9911796707
TMI Blog2018 (1) TMI 1607X X X X Extracts X X X X X X X X Extracts X X X X ..... ,696/- on which he paid tax at the rate of 10%. It seems assessee had applied the rate of 10% based on Section 111A of the Income Tax Act, 1961 (in short ''the Act''). However, ld. Assessing Officer was of the opinion that transaction statement of M/s. Stock Holding Corporation of India Ltd, furnished by the assessee, reflected purchase and sale of shares in one M/s. Accel Frontline Ltd on 19.04.2007, 20.04.2007, 24.04.2007 and 25.04.2007. As per the ld. Assessing Officer, assessee had certain other share transactions also done, through Rolling Market Lot and Inter Depository Transfers. Ld. Assessing Officer noted that some of these transactions had taken place on the very same day or within a short span of three to four days. According to him, assessee's claim of STCG could be considered only if the period of holding of shares was ascertainable. Further according to him, assessee could not show that the sum of @71,85,696/- shown by it as short term capital gains was correct. As per the ld. Assessing Officer, whether the transactions giving rise to the surplus related to any investments required verification. He thus held that assessee could not claim concessional tax of 10% on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the rate of fifteen per cent. ; and (ii) the amount of income-tax payable on the balance amount of the total income as if such balance amount were the total income of the assessee : Provided that in the case of an individual or a Hindu undivided family, being a resident, where the total income as reduced by such short-term capital gains is below the maximum amount which is not chargeable to income-tax, then, such short-term capital gains shall be reduced by the amount by which the total income as so reduced falls short of the maximum amount which is not chargeable to income-tax and the tax on the balance of such short-term capital gains shall be computed at the rate of ten per cent. (2) Where the gross total income of an assessee includes any short-term capital gains referred to in sub-section (1), the deduction under Chapter VI-A shall be allowed from the gross total income as reduced by such capital gains. (3) Where the total income of an assessee includes any short-term capital gains referred to in sub-section (1), the rebate under section 88 shall be allowed from the income-tax on the total income as reduced by such capital gains'''. We find that none of the lower a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by them, in accordance with Rule 12C of Income Tax Rules, 1962, had advised what was the share of income of the assessee, which accrued during the relevant previous year. Thus, according to him, assessee was eligible for the claim on accrual basis as certified by the Venture Capital Fund. Ld. Commissioner of Income Tax (Appeals), agreed with the above contentions of the assessee. According to him, assessee was justified in showing the income from its investment through Venture Capital Fund on accrual basis since assessee was all along following such accounting method in earlier years and ld. Assessing Officer had accepted such method. Ld. Commissioner of Income Tax (Appeals) directed the ld. Assessing Officer to allow the claim of the assessee. 12. Now before us, ld. Departmental Representative strongly assailing the order of the ld. Commissioner of Income Tax (Appeals) submitted that Sec. 115U r.w.s.10(23FB) of the Act was introduced on 01.04.2001 prior to the introduction of Sec.10(38) of the Act which came into statute only on 01.04.2005. As per the ld. Departmental Representative from 01.04.2005 there was no exemption available for such transactions, since Securities Transacti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fund under this chapter. The case of the Revenue is that assessee could not have accounted income on accrual basis and income of Venture Capital Fund could be considered u/s.10(23FB) of the Act only if such Venture Capital Fund was granted a registration and regulated under Securities and Exchange Board of India (Venture Capital Funds) Regulations, 1996. 15. A reading of the Sub Section (1) of Sec. 115U of the Act clearly indicate that income accruing or arising or received by any person out of investments made by him in a Venture Capital Fund has to be treated on par with investments directly made by such Venture capital undertaking. Once the deeming provision comes into play, in our opinion it has to be given full effect. Section 10(23FB) of the Act gives exemption for income of a Venture Capital Fund if certain conditions are satisfied. Said Section reproduced hereunder:- '' In Computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included:- (1)................. (2)............... (3)................. 23(FB) any income of a venture capital company or venture capital fund set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liance with Securities and Exchange Board of India (Venture Capital Funds) Regulations, 1996 has not been established, what we find is that form No.64 specified in Rule 12C which is to be furnished by the Venture Capital Fund was filed by the assessee. Said Form 64 by necessary implication means that at the Venture Capital Fund had complied with the conditions set out in Explanation (1) to Section 10(23FB). Ld. Assessing Officer did not find anything wrong in the said form No.64 which is the Form set out by the Rules under sub-section 2 of Section 115U of the Act. We cannot also say that the income which is exempt u/s.10(23FB) of the Act had to be considered on receipt basis and not on accrual basis since Section 115U of the act takes within its ambit accrued income also. Ld. Commissioner of Income Tax (Appeals) in our opinion was justified in allowing the claim of the assessee u/s.10(23FB) of the Act read alongwith Section 115U of the Act. We do not find any reason to interfere with the order of the ld. Commissioner of Income Tax (Appeals). 16. In the result, appeal of the assessee is partly allowed for statistical purposes, whereas that of Revenue is dismissed. Order pron ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
