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2022 (5) TMI 948 - ITAT PUNEAllowability of exemption on long term capital gains u/s 10(38) - characterization of the securities sold i.e. investments converted into stock-in-trade - difference between the market value of the investments as on date of conversion - HELD THAT:- There is no dispute with regard to the computation of capital gains under the provisions of section 45(2) - The dispute is only with regard to the characterization of the securities sold i.e. investments converted into stock-in-trade. The fact that the securities are held as investments prior to conversion as on 30.11.2007 subsequent to the conversion of such investments into stock-in-trade as on 30.11.2007 is also undisputed. From reading of the assessment order, it appears that the AO was under-impression that the Commissioner of Income Tax-II, Nashik in the order of revision held that the assessee was not eligible for exemption u/s 10(38), as mere reading of the order of revision, it would clearly indicate that it is open remained before the Assessing Officer as free to examine of the issue de-novo on merits. Therefore, the ld. CIT(A) rightly held that the respondent-assessee is entitled to the exemption on capital gains u/s 10(38) as claimed by the respondent-assessee. Thus, we do not find any illegality in the order of the ld. CIT(A). Therefore, we do not find merits in the grounds of appeal raised by the Revenue. Accordingly, the grounds of appeal raised by the Revenue stand dismissed.
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