| COURT: | ITAT Mumbai |
| CORAM: | Mahavir Singh (JM), N. K. Pradhan (AM) |
| SECTION(S): | 2(47), 45, 48 |
| GENRE: | Domestic Tax |
| CATCH WORDS: | capital gains, transfer, transfer of preference shares to equity shares |
| COUNSEL: | Jeet Kamdar, P.J. Pardiwalla |
| DATE: | November 9, 2018 (Date of pronouncement) |
| DATE: | November 21, 2018 (Date of publication) |
| AY: | 2012-13 |
| FILE: | Click here to view full post with file download link |
| CITATION: | |
| S. 2(47) Transfer: Law on whether conversion of preference shares into equity shares constitutes a "transfer" and whether capital gains can be assessed on the basis of the market value of the equity shares explained (Santosh L. Chowgule 234 ITR 787 (Bom) & Trustees of H.E.H. The Nizam 102 ITR 248 (AP) distinguished. CBDT Circular dated 12.05.1984 referred | |
Where one type of shares is converted into another type of share (including conversion of debentures into equity shares), there is, in fact, no “transfer” of a capital asset within the meaning of section 2(47) of the Income Tax Act, 1961. Hence, any profits derived from such conversion are not liable to capital gains tax under section 45(1) of the Act. However, when such newly converted share is actually transferred at a later date, the cost of acquisition of such share for the purpose of computing the capital gains shall be calculated with reference to the cost of the acquisition of the original share of stock from which it is derived
Recent Comments