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Ground of appeal relates to the cost of acquisition of shares of Bajaj Hindustan Limited released against cancellation of Global Depository Receipts (GDRs). As per the said scheme, the GDRs are listed on stock exchanges and can be purchased/possessed and freely transferred by a non-resident. As per paragraph 7 of the said Scheme, a non-resident holder of GDRs can transfer them or may ask the Overseas Depositary Bank to redeem them against the release of underlying shares. As per sub para (3) of paragraph 7 of the said Scheme, the cost of acquisition of shares underlying the GDRs shall be reckoned as the cost on the date on which the Overseas Depositary Bank advices the custodian bank for redemption. It further provides that the price of the ordinary shares of the company prevailing in the Bombay Stock Exchange or the National Stock Exchange on the date of advice of redemption shall be taken as the cost of acquisition of the underlying ordinary shares. In the facts of the present case, undoubtedly, the date of advice of redemption i.e. 11.04.2006 was a public holiday, hence, the BSE was closed. Therefore, the assessee considered the opening share price of Bajaj Hindustan Ltd. as on the next working day i.e. 12.04.2006 at Rs. 523.95 as the cost of acquisition/FMV. we hold that long term capital loss arising out of sale of shares cannot be set off against long term capital gain from shares subjected to STT and claimed exempt u/s. 10(38) of the Act. Accordingly, we direct the Assessing Officer to allow carry forward of long term capital loss as claimed by the assessee.

Shanti Prime Publication Pvt. Ltd.

Sec. 45 & 55(2) of Income Tax Act, 1961 — Capital Gain — Assessee filed appeal against the order of CIT(A). The assessee is an approved sub-account of the Master Trust Bank of Japan Limited, a FII registered with SEBI. The AO considering the fluctuating price of shares during the day, computed the Short term capital loss, which resulted in a difference of Rs. 1,19,10,000 between the Short term capital loss computed by the assessee and as determined by the Assessing Officer. Thus, this differential amount was considered for addition to the income of the assessee. There was no successee in the Appeal before CIT(A). Assessee raised the grounds basically relates to the cost of acquisition of shares of BHL released against cancellation of GDRs. ITAT allowed the appeal of the assessee and the ground holding that:- in absence of any specific mandate either in the statute or in the Scheme for adoption of weighted average price towards cost of acquisition/FMV, it cannot be adopted as cost of acquisition/FMV. Though, there is no specific provision in the Act providing for determination of cost of acquisition of underlying shares on redemption of GDRs, however, section 55(2)(ac) provides some insight on the matter. Accordingly, directed the AO to accept the short term capital loss computed by the assessee. - NOMURA INDIA INVESTMENT FUND MOTHER FUND Vs. ADDI. DIT - [2020] 203 TTJ 660 (ITAT-MUMBAI)