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2015 (7) TMI 766 - ITAT MUMBAI

2015 (7) TMI 766 - ITAT MUMBAI - TMI - Computation of long-term-capital-gains - contention raised by the Department is that purchase date should be treated from the date of dematerialization i.e. when the shares were entered into Dímat Account - Held that:- Before the CIT(A), the assessee have contended that the shares of M/s. Buniyaad Chemicals Ltd. were transferred in the name of the assessee in April, 2001. This fact is also supported by certificate/letter dated 1st April, 2001 issued by M/s. .....

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shares after June, 2002 is nothing but longterm- capital-gain, therefore, treating the gain on sale of shares as short-term-capital-gain by the AO as well as CIT(A) is not correct. The other observations that the source of purchase out of speculation profit is not proved may not be very significant as ultimately nothing has been brought on record as the shares were purchased only in the month of April, 2002 and transfer certificate by the company is not genuine. Accordingly, on merits itself we .....

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s. 147 for the assessment year 2003-04 on the following grounds: 1. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in confirming the action of Learned Assessing Officer in reopening the case, without considering the provision of law. 2. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in confirming the action of Learned Assessing Officer in treating the Long Term Capital Gain of ₹ 12,01,513/- earned on ac .....

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the case of Mukesh Chokshi and his group of companies, it came to surface that the said companies were engaged in the business of providing accommodation entries to various persons to book bogus capital gains. The Assessing Officer after receiving the information from the Investigation Wing that the assessee is one of the parties, who had sold the shares of M/s Buniyaad Chemicals Ltd. through Mr. Mukesh Chokshi s companies, reopened the case u/s 147 by issuance of notice u/s 148, after recording .....

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e of search and seizure action u/s 132 of the I.T.Act,1961 carried out in the premises of M/s Mahasagar Securities (P) Ltd. (Now M/s Alag Securities (P) Ltd.) group of concerns and persons on 25.11.2009, it has come to the notice of this office, from the ledger copy of the account of the assessee for the period 1.4.2002 31.3.2002, that the assessee has sold 21000 shares Buriyad Chemicals on 27.4.2002, 23.04.2002 and 24.3.2002 and purchased 9500 shares of Talent Infoways Ltd. on 4.03.2003, The sa .....

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Officer enquired the assesee to explain the mode of purchase of shares of M/s Buniyaad Chemicals Ltd., however, the assessee submitted that the same was adjusted against the speculation profit on or before the purchase of shares. The AO noted that the assessee could not submit the contract notes and the details showing the earning of speculative profit and no evidence could be furnished as to how the purchase price was paid. The AO treated the said long-term-capital-gain as shortterm- capital-ga .....

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vey conducted in the premises of Mr. Mukesh Chokshi, the said person has stated on oath u/s 131 of the Act that he was engaged in giving accommodation bills to book Long term capital gains. It was also noticed that the appellant was one of the beneficiaries as per the books of Mr. Mukesh Chokshi. In other words, the information was emanating from one of the parties involved in the impugned transactions and therefore, the statement of Mr. Mukesh Chokshi cannot be regarded as a third party stateme .....

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able on record was that the appellant has got the impugned shares dematerialized with NSDL on 4.4.2002. There was no information of any sort for the period prior to this date. Secondly, there was also no evidence produced as to the actual purchase price paid for acquiring these shares. The appellant has filed copy of her bank statement in Bank of Baroda which reflects the payments received by her on sale of shares and therefore, the aforesaid material is not relevant to find out either the date .....

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ares. Mere offering of income from speculation profit does not lead the appellant anywhere. In the essence there is no evidence placed either before the AO or before me as to the date and price of purchasing the impugned shares. In the above background the AO was perfectly right in treating the aforesaid transaction as short term in nature and bringing the STCG to tax. I do not find any infirmity in the assessment order. Appellant fails on this ground . Such an action of the AO has been confirme .....

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there is no income escaping assessment; Secondly, section 149 provides that if the notice u/s 148 is issued after the period of 4 years from the end of the relevant assessment year then income chargeable to tax which has escaped assessment should be ₹ 1 lakh or more. Here, in this case, the income chargeable to tax which has escaped assessment is nil and only difference is in the rate of tax. Section 147 envisages that income chargeable to tax must have escaped assessment and in this case .....

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in reasons recorded are not based on correct appreciation of facts; Lastly, he submitted that simply relying upon statement recorded u/s 131 of the Third Party, cannot form the basis for entertaining the reason to believe for reopening the case. 5. On merits, Ld. Counsel submitted that there is no dispute regarding sale of shares and also purchase of shares. The only dispute which has been raised by the Assessing Officer is that purchases have not been done in the year 2001 but in the year 2002, .....

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essee has established that the shares were duly transferred in the name of the assessee in April, 2001 itself, therefore, the sale made after the expiry of one year is to be treated as long-term-capital-gains. 6. On the other hand, the Ld. DR strongly relied upon the order of the CIT(A) and submitted that assessee has failed to prove the purchase in the year 2001. 7. We have considered the rival submissions and also the relevant material placed on record. On the perusal of the records and the as .....

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