COMMISSIONER OF INCOME TAX Vs. JASWINDER SINGH AHUJA

JUDGEMENT

(1.) This appeal under section 260A of the Income Tax Act, 1961 (hereinafter referred to as "the said Act?) has been preferred by the revenue being aggrieved by the order dated 25.06.2012 passed by the Income Tax Appellate Tribunal in ITA No.3417/Del/2009 pertaining to the assessment year 2002-03. The present proceedings arose out of the penalty order passed by the assessing officer under section 271(1)(c) of the said Act on 24.06.2010.

(2.) The facts are that the respondent/ assessee was employed with M/s Cadence Design Systems India Pvt. Ltd. and as a part of his employment he received stock options by virtue of an agreement dated 17.09.1992 with Cadence Designs System, USA. During the year in question the assessee sold the stock options and received Rs. 1,05,19,631/-. The same was declared by the respondent/ assessee in his return as long term capital gains. However, the assessing officer took a different view and assessed the same as short term capital gains and also directed initiation of penalty proceedings under section 271(1)(c) of the said Act.

(3.) In the quantum proceedings the Commissioner of Income Tax (Appeals) deleted the addition made by the assessing officer on account of the change in treatment from long term capital gains to short term gains. The revenue went up in appeal before the Tribunal and the Tribunal allowed the appeals and upheld the view taken by the assessing officer. In other words the Tribunal settled the issue with regard to the manner in which the gains from the sale of stock options were to be considered. The Tribunal reversed the view taken by the Commissioner of Income Tax (Appeals) and held that the said gains were short term capital gains as held by the assessing officer.