DY. COMMISSIONER OF INCOME TAX(IT)-3(1)(2), MUMBAI, MUMBAI vs. KUWAIT INVESTMENT AUTHORITY, MUMBAI

Whether on the facts of the case and in circumstances of the case and in law, the Id. CIT (Appeals) was right in placing reliance on judgment of non-jurisdictional High Court in the case of Bharti Gupta Ramola vs. CIT (20 taxmann.com 762(Del)) which has no binding precedence in view of judgment of Hon'ble jurisdictional High Court in the case of CIT Vs Thana Electricity Co Ltd [(1994) 206 ITR 727 (Bom)]?

Whether on the facts and in the circumstances of case, and in law, the Ld. CIT(A) has erred in treating the assessee as corporate entity instead of 'Non-corporate entity without appreciating the fact that the PAN of the assessee is obtained as a 'Trust' and not a 'Company'?

Whether on the facts and in the circumstances of case, and in law, the Ld. CIT(A) has erred in not appreciating the fact that the assessee itself has communicated that the assessee is a non-corporate entity due to which it does not hold DSC to file online Form 35?

Whether on the facts and in the circumstances of case, and in law, the Ld. CIT(A) has erred in not appreciating the fact that incorporation document available on the website of Kuwait Investment Authority does not stipulate that the assessee is a corporate entity?

Whether on the facts and in the circumstances of case, and in law, the Ld. CIT(A) has failed to appreciate the fact that the assessee itself has obtained the PAN meant for non-corporate entities including 'Trust' and the assessee is regularly filing return of income in the form ITR-5 stipulated for the entities other than 'Company'?

Whether on the facts and in the circumstances of case, and in law, the Ld. CIT(A) has failed to appreciate that every year is a separate and independent for the purpose of income-tax proceedings and is not bound by doctrine of res-judicata?

Whether on the facts and in the circumstances of case, and in law, the Ld. CIT(A) has erred in holding that the Assessing Officer was not in consistent with the stand taken in previous years without appreciating the fact that the impugned issue was never deliberated upon in any assessment proceedings and it is the assessee only who highlighted the issue in AY2008-09 by filing appeal before the ITAT pursuant to levy of higher tax due to change in surcharge rate for non-company entities which was higher in comparison to that of the company cases?

Whether on the facts and in the circumstances of case, and in law, the Ld. CIT(A) has erred in not appreciating the fact that the Assessing Officer has passed rectification order u/s.154 treating the assessee as company merely to comply with the order of Hon'ble ITAT in the assessee's case on the impugned issue and said decision was not accepted in principle by the Department?

Whether on the facts and in the circumstances of case, and in law, the Ld. CIT(A) has erred in not appreciating the fact that in context of filing of physical appeal for A.Y.2018-19 the assessee itself has communicated to the CIT(A) vide email dated 26.08.2021 that the assessee does not hold digital signature (DSC) as it is a non- corporate, non-resident taxpayer?

Whether on the facts and in the circumstances of case, and in law, the Ld. CIT(A) has erred in holding the status of assessee as non-resident corporate entity in contrary to the assessee's admission that it is non-corporate, non-resident taxpayer and that too when no cogent documentary evidence was produced by the assessee?

The Appellant prays that the order of the ld. CIT(A) on the above ground(s) be set aside and that of Assessing Officer be restored.

The Appellant craves leave to amend or alter any ground or add a new ground which may be necessary.” 4. The first grievance relates to the treatment of gains on sale of shares amounting to Rs.12,19,93,396/- as short term capital gain (STCG) instead of long term capital gain (LTCG). The underlying facts qua this issue are that during the course of scrutiny assessment proceedings, the AO noticed that the assessee has offered LTCG of Rs.12,19,93,396/- on sale of certain equity shares sold exactly after one year from purchase

We have given a thoughtful consideration to the orders of the authorities below. The entire quarrel revolves around the computation of capital gains which is as under:-

The Hon’ble Delhi High Court in the case of Bharti Gupta Ramole (supra), had the occasion to consider the identical grievance relevant to computation of holding period of asset and held as under:- “A careful examination of section 2(42A) would reveal that the transfer or sale is treated as a cut off point, to apply the test. The expression 'immediately preceding the date of transfer' is a cut off point for determining and deciding the period during which the asset was held by an assessee. The said expression does not and should not be interpreted to mean that the date of transfer itself should be added or excluded. [Para 8] The first part of section 2(42A) stipulates that if an asset is held for 36/12 months, it will be long-term capital asset. The term 'month' has not been defined in the Act and, therefore, one can rely upon the word 'calendar month' as defined in the General Clauses Act, 1897. Section 3(35) of the said Act defines a 'month' to mean a month reckoned according to the British calendar. In normal course, therefore, period of 12 calendar months would begin on the specified day when the asset was transferred and the assessee became the holder of the asset and would end one day before in the relevant calendar month, next year. Thus, if an assessee acquires an asset on 2nd January in a preceding year, the period of 12 months would be complete on 1st

The CBDT Circular No. 704 dated 28/04/1995, reads as under:- “22. Instructions regarding determination of the ‘date of transfer’ and holding period for purposes of capital gains qua transactions in securities 1. Under the provisions of clause (42A) of section 2 of the Income-tax Act, 1961, the shares held in a company or any other security listed in a recognised stock exchange in India or units of the Unit Trust of India or units of a mutual fund specified under section 10(23D) shall be regarded as short-term capital assets if they are held by an assessee for not more than 12 months immediately preceding the date of its transfer. Clarifications have been sought as to which date should be regarded as the date of transfer and also about the date from which the holding period of the securities should be reckoned. Clarifications have also been sought as to how the holding periods will be computed for the purposes of capital gains when the securities, purchased in I.T.A. No. 478/Mum/2024 I.T.A. No. 476/Mum/2024 7

The CBDT Circular No. 768 dated 24/06/1998, reads as under:- “420. Determination of “date of transfer” and the “period of holding of securities” held in dematerialised form under section 45(2A) qua transactions in securities 1. At present trading in securities is done through the physical movement of the scrips. Transactions are settled through the endorsement and delivery of the certificates which are also the proof of ownership of the security mentioned therein. This system is fought with many difficulties caused due to bad deliveries and loss of share certificates. In order to remove these difficulties faced by the investors, a system of holding securities in the electronic mode at the option of an investor has now been introduced in India. The object of this system is to eliminate problems which are normally associated with settlement through physical certificates, like tearing/mutilation of share certificates due to careless handling, loss of certificates by postal authorities or