JP Morgan Funds v. DCIT(IT) (2022) 196 ITD 114 / 219 TTJ 364 / 217 DTR 225 (Mum.)(Trib.)

S. 48 : Capital gains-Computation-Debentures of company-Bonus debentures-Reinvested-Reinvested out of dividend would be considered as cost of acquisition of debentures. [S. 2(22)]

The assessee was allotted debentures of company, Blue Dart Express Ltd  in respect of which cost of acquisition was claimed by assessee. Assessing Officer denied the  claim on ground that cost of acquisition of these debenture would be taken as NIL because these were bonus debentures and assessee had not incurred any cost for its acquisition.  CIT(A)  held that debentures were in nature of dividend and cost of acquisition was to be treated as Nil while computing capital gain arising from sale of these debentures. Held that  debentures were allotted to assessee in consideration of dividend which was received by merchant banker on behalf of assessee and was reinvested in debentures issued by company,  thus, amount reinvested out of dividend in debentures would be considered as cost of acquisition of said debentures.  (AY. 2015-16)