COMPUTATION OF CAPITAL GAINS ON PCDs

The Supreme Court allowed the appeal, Navin Jindal Vs Assistant Commissioner of Income Tax, deciding the issue whether the loss on renunciation of right to subscribe to Partly Convertible Debenture (PCDs) is short-term capital loss or long-term capital loss in the light of Section 48(2) of the Income Tax Act. A number of assessees in a similar situation argued that it was shot-term capital loss, while the revenue authorities maintained that it was long-term capital loss. The Supreme Court ruled that nature of the loss in the concerned transactions should be considered as short-term loss.