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TMI Blog2015 (10) TMI 1871X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst the order of CIT(A) confirming the action of AO in treating the profit arising out of sale of shares as undisclosed short term capital gain. For this, assessee has raised following two grounds: "1. That Ld. CIT(a) has erred in confirming the finding of the Assessing Officer in not considering the gains on the sale of shares of Rs. 24,16,994/- as long term capital gains. 2. That the Ld. CIT(A) has erred in confirming the finding of the Assessing Officer that the purchase of shares can be considered only on the date of dematerialization and payment and therefore the holding period being less than 12 months, the treatment of sale of shares be taxed as short term capital gains." 3. Briefly stated facts are that the AO during the cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me from the sale of shares being considered as Long Term Capital Gain. The Appellant on the other hand claims that the shares had been purchased on 16.06.2004 has relied on the Contract Notes issued by the broker dated 16.6.04 and claimed that shares were purchased outside the Stock Exchange directly from the broker. Further that these shares were subsequently transferred to the dematerialized form on 3.10.05, after which 1,48,550 shares were sold on different dates in FY 2005-06 after 3.10.2005. Therefore the period of holding these shares should be considered from the date of the Contract Note which was 16.6.04 i.e. the holding period would qualify for treating the income as LTCG. The Appellant has also claimed that there was no bar in tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se. We find that the entire premise of the lower authorities i.e. AO and the CIT(A) for treating the assessee's long term capital gains as short term capital gains for the reason that the payment for purchase of shares was made after dematerialization of shares. We find that the AO as well as CIT(A) admitted that these shares have been transferred in the DEMAT Account of the assessee on 03.10.2005, which is a categorical finding of the AO. Only the payment is made after the transaction of the shares to DEMAT Account on or after 03.10.2005. We find that the brokers have given contract notes for purchase of these shares dated 16.06.2004 and transferred in the name of the assessee on 23.08.2005. What is the material date for date of transactio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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