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(PER : HONOURABLE MR. JUSTICE ASHUTOSH SHASTRI)

1. The present appeal is filed under Section 260A of the Income Tax Act, 1961, challenging the decision delivered by the Income Tax Appellate Tribunal in ITA No. 154/Ahd/2002 in respect of assessment year 1993-94. 1.1. The brief background of the facts leading to the rise of present appeal : appellant, Deepak Nitrite Limited was holding the shares of M/s Deepak Fertilisers and Petrochemicals Ltd. (hereafter referred to as "Deepak Fertilisers" in short). Initially the Deepak Fertilisers issued partly convertible debentures of Rs.100/- on right basis to its share holders. Each debenture of Rs.100/- C/TAXAP/1653/2007 CAV JUDGMENT DATED: 12/01/2023 was consisting of 3 parts, part A, B and C with a detachable warrant in the following manner :-

3. The assessment year concerned here is the year 1993-94, the appellant i.e. Deepak Nitrite limited sold these warrants on 09.09.1992 at Rs.8.98/- and secured Rs.1,03,27,000/- as sale price. The Assessing Officer held that entire sale price is liable to be taxed as a long term capital gain without appellant being entitled to any deduction by way of cost or expense therefrom and the stand of the appellant came to be rejected relying upon the decision of Tribunal in ITA No.458/Ahd/1993, which is pending in reference before the High Court being I.T.R. No.66 of 1998 and as such, held that valuation of cost of this detachable warrant must be Rs.2.175/-. C/TAXAP/1653/2007 CAV JUDGMENT DATED: 12/01/2023

12. At this stage, the decision which has been cited by the learned advocate Mr. Shah for the appellant of Deepak Nitrite Limited itself reported in [2008] 307 ITR 289 (Guj) when perused would indicate the background of facts, if taken note of, said decision may not be of any C/TAXAP/1653/2007 CAV JUDGMENT DATED: 12/01/2023 assistance to the appellant. Firstly, the transaction of the assessee, in that case, was genuine or not was center of controversy and secondly, contention was raised whether detachable warrant had any cost or not, but that appears to be not the controversy between the parties and as such, the High Court felt that it was not sufficient for the Tribunal to embark upon such an exercise in the absence of any controversy being raised. Hence, the said judgment when taken in its entirety, especially paragraphs 7 and 8 and the observations contained therein would indicate that decision would not be of any assistance to the appellant and principles enunciated therein cannot be applied as a straight-jacket formula by divorcing the facts.