by the Central Government. In this context, the explanatory note given by the C.B.D.T. in its Circular No. 572 dated 3-8-1990 reads as under-- "New provisions relating to Equity Linked Savings Scheme to encourage investment of savings in equities. 25. A new section 80CCB has been inserted in the Income-tax Act in respect of deduction relating to investment made in accordance with the Equity Linked Savings Scheme which will be notified by the Central Government. 25.1 Under the new provisions, a deduction shall be allowed in the case of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f tax at source at the time of repayment of any amount on account of repurchase of units or termination of the scheme. The tax will be deducted at the rate of 20 per cent. 25.5 These amendments will take effect from 1st April, 1991 and will, accordingly, apply in relation to the assessment year 1991-92 ..............." 12. It may be observed that section 45(6) alongwith its Explanation lays down a self-contained scheme for bringing to tax as the capital gains, the difference between the repurchase price of the specified units and the capital value thereof. There does not seem to be any scope, from the language used in section 45(6), for reading the benefit of indexation allowed under second proviso to section 48 into section 45(6). The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alue of such units has further specifically been defined in Explanation below section 45(6). Even though non obstante clause of section 45(6) refers only to sub-section (1) of section 45 and as such does not supersede section 48 or the second proviso thereof. It appears that the benefit of the second proviso to section 48, which allows indexation to the cost of acquisition cannot be allowed, because the terms used in section 45(6) are totally different. If the legislature meant that 'the capital value of such units' used in section 45(6) has to be equated with 'the cost of acquisition' nothing was easier than to use the expression 'cost of acquisition' instead of inventing another phrase, viz. 'capital value of such units'. As the legislatu ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
