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2016 (8) TMI 766 - BOMBAY HIGH COURT

2016 (8) TMI 766 - BOMBAY HIGH COURT - TMI - Long Term Capital Gain - what is the cost of acquisition of 1665 shares in Yashomal Leasing and Finance (P) Ltd. (now merged in Lavasa Corporation Ltd.) which have been admittedly sold by the respondent assessee along with other preference shares during the subject assessment year for the purpose of computing the capital gains - Held that:- The fact that Mr. and Mrs.Bhale, the vendors of 1665 shares to the respondent assessee had not disclosed the .....

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ficer completely ignored the confirmation letter given by vendors of 1665 shares. Further fact that the respondent assessee had paid the consideration for the sale of 1665 shares by account payee cheques is also significant. It is also pertinent to note that before the Tribunal the grievance of the revenue is that the CIT (A) has accepted explanation of the respondent assessee. It has been correctly observed by the Tribunal that the explanation given by any party has to be taken into conside .....

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ng of fact arrived at by the CIT(A) and the Tribunal are perverse. The view taken by both authorities on the basis of evidence and explanation made available before them was a possible and reasonable view. - In the above view the question as posed for our consideration does not give rise to any substantial question of law. - Income Tax Appeal No. 300 of 2014 - Dated:- 2-8-2016 - M. S. Sanklecha And A. K. Menon , JJ. Mr. A.R. Malhotra with Mr.N.A. Kazi for the appellant Mr. J.D. Mistri, Senio .....

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owing the claim of Long Term Capital Gain ignoring the fact that the cost of Acquisition of Shares was not proved by the assessee for claim for total purchase of 1665 shares of M/s.Lavassa Corporation Limited before claiming Long Term Capital Gain ? (ii) Whether, on the facts and the circumstances of the case and in law, the Tribunal was justified in directing the Assessing Officer to allow the claim of assessee regarding the sale of shares of M/s.Lavassa Corporation Ltd. without appreciating th .....

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that the respondent - assessee was owner of the 1665 shares in Lavasa Corporation Ltd. and had sold the shares along with other shares in the company during the previous year relevant to the subject assessment year. However, during the assessment proceedings the Assessing Officer by order dated 31st December, 2007 held that the respondent - assessee had failed to establish the purchase of 1665 shares in 2001. In particular he noted that the consideration claimed to have been paid by the respond .....

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ee but at an value worked out by him. 4. Being aggrieved the respondent - assessee carried the issue in appeal to the Commissioner of Income Tax (Appeals) [CIT(A)]. By the order dated 17th October, 2008, the CIT(A) allowed the respondent-assessee's appeal on consideration of facts in detail. It held that the basis of the Assessing Officer not accepting the cost and the date of purchase of 1665 equity shares from Mr. and Mrs. Bhale was not acceptable in view of explanation offered by the resp .....

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f the vendors of the shares i.e. Mr. and Mrs.Bhale to show the receipts on sale of shares in its return of income for paying tax on the same. It noted the fact that all payments made for the purchase of shares from Mr. and Mrs.Bhale were made through account payee cheques. Further there were confirmation letters filed by the vendors Mr. and Mrs.Bhale which were not even considered by the Assessing Officer. The impugned order also found that the order of the CIT(A) accepting the explanation of th .....

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mstantial evidences were pointed out on behalf of the Revenue in particular Mr. and Mrs.Bhale not having disclosed the sale of shares and offering capital gains tax on the same on their return of income. In the above view it is submitted that the respondent - assessee has not been able to clearly establish that they had in fact purchased the shares in the assessment year 2002-03. 7. We find that the respondent - assessee has originally in its computation of capital gains indicated the amount of .....

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e Tribunal. The fact that Mr. and Mrs.Bhale, the vendors of 1665 shares to the respondent - assessee had not disclosed the receipt of consideration of sale in their returns of income and had not offered the same for tax cannot lead to the conclusion that no consideration was received by them. This is an issue which the Revenue is to take up with Mr. and Mrs.Bhale. The purchasers of shares cannot be held responsible for default made by the vendors of shares in filing their return of income and no .....

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