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2012 (8) TMI 1064

Gains on the sale of shares - computation of Long Term Capital Gains (LTCG) / Short Term Capital Gains (STCG) on sale of shares of a few companies - Held that:- CBDT Circular No.768 dtd. 24.6.1998 was issued to clarify the determination of date of transfer and the period of holding of securities held in demat form. It has been stated there in that earlier Circular No. 704 issued by the CBDT relating to the "date of transfer" and "period of holding" does not change when securities are held in the dematerialized form. - Therefore in view of the above two circulars of CBDT it is clear that in case of securities the "date of purchase" has to be taken from the broker's note/contract note and the period of holding is also to be reckoned from the "date of purchase" and not from the "date of dematerializatjon". Since the holding period of the shares as per the broker's note and its subsequent sale after demateialjzatjon is Smt. Hamida J. Rattonsey, snore than 12 months, therefore, the shares become long term capital asset and the assessee's claim of long term capital gain is correct. In this view of the matter we set aside the order of the Id. CIT(A) and direct the A.O. to accept the .....

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r-connected. Basic issue to be decided in the case under consideration is computation of Long Term Capital Gains (LTCG) / Short Term Capital Gains (STCG) on sale of shares of a few companies. 3. During the assessment proceedings assessing officer found that the assessee had declared long-term capital gains of ₹ 4,89,18,734/-and the same was claimed as exempt under section 10 (38) of the Act. The appellant had submitted that she had purchased certain shares from a broker namely M/s. Mahasagar Securities Pvt. Ltd. (MSPL) and had sold the same through M/s. Techno Shares and Securities Ltd. AO recorded the statement of Shri Mukesh Choksi, director of MSPL, who denied having sold the impugned shares to the appellant. However, during the cross-examination the same person confirmed accepting the checks from the appellant. Though the AO had doubted the purchase of the shares from MSPL, but he did not express any doubt about the sale of the shares. Before the AO appellant submitted that the impugned shares were out of the balance held in her demat account, that the shares were transferred on the floor of the exchange, that the relevant bills and the contract notes for effecting transf .....

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CG as held by the FAA. Investment made by the assessee in shares cannot be treated as unexplained investment u/s.68 of the Act. We would like to refer to the order of the husband of the assessee in this regard where it has been held : We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and the CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. In the instant case the A.O. made addition of ₹ 5,09,25,802/- as unexplained cash credit holding the sale of shares by the assessee as bogus. While doing so he relied heavily on the statement given by Mr. Mukesh Choksi wherein he has stated that the transactions of purchase of shares are not carried out through them and the name of his company has been wrongly used and no transaction mentioned in the ledger has been carried out through them. The A.O. had also another proposition that the total purchase price on the date of dematerialisation comes to ₹ 44110775/- which becomes unexplained investment in shares. After deducting the investment in shares from sale price the short term capital gain comes to ͅ .....

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ransaction with the assessee on account of purchase of shares. The relevant questions and answers of Mr. Mukesh Choksi recorded by the A.O. on 24.12.2008, copy of which is placed at paper book page No. 19 to 23 are as under: Q No. 7:- Do you know Shri Jafferali K. Rattonsey and Smt. Hamida Rattonsey? Ans. No. I do not know them. Q No. 8:- I am showing you the ledger account of Mahasagar Securities Pvt.Ltd. in the books of Shri J.K. Rattonsey and Smt. Hamida J. Rattonsey.From this account it is seen that the assessee have carried out regular transaction with Mahasagar Securities Pvt. Ltd. Pl. confirm the ledger account furnished by the assessee with the Copy Of ledger account of J.K. Rattonsey and Smt. Hamida J. Rattonsey appearing in the books of Mahasagar Securities Pvt. Ltd. Ans.: I have seen the ledger and on the perusal of the same I found that the transactions are not carried out through us. It seems that our names have been used and no transaction mentioned in the ledger have been carried out through us. Mahasagar Securities have no relations with the J.K. Rattonsey and Smt. Hamida J. Rattonsey. 9.3.On the basis of the above statement of Mr. Mukesh Choksi the ld. CIT(A)upheld .....

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hat Mr. Mukesh Choksi is double speaking in his statements i.e. one given before the A.O. and the one during cross examination before the A.O. Under these circumstances one has to see the evidentiary value of a person making double speaking. We find the Hon'ble Calcutta High Court in the case of Eastern Commercial Enterprises (supra) has held that a man indulging in double speaking cannot be said by any means a truthful man at any stage and no Court can decide on which occasion he was truthful. We find the co-ordinate bench of the Tribunal in the case of Mrs. Uttara S. Shorewala (supra) (in which one of us the Accountant Member is a party) following the decision of Hon'ble Calcutta High Court upheld the order of the ld. CIT(A) in holding that the A.O. cannot make any addition in the assessee's hands despite the assessee not having made any payment to the entities mentioned by Shri Choksi, whose statement is being relied upon by him. The CIT (A) also noted that Mr.Mukesh Choksi has been vacillating right through and has given different at different stages of the proceedings and therefore his evidence was unreliable. 9.6 In view of the above judicial decisions the stateme .....

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