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TMI Blog2012 (10) TMI 746X X X X Extracts X X X X X X X X Extracts X X X X ..... ng on transfer of such shares without appreciating the legislature's intent that the cost of membership card is to be taken at the cost paid for acquiring such membership card as per the proviso to section 55(2)(ab) of the I.T. Act. (ii) The Ld. CIT (A) erred in law and on facts in holding that the cost of shares is to be taken at the cost of acquiring membership card without appreciating the ratio laid down by the Hon'ble Supreme Court in the case of Techno Shares & Stocks Ltd. & Ors. Vs. CIT (327ITR323) that the consideration paid for acquiring membership card is mainly a trading right on the floor of Stock Exchange. (iii) The Ld. CIT (A) erred in law and on facts in holding that the value of shares is to be taken at the proportionate c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer worked out the long term capital gain at Rs. 2,59,95,000/- as against capital gain of Rs. 1,34,45,000/- offered by the assessee. 3. By the impugned order, the learned CIT(A) deleted the addition made by the Assessing Officer on account of long term capital gain, after having made the following observations : "Through this ground, the assessee has challenged the AO's decision on adoption of cost of acquisition of shares as nil instead of original membership value of Bombay Stock Exchange as per section 55(2)(ab). The facts involved have already been given in para 2 and 2.1 above. For ready reference, section 55(2)(ab) is reproduced hereunder :- "Section 55(2) For the purposes of sections 48 and 49, "cost of acquisit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orporatisation and demutualisation of Stock Exchanges, whereby the AOPs were converted into the companies had involved segregation of these twin rights into two separate and independent rights viz. (1) the right to participate in the ownership of assets of the Stock Exchange by issuance of shares in the new corporate body; and (2) the right to trade on Stock Exchanges. The provisions of clause (ab) and sub-section (2) of section 55 provided the meaning of 'cost of acquisition' in relation to a capital asset, being equity share of a recognised Stock Exchange in India under a scheme of corporatisation approved by the Securities and Exchange Board of India, whereas the proviso inserted by the Finance Act, 2003 therein provided for the cost of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cost of acquisition of 10,000 shares in the context of working of Capital Gain would amount to Rs. 2,51,10,000/-. Accordingly, the cost of 5,000 shares would work out to Rs. 1,25,55,000/- which has indeed been adopted by the assessee while working out the capital gain. The cost so worked out is in accordance with the provisions of section 55(2)(ab) which need to be adopted to work out the capital gain. The A.O. is accordingly directed to compute the capital gain by adopting the cost of acquisition at Rs. 1,25,55,000/- as shown by the assessee. The ground is decided in favour of the assessee." 4. Aggrieved by the aforesaid order of the learned CIT(A), the revenue is in appeal before us. 5. Rival contentions have been considered and recor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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