Share transferred by promoters before listing not eligible for exemption U/s. 10(38)

PrintPDF

HIGH COURT OF DELHI

Uday Punj

v.

Commissioner of Income-tax

IT APPEAL NO. 183 OF 2012

JULY 9, 2012

Yet another issue involved in this appeal is as to whether the capital gain tax, in this case, would be leviable at the normal rate of 20% or at the rate of 10%. Admittedly, capital gain tax at the rate of 10% was payable only in case of ‘listed securities’. Since, these shares had been transferred to the applicants in the public offer, by 5.1.2006 before they were actually listed on the stock exchanges on 6.1.2006, they were not ‘listed securities’ at the time of sale by the appellant and consequently, the transaction would not be eligible for payment of capital gain tax at the lower rate of 10%.