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2015 (9) TMI 648 - ITAT AHMEDABAD

2015 (9) TMI 648 - ITAT AHMEDABAD - TMI - Short term capital gains in view of the SEBIís disgorging order - CIT(A)ís action challenged upholding assessment as short term capital gains on account of profits derived from sale of shares despite the fact that the same stood appropriated in SEBIís favour - Held that:- From the findings of the SEBI, it is implicit clear that both the assessees have indulged in violation of SEBI regulations, while making investments in IPOs. Whatever amounts they have .....

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additional grounds of appeal on the strength of the SEBI order. Therefore, we find force in the contentions of the Id. Counsel for the assessee that ultimately no income has resulted to the assessees, out of these share transactions. See Monal Thappar vs. ACIT [2015 (7) TMI 913 - ITAT AHMEDABAD] - Decided in favour of assessee. - ITA No. 1551/Ahd/2011 - Dated:- 26-8-2015 - Shri G. D. Agrawal and Shri S. S. Godara, JJ. For The Revenue : Shri Vilas Shinde, Sr. D.R. For The Assessee : Shri Vilas Sh .....

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that the same stood appropriated in SEBI s favour. The assessee-individual filed her return on 31/07/2007. She had sold 44,362/- shares of Nissan Copper Limited through a broker for ₹ 57,47,11.4/- resulting in the impugned profits. Her case throughout has been that the abovestated consideration was not received as per SEBI s impounding instructions. She would incorporate a note along with return duly clarifying all of the SEBI s proceedings praying that if the same go against her, necessa .....

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ave considered the facts of the case, assessment order and appellant's submission. Appellant disclosed capital gain on sale of shares of Nissan copper Ltd. The shares were purchased and sold during the year through share broker from stock exchange. Broker has issued contract notes and bills for such transactions. In view of these evidences, it is clear that capital asset in the form of shares were purchased and sold during the year and accordingly the difference is liable for capital gain ta .....

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rder in 2009 in which consent application of the appellant was accepted. In the said consent application, appellant agreed to transfer the amount withheld to Sebi towards settlement charges. Therefore it is clear that appellant voluntarily transferred the withheld money to Sebi. The transactions were not declared null and void by the Sebi and as such purchase and sale of shares are valid and not held to be illegal by the Sebi. In the light of above facts, it is clear that appellant earned capita .....

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bi has not passed any order by which the appellant's transactions were held to be illegal or null and void. Accordingly the capital gain resulting out of purchases and sale of shares was correctly offered for tax by the appellant and assessing officer has correctly taxed the same. There is no necessity for assessing officer to deal with each and every note written by assessees in computation of income. Since capital gain accrued to the appellant during this year, the same was taxable in asse .....

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unambiguous. In view of this the submission of the appellant is not of any help. Accordingly this ground of the appellant is rejected. In the final result appeal is dismissed. 4. We have heard both the parties and gone through case file. The assessees strongly argues against taxation of her short term capital gains in view of the SEBI s disgorging order. The Revenue s case in the light of Commissioner of Income Tax(A) s order is that the same arose in succeeding assessment years only which is no .....

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under the head "capital gains" or "business income" ? (b) Whether after disgorgement of ₹ 30,98,785/- by Smt. Reetaben R. Thakkar and ₹ 29,17,331/- by Shri Monal Y. Thakkar, no amounts left in their hands, therefore, whether the income to this extend is to be assessed in the hands of both these assessees, either under the head "business income" or under the head "capital gains" ? x x x x x x x x x x x x x x x x x x 13. The Id. counsel for the .....

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n the Asstt.Year 2006-07. He further contended that capital gain is assessed under the head "business income" by the Id. CIT(A). Consequently, loss on account of repayment of this income to the SEBI is to be allowed to the assessees. The payment has been made in the Asstt.Year 2009-10, therefore, this amount is to be allowed to the assessees in the Asstt.Year 2009-10. 14. As far as the settlement charges are concerned, he contended that payment was not .made for violation of any law. I .....

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es below. She contended that SEBI order was passed after the end of the accounting period, and therefore, before the SEBI order, the income had resulted to both the assessees. Assessees have made investment of ₹ 4 crores and ₹ 2.8 crores by financing benami investors. This shows their modus operandi and how they have undertaken the activity in an organized manner. It is to be assessed as business income. She further contended that as far as settlement charges are concerned, these are .....

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