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TMI Blog2012 (9) TMI 444X X X X Extracts X X X X X X X X Extracts X X X X ..... gating to Rs. 28,17,945/- was not allowable as a short term capital loss but was required to be treated as part of the cost of acquisition of the convertible Part A of the debentures and its purported findings in this behalf are arbitrary, unreasonable and perverse?" The appellant assessee filed its return of income for the assessment year 1993-94 on 21.12.1993. Thereafter, it filed a revised return on 23.12.1994. The revised return was rectified under Section 154 of the Income Tax Act, 1961. In the said revised return the assessee in computation of capital gain claimed a short term capital loss of Rs. 28,57,947/- as shown below : Name of Scrip No. of debenture Cost Sale Price Loss Sold to 15% debentures of BILT @ Rs. 400 per debent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consisted of two parts. Part A was the convertible portion having face value of Rs. 100/-. The convertible portion at the end of six months from the date of allotment was to stand converted into one equity share of BILT. Part B was the non-convertible portion having face value of Rs. 300/-. The aggregate sum of Rs. 400/- for the two parts was payable as follows : Convertible Portion (Part A) Non-convertible Portion (Part B) Total amount payable On application On allotment Rs. 50 50 ____ 100 Rs. 115 185 ____ 300 Rs. 165 235 ____ 400 It was also submitted that the pricing of the PCD and their two parts was approved by the Controller of Capital Issue. The letter of offer of the said rights issue itself pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of his contention Mr. Khaitan relied on a decision of the learned tribunal in respect of the self-same rights issue in the case of Karam Chand Thapar and Brothers Ltd. Vs. Deputy Commissioner of Income Tax judgement dated 12.06.1997 in ITA No. 2699 (Cal) of 1996, which was confirmed by an Hon'ble Division Bench of this Court by order dated 17.12.1998 in ITA No. 130 of 1998. He further submitted that the said judgement and order of this Court in I.T.A. No. 130 of 1998 has not been appealed against and has become final and binding upon the Department. He also referred to other decisions of the tribunal in ITA No. 1670 (Cal) of 1997 in the case of Man Mohan Thapar Vs. Deputy Commissioner of Income Tax and I.T.A. No. 294 (Cal) of 1997 in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the Part A portion had not been converted into share and therefore loss has to be constituted as a cost of acquisition of PCD of BILT by the appellant assessee. We have considered the submissions of the parties. We are of the opinion that this issue in fact fell for decision before this Court in the case of CIT, West Bengal, II, Cal Vs. Karam Chand Thapar and Borthers Ltd. in ITA No. 130 of 1998 wherein this Court by its judgement and order dated 17th December, 1998 has upheld the decision of the learned tribunal that the claim of loss of the assessee in the matter of sale of Part B of the PCD in the self-same rights issue was permissible as short term capital loss. While approving the decision of the learned tribunal the Bench held as f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en challenged by the department and the same has been accepted. In view of the said ratio of the Hon'ble Division Bench upholding the fact that the loss suffered by the assessee in the sale of the convertible Part B portion of NCD to Citi Bank is to be treated as a short term capital loss we find no reason why the appellant in similar situation is to be treated differently. It is apposite to state that in respect of the other cases, namely, I.T. A. No. 294 (Cal) of 1997 and I.T.A. No. 1679 (Cal) of 197, the learned tribunal has accepted such loss as short term capital loss and permitted such deduction in respect of the self-same rights issue to the respective assessees. The department has not appealed against such orders of the learned t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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