Facts:
a) The assessee invested certain amount in mutual fund units of HSBC and earned long-term capital gain on its redemption. He had not declared the said long-term capital gain in the return of income.
b) During the course of assessment proceedings, it offered to pay tax on the long-term capital gain (LTCG). The Assessing Oicer (AO) added LTCG and brought it to tax at special rate of 20 per cent without giving the benefit of cost inflation indexation.
c) Commissioner (Appeals) upheld the addition made by the AO. He further held that since the assessee had not disclosed the long-term capital gain in the return of income filed, AO was free to adopt either method with or without applying cost inflation index, whichever is favourable to revenue.
d) Aggrieved-assessee filed instant appeal before the tribunal.
Tribunal held in favour of assessee as under
1) As per section 112(1)(a), any income arising to an individual from transfer of long-term capital asset is chargeable at the rate of 20% after allowing the benefit of the cost inflation indexation as provided in the second proviso to section 48. However, with respect to the income arising from the transfer of listed securities or units or zero coupon bonds, it shall be chargeable at the rate of 10% without applying cost inflation index.
