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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 ..... ares of private limited companies would have to be construed as 36 months only. 2. The assessee had acquired the shares in November 1993 and sold the said shares in June 1996. Thus the period for which the shares were held is less than 36 months. However, the assessee claimed benefit under Section 2(14) of the Income Tax Act (hereinafter referred to as 'the Act' for brevity) claiming that the shares is a Long Term Capital Asset. All the three authorities have held that the period of holding from 36 months would apply in the case of shares that of a company listed in the Stock Exchange in India. The shares of the assessee are of private limited companies which are not listed in the Stock Exchange. Therefore, the period of holding of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ths" had been substituted.' 5. A bare reading of the aforesaid section makes it clear that a capital asset held by an assessee for not more than 36 months immediately preceding the date of transfer is treated as Short Term Capital Asset . It is not in dispute that the shares held in a company is a capital asset. Therefore, the only question that arises for consideration is: Whether the shares held by the assessee is a Short Term Capital Asset or a Long Term Capital Asset? 6. The proviso to the aforesaid provision makes it clear that the asset as set out in the proviso, if it is held for a period of 12 months, would be a Long Term Capital Asset. The first type of capital asset which stands out as an exception to the main rule is a sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vestment in the capital market. In order to provide such units and all the securities traded in the recognized stock exchanges a level playing field with company shares, the Finance Act has amended the provisions of section 2(42A) so that the maximum holding period for which such instruments are to be considered as short-term will be 12 months in the place of 36 months. In other words, such assets are to be considered long-term capital assets if they are held for more than 12 months. The expression "securities" will have the meaning assigned to it in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956. 16.3 This amendment takes effect from 1st April, 1995, and will, accordingly, apply in relation to assessment year 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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