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2023 (2) TMI 530 - DELHI HIGH COURTCorrect head of income - gain on sale of shares - LTCG or income from other sources - AO has treated the LTGC said to have been earned by the petitioner, as income from other sources, and, accordingly, brought it to tax u/s 56 - AO was of the view that mandatory steps for transfer of shares had not been taken by the petitioner i.e., the assessee AND no responses to notices being issued under Section 133(6) - HELD THAT:- The record shows that insofar as Mr. Pradeep Sharma [Petitioner shareholder] was concerned, the very same transaction, which involved almost the same number of shares and the same price, was accepted, and the said person was allowed to claim deduction/exemption under Section 54F - Furthermore, even in Mr. Pradeep Sharma’s case, consideration was received prior to the aforementioned execution of the sale purchase agreement. It seems. rather curious that, in the petitioner’s case, the AO has taken a decision that because part of the consideration was received before the agreement to sell, the income had to be treated as income from other sources, whereas in Mr. Pradeep Sharma’s case, the income earned was not only been offered for tax under the head “capital gains”, but deduction was also claimed under Section 54F of the Act; a position which was accepted by the respondent/ revenue. A perusal of the impugned assessment order does not reveal that, the fact that RTPL and ISL did not respond to the notices issued under Section 133(6) of the Act, was put to the petitioner. The least that the AO could have done is that he could have brought this aspect to the notice of the petitioner, who could then, perhaps, have them represented via their authorized representative before the AO. We are inclined to set aside the impugned order, with liberty to the AO to pass a fresh order after giving due opportunity to the petitioner. AO will issue a notice in this behalf to the petitioner, which would indicate the date and time, when hearing would be accorded in the matter.
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