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Issues Involved:
The correctness of treating the amount as long-term capital gains instead of short-term capital gains for the assessment year 2005-06. Summary: Issue 1: Correctness of Capital Gains Classification The Assessing Officer disputed the claim of the assessee that the gains from the sale of shares should be treated as long-term capital gains eligible for exemption u/s. 54EC. The dispute arose from the holding period of the shares, with the Assessing Officer claiming it was less than twelve months. The CIT(Appeals) noted that the assessee did not have a de-mat account at the time of purchase and opened one later, which affected the calculation of the holding period. The CIT(Appeals) directed the Assessing Officer to treat the gains as long-term capital gains and allow the exemption u/s. 54EC based on the circumstances presented. Issue 2: Challenge by Assessing Officer The Assessing Officer challenged the CIT(Appeals) decision, arguing that the date of purchase of shares was not in question and the holding period exceeded one year, thus the gains should be treated as capital gains. The Assessing Officer's challenge to treating the gains as long-term capital gains lacked a legally sustainable basis as the date of purchase was undisputed, and the delay in transferring shares to the de-mat account was explained by the assessee. The Tribunal found merit in the assessee's argument and upheld the CIT(Appeals) decision, dismissing the appeal filed by the Revenue. In conclusion, the Tribunal affirmed the CIT(Appeals) decision, emphasizing the importance of not altering the date of purchases when the genuineness of the transaction is not in question. The appeal by the Revenue was dismissed, and the decision was pronounced on 14th September 2012.
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