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2015 (10) TMI 1871 - AT - Income TaxProfit arising out of sale of shares - AO treated it as undisclosed short term capital gain confirmed by CIT(A) - Held that:- The entire premise of the lower authorities i.e. AO and the CIT(A) for treating the assessee’s long term capital gains as short term capital gains for the reason that the payment for purchase of shares was made after dematerialization of shares. We find that the AO as well as CIT(A) admitted that these shares have been transferred in the DEMAT Account of the assessee on 03.10.2005, which is a categorical finding of the AO. Only the payment is made after the transaction of the shares to DEMAT Account on or after 03.10.2005. We find that the brokers have given contract notes for purchase of these shares dated 16.06.2004 and transferred in the name of the assessee on 23.08.2005. What is the material date for date of transaction here by way of contract note the shares were purchased on 16.06.2004 and i.e. the date to be reckoned for taking transaction of shares and if that date is taken as transfer date the shares are sold on 14.02.2006 which is more than 12 months. Once the shares are held by assessee for more than 12 months, the profit arising out of the same is to be assessed as LTCG. Accordingly, we allow the appeal of the assessee and reverse the orders of the lower authorities. The AO will assess the profit arising out of the sale of shares as LTCG. Decided in favour of assessee.
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