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TMI Blog2014 (5) TMI 996X X X X Extracts X X X X X X X X Extracts X X X X ..... from the date from which the right vested in him by allotment of ESOP entitling him to acquire the shares, which is also a capital asset - there can be two views on the issue and it cannot be said that assessee’s action in returning the income as long term capital gain was illegal - The assessee had not concealed any particulars of its income - The facts were duly disclosed before the Department and only on account of different interpretation, the capital gain was treated as short term capital gain – thus, there is no reason to interfere in the order of the CIT(A) – Decided against Revenue. - ITA No. 3451/Del/2013 - - - Dated:- 28-4-2014 - Shri S. V. Mehrotra And Shri A. T. Varkey,JJ. For the Appellant : H. G. Sema, DR For t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Girdhar Krishna vs. ACIT, 117 ITJ (2008) 965 (Bang.), required the assessee to clarify as to why the gain on sale of shares under ESOP should not be treated as short term capital gain instead of long term capital gain. The assessee pointed out that he has already furnished revised return of income for AY 2007-08 on 20/02/2009 based on the judgment of ITAT, Bangalore in case of Muthuswami Ravi Kumar vs. ACIT on methodology of calculating the capital gains made on sale of ESOP s issued by the employer. The assessee further pointed out that in view of decision of ITAT, Bangalore Bench in the case of Girdhar Krishna vs. ACIT (supra) he had no objection in treating the whole of long term capital gain on sale of shares under ESOP as short term ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty ignoring the fact that it was the AO who first detected the discrepancy that the assessee had deliberately claimed the capital gain (tax @ 20%) instead of short term capital gain (tax @ 30%) with the intention to evade the tax liability; 3. Deleting the penalty that the assessee had voluntarily offered the amount for addition on account of short term capital gain during the course of assessment proceedings as he had nothing to explain. 6. We have considered the submissions advanced by ld. DR and have perused the record of the case. 7. Before ld. CIT(A) the assessee submitted that the AO in the reasons recorded at the time of reopening the case u/s 148 of the I.T. Act, had questioned the sale of 437 shares out of the grant of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra) for coming to the conclusion that this was a case of short term capital gain as the date of exercise of option and the date sale of shares was same. This issue is highly debatable as to whether date of acquisition of shares is to be reckoned from the date when the assessee exercised its option to acquire shares in pursuance to the rights vested in him by virtue of allotment of ESOP or from the date from which the right vested in him by allotment of ESOP entitling him to acquire the shares, which is also a capital asset. In this regard we may point out that there can be two views on this issue and, therefore, it cannot be said that assessee s action in returning the income as long term capital gain was illegal. The assessee had not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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