It has been held by the appellate tribunal that Government securities which were sold during the instant year were stocks being of the nature described in clause (i) of section 2(a) of the Public Debt Act, 1944. Debenture includes bond but it does not include Government securities. One of the fundamental differences between “debenture” and “Government securities” is that “debentures” are issued by a company whereas “Government securities” are issued by the Central or State Governments and not by any other authority or legal entity. The Government had itself adopted a different nomenclature and definition for “bonds” and “Government securities”. The appellate authority had not discussed any of the contentions of the assessee claiming that Government securities were not bonds and debentures. The CIT (A) had not explained how Government securities were bonds and debentures. Government securities are not excluded for indexation benefit. Only bonds or debentures were included in the third proviso to S.48 of the Act. Government securities are entitled to indexation benefits. Government securities are different from bond and debenture for the purpose of the third proviso to S.48 (fourth proviso after amendment) and therefore the benefit of indexation should be granted to the assessee on the redemption of these Government securities. (AY. 2010-11)