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TMI Blog2012 (7) TMI 542X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to introduce his undisclosed income in the guise of long-term capital gain. 4. On the facts and in the circumstances of the case, the CIT(A) erred by applying the decision of Hon'ble High Court of Punjab & Haryana delivered in the case of CIT v. Anupam Kapoor [2007] 212 CTR (P&H) 491:[2008] 299 ITR 179 (P&H) when the facts of the cases are distinguishable." 2. The assessee, on the other hand, has impugned the first appellate order on the following grounds : "(1) The learned CIT(A) erred in holding that the appellant had failed to prove that the delivery of the shares was taken in financial year 2003-04 and therefore, the gain arising on sale of shares was to be taxed as short-term capital gain by assuming the date on which the shares were transferred to the D-mat account as the date of purchase of shares. (2) The learned CIT(A) failed to appreciate that the appellant had purchased the shares of Oasis Cine Communication Ltd. on 4th April, 2003 and had also purchased the shares of Shiv Om Investment & Consultancy Ltd. on 24th Nov., 2003 and accordingly, the gain arising on sale of shares was a long-term capital gain exempt under s. 10(38). (3) The learned CIT(A) erred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de No. Settlement No. Quantity of shares Rate including brokerage Amount Oasis Cine Communications 2-4-2003 - 2004305D 10.000 2.32 23,200 Shiv Om Investment 24-11-2003 - 2004462D 10,000 1.00 10,200 Total 20,000 33,400 Sale contract note (Swadha Securities (P) Ltd.) Oasis Cine Communications 12-4-2005 4333 2006329R 3,000 298.55 8,95,650 23-4-2005 4421 2006336R 1,500 298.95 4,47,975 27-4-2005 4459 2006340 1,000 295.06 2,95,060 9-6-2005 4529 2006349R 1,000 294.66 2,94,660 13-6-2005 4540 2006351R 1,000 294.66 2,94,660 13-5-2005 4347 20063305 2,500 298.10 7,43,491 10,000 29,71,496 Shiv Om Investment 22-7-2005. 570 2006380R 3,000 197.00 5,90,100 12-8-2005 647 2006395R 3,000 196.95 5,93,850 24-11-2005 937, 938 2996460R 2,000 196.70 3,93,400 9-12-2005 958 2006471R 1,000 197.00 1,96,700 12-12-2005 968 2006472R 1,000 196.70 1,96,700 Total 10,000 19,67,750" The learned CIT(A) ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Calcutta Stock Exchange and the sale transaction was covered by security transaction tax. These purchases are duly disclosed in the relevant year's balance sheet. The assessee had also disclosed investment in purchase of shares in the return furnished for the preceding asst. yr. 2004-05. Thus, merely because there is some general tendency of some few traders engaged in rigging up the market, the same should not deprive the assessee from profit arising from genuine sales which has actually resulted in long-term capital gain which is exempt under s. 10(38) of the Act. The learned Authorised Representative also tried to meet out the objections raised in this regard by the authorities below which we will discuss in our finding in succeeding paras. He drew our attention to page Nos. 16 to 50 of the paper book i.e. copies of remand report of the AO, reply of the assessee to the remand report, return of income along with balance sheet for the asst. yrs. 2004-05 and 2005-06, physical share certificates of Oasis Cine Communication Ltd. and Shiv Om Investment & Consultancy Ltd., D-mat account statement, D-mat request application forms in respect of Oasis Cine Communication Ltd. and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly dispute is regarding the date and mode of acquisition of those shares in question. The assessee was not able to prove to the satisfaction of the authorities below that the said shares were actually purchased on various dates during the financial year 2004-05. The assessee has tried to meet out objections raised by the AO in this regard. The AO noted that the shares were credited in D-mat account on 12th April, 2005, after lapse of more than 20 to 24 months from the date of purchase contract note i.e. 4th April, 2003 and 25th Nov., 2005. The submission of the assessee in this regard remained that the assessee had purchased the shares outside stock exchange directly from the broker in physical form. The assessee was having no D-mat account when the shares were purchased. D-mat account was opened on 30th Nov., 2004 in the financial year 2004-05. The date of purchase of shares is 25th Nov., 2003 and not 25th Nov., 2005. The said date falls in the asst. yr. 2006-07. It was explained that shares were kept in the physical form till the shares were held by the assessee. When the assessee had decided to sell the shares, he had sent the shares to D.P. (Stock Holding Corporation of India L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S.B. Bhutra & Co., had not executed any trade on 2nd April, 2003 in Oasis Cine Communication Ltd. and also on 23rd Nov., 2008 (correct date is 25th Nov., 2003) in Shiv Om Communications in online trading systems of the exchange, the submission of the assessee remained that the words used "online trading system of the exchange" are very important as the assessee has also stated the same clearly to the AO in his statement that the transaction is not done by him in the online system of the exchange, but the shares were purchased outside the market through the broker. It was submitted that the AO had asked the company to confirm the share transactions. In case of Shiv Om Investments & Consultancy Ltd., the company vide its letter dt. 29th Nov., 2008 addressed to the company had confirmed in black and white that the said shares have been transferred on the given date. It was submitted that it is for the assessee to hold the shares in physical form or dematerialized form. The assessee could not be penalized either for not opening D-mat account when he had purchased shares in the physical form. It was further submitted by the assessee that during the inspection of records allowed by AO ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levant details such as address of registered office of the company, signatures of the authorized signatory along with two directors' signatures, value of shares with paid-up amount of shares purchased in each company, date of issue of certificate, certificate number, registered folio, number of shares with their distinctive numbers, date of transfer of shares in the name of assessee and also copies of contract notes along with bills issued by sharebroker. S.B. Bhutra & Co. The assessee also furnished returns of income along with balance sheet for the asst. yrs. 2004-05 and 2005-06 during which period, assessee claimed to have purchased those shares in question, copy of contract notes issued by the broker and confirmations given by Shiv Om Investments & Consultancy Ltd. and by broker. We are thus of the view that merely because there was substantial delay in transferring the shares into D-mat account from the date of purchase and the transactions not routed through Calcutta Stock Exchange, the AO was not justified in doubting the declared date of purchase of the shares ignoring the above evidences. In the case of Smt. Jamnadevi Agrawal (supra), copy supplied, the property broker ..... X X X X Extracts X X X X X X X X Extracts X X X X
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