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2015 (3) TMI 141 - AT - Income TaxSale proceeds of shares - Income from Other Sources or Long term Capital gains - Held that:- As per the CBDT circular, referred earlier, the date of purchase of shares should be recognized as the date on which the broker has issued the contract notes. Hence, we are unable to agree with the view taken by the AO that the date of purchase should be considered as the date on which the shares were credited to Demat account. The undisputed fact remains that the assessees have opened the Demat account only subsequent to the date of purchase of shares. Hence, in the absence of a Demat account, one could have purchased the shares in physical form only. Though the assessee has furnished the details of purchases of shares, we notice that the AO has rejected them without examining them. This approach of the assessing officer, in our view, was not appreciable at all. When the assessees are furnishing the necessary details available with them and if the AO feels that they are not reliable then he should have conducted further investigation and brought any other material on record to disprove the claims put forth by the assessees. However, the AO has taken adverse inferences against the assessees without causing further examination of the materials furnished by the assessees. Further, we are aware that there is no compulsion under any law that the shares should be held only in Demat account form only. As per the trade practice, in our knowledge, the broker is liable to deliver the shares which were purchased on behalf of the clients and in this connection only the broker contract notes are issued. We further notice that the submissions of the assessees that the shares were in the possession of the broker were also rejected without making further examination. There was no credible material with the department to disprove the claim of Long term Capital gains made by these assessees in their respective returns of income. Accordingly we set aside the orders of Ld CIT(A) passed in the respective hands of the assessees herein on this issue and direct the assessing officer to delete the assessment of gross sale receipts as income from other sources in all the years under consideration and accordingly direct the AO to accept the LTCG declared by these assessees in all the years under consideration. Since we have upheld the disclosure of LTCG, the question of assessing 5% of the Gross sale receipts as unaccounted income of assessees does not arise. Accordingly, we set aside the orders of ld CIT(A) on this issue and direct the assessing officer to delete this addition in the hands of all the assessees in all the assessment years under consideration. - Decided in favour of assessee.
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