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2016 (1) TMI 705 - ITAT MUMBAI

2016 (1) TMI 705 - ITAT MUMBAI - TMI - Purchase and sale of shares - ingenuity of transactions - claim of long term capital gains by assessee - CIT(A) allowed the claim - Held that:- The assessee had duly furnished the evidence of purchase and sale of shares and the long term capital gain earned therefrom. No discrepancy has been brought out by the ld. D.R. in relation to the share transactions done by the assessee with M/s Database Finance Ltd. We, therefore, do not find any infirmity in the or .....

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holding that the transactions of purchase and sale of shares done by the assessee in relation to the shares of Database Finance Ltd. as genuine and thereby allowing the claim of long term capital gains to the assessee in relation to the said transaction. 3. Brief facts of the case are that during the assessment proceedings, the A.O. noted that the assessee had earned long term capital gain of ₹ 1,27,34,279/-. He asked the assesee to furnish the details in this respect. The assessee explain .....

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gainst the payment due from the broker, however, the A.O. was not satisfied with the said explanation of the assessee. He also reported the statement of Smt. Rupi V. Chinoy, Director of the assessee company and asked her to furnish the proof of payment for the purchase of shares of M/s Database Finance Ltd. The said Director reiterated the earlier submissions. However, the A.O. held that since the assessee could not furnish the proof of payment of consideration for the purchase of shares, hence, .....

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efore him. The ld. CIT(A) after considering the submission and going through the evidences, which were also furnished before the A.O., observed that the assessee had filed copy of the broker's bill showing the transaction about the purchase of shares of M/s Database Finance Ltd. The certificate from the broker regarding the transaction of the said shares in favour of the assesse was also filed. The distinctive number of shares were also mentioned. The ld. CIT(A) observed that the broker' .....

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roker's sale note was dated 4.4.2001, hence, the ld. CIT(A) observed that it was clear from the said evidences that the amount was due to be received from the broker and hence the purchase value of shares of M/s Database Finance Ltd. was adjusted against the sale proceeds of shares as due from the broker and the necessary entries to this effect had also been made in the books of account. The ld. CIT(A) further observed that the shares purchased by the assessee of M/s Database Finance Ltd. we .....

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and sale of shares in question were not genuine, especially when the other transactions of purchase and sale of shares relating to other companies on the basis of broker's note has been considered as genuine by the A.O. He, therefore, held that the A.O. was not justified in his action to treat the aforesaid transaction as non-genuine by the A.O. He, accordingly, deleted the addition made by the A.O. by holding that the income earned by the assessee from the sale of shares of M/s Database Fin .....

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furnished proof of payment of consideration for the purchase of shares. However, the ld. CIT(A) after appreciating the evidence filed by the assessee has given a categorical finding that prior to the purchase of shares in question, the assessee had sold shares of some other company through the same broker and the sale proceeds of the said shares were due to be paid by the said broker to the assessee company. The assessee had adjusted the said amount with the purchase price of the sahres of M/s .....

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