Capital gains

Short-term or long-term capital gains — A gain arising on the sale of shares granted under stock options is taxable as short-term capital gains, as held by MumTrib in ACIT v Pramod H Lele — In favour of: The revenue.

The date on which the option to buy the shares is granted cannot be treated as the “date of acquisition of shares”.

Precedent — A decision which is rendered in ignorance of an earlier decision of a coordinate bench of equal strength “which covered the case before it” does not have precedent value.

Decided on: 10 August 2011.