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November 2025

Even if assessee did not pay STT at the time of acquisition of shares which were unlisted then, it would still be eligible for tax exemption under section 10(38).

By Jagdish T Punjabi, Chartered Accountant Devendra Jain & Aditya Bhatt, Advocates
Reading Time 3 mins

58. [2025] 123 ITR(T) 252 (Mumbai Trib.)

Deputy Commissioner of Income-tax vs. Business Excellence Trust

ITA -2879 (Mum.) of 2023 and

CO. No. 15 (Mum.) of 2024 AY 2018-19

Section 10(38) Date: 26.07.2024

Even if assessee did not pay STT at the time of acquisition of shares which were unlisted then, it would still be eligible for tax exemption under section 10(38).

HELD

The assessee, a trust registered as a Venture Capital Fund, earned Long-Term Capital Gain (LTCG) of ₹247,67,03,531/- from the sale of shares of M/s Dixon Technologies Limited. The said shares were purchased while the company was unlisted and sale of the shares took place after listing of the said company. Initially, the assessee claimed exemption for this LTCG under section 10(23FB) of the Act. The Ld. AO rejected the claim for exemption under section 10(23FB) of the Act.

The assessee made an alternative plea that the LTCG should be exempted under section 10(38) of the Act. The AO rejected the alternative claim for exemption under section 10(38), reasoning that firstly th

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