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TMI Blog2014 (2) TMI 686X X X X Extracts X X X X X X X X Extracts X X X X ..... lculation of Indexation benefit – Cost of Acquisition of shares – Held that:- As per the express provisions for determining the holding period of capital asset being equity shares allotted in pursuance to demutualisation or corporatisation of a recognised stock exchange in hand, the period for which the assessee was a member of the recognised stock exchange prior to such demutualisation or corporatisation shall also be included - the holding period of the asset is to be calculated from the acquisition of date of 'BSE card' and not from the date of conversion of 'BSE card' into equity shares - As per the section 55(2)(ab) of the Act, the cost of acquisition in relation to equity shares allotted to a shareholder under a scheme of demutualisat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one beyond his powers to enhance the income under various heads, in particular LTCG by Rs.1,20,91,700/-." 7. The CIT(A) erred in calculating LTCG and made addition of Rs.1,20,91,700/-. 8. The CIT(A) erred in ignoring the provisions of Section 47 (xiiia). As per the said section any exchange of a capital asset being membership right held of a recognised stock exchange for acquisition of shares of stock exchange will not attract Section 45 as it does not amounts to transfer. Hence, the original asset being BSE card and as there was not transfer taken place as per Section 47 (xiiia), the indexation benefit must be given from acquisition of BSE card and enhancement towards LTCG is bad in law." 2. Our findings in respect of the matter ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons' (supra), in our humble view, the section 28 of the Act deals with the income chargeable to tax under the head 'profits and gains of business or profession'. It does not deal with the expenditure allowable as deduction for computation of income under the head 'profits and gains of business or profession'. Section 30 to section 36 section 38 deal with certain specific type of expenditure which is allowable as deduction while computing the income from business or profession whereas section 37 is a general section which provides that any expenditure laid out or expended wholly and exclusively for the purpose of business or profession shall be allowed in computing the income chargeable under the head 'profits and gains of business or prof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the transaction charges to the account of stock exchange. So, in view of the law laid down by the Hon'ble High Court in the case of Kotak Securities Ltd. (supra), we do not find any infirmity in the order of the CIT(A) disallowing expenditure relating to transaction charges. This ground of the appeal of the assessee is accordingly dismissed. Ground Nos.6, 7 8: 5. The above grounds of appeal are interconnected and are relating to calculation of indexation benefit to be given while arriving out of cost of acquisition of the shares. 6. The assessee had purchased 'BSE card' for Rs.1,18,69,023/- during F.Y. 1994-95. As per the scheme for corporatization approved by the Securities Exchange Board of India, the said 'BSE card' got conve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ediately preceding the date of its transfer10a :] 11 [Provided that in the case of a share held in a company 12[or any other security listed in a recognised stock exchange in India or a unit of the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963) or a unit of a Mutual Fund specified under clause (23D) of section 10] 13[or a zero coupon bond], the provisions of this clause shall have effect as if for the words "thirty-six months", the words "twelve months" had been substituted.] 14 [Explanation 1].--(i) In determining the period for which any capital asset is held by the assessee-- (ha) in the case of a capital asset, being equity share or shares in a company allotted pursuant to demutualisation or c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y shares. As per the section 55(2)(ab) of the Act, the cost of acquisition in relation to equity shares allotted to a shareholder under a scheme of demutualisation or corporatisation shall be the cost of acquisition of his original membership of the exchange. For the sake of convenience section 55 (2) (ab) is reproduced as under: "55.(2). [For the purposes of sections 48 and 49, "cost of acquisition"96,-- [(ab) in relation to a capital asset, being equity share or shares allotted to a shareholder of a recognised stock exchange in India under a scheme for 6[demutualisation or] corporatisation approved by the Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 199 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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