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TMI Blog2014 (12) TMI 841X X X X Extracts X X X X X X X X Extracts X X X X ..... to be a Short Term Capital Asset and it becomes a Long Terms Capital Asset - the authorities have not kept this distinction in mind - They have misread the Section resulting in the interpretation which they have placed - the interpretation is contrary to the express words used in the statutory provision which runs counter to the intent behind the provision – thus, the order of the Tribunal is set aside and the assessee is entitled to the benefit of her capital asset being treated as Long Term Capital Asset – Decided in favour of assessee. - IT APPEAL NO. 799 OF 2008 - - - Dated:- 16-9-2014 - N. KUMAR AND MRS. RATHNAKALA, JJ. For The Appellant : A. Shankar and M. Lava, Advocate For The Respondent : K.V. Aravind, Advocate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat shares of a private limited company held for more than 12 months and less than 36 months cannot be considered as long term capital asset? 2. Whether the Tribunal was justified in holding that the shares of a private limited company are not covered within the ambit of proviso to Section 2(42A) of the Income Tax Act? 3. Whether the Tribunal was justified in confirming interest imposed under Section 234A and Section 234B of the Act on the fact and circumstances of the case? 4. Section 2 (42A) of the Act defines Short Term Capital Asset as under: 'Short-term capital asset means a capital asset held by an assessee for not more than thirty-six month immediately preceding the date of its transfer. Provided that in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excluding shares listed in a recognized Stock Exchange in India, if it is held for a period of 12 months, is also held to be a Long Term Capital Asset. 7. In this context, it is useful to refer to the C.B.D.T. Circular bearing No.684, dated 10th June, 1994 at paras 16, 16.2 and 16.3: '16. Long-term capital assets enjoy certain tax concessions vis- -vis., short term capital assets. The income-tax Act defines long-term capital assets as those assets which are not short-term. Short-term capital assets are those capital assets which are held for a period of up to 36 months. However, the Finance Act, 1987, through an amendment to the provisions of section 2(42A), reduced the maximum period of holding in respect of company shares from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and it becomes a Long Terms Capital Asset. The authorities have not kept this distinction in mind. They have misread the Section resulting in the interpretation which they have placed. The said interpretation is contrary to the express words used in the statutory provision which runs counter to the intent behind the said provision. Therefore, the findings recorded by the authorities are unsustainable and accordingly, the impugned orders are set aside. The substantial questions of law are answered in favour of the assessee and against the revenue. Accordingly, we pass the following: ORDER (a) Appeal is allowed; (b) The impugned orders are set aside; (c) The assessee is entitled to the benefit of her capital asset being treated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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