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TMI Blog2017 (4) TMI 964X X X X Extracts X X X X X X X X Extracts X X X X ..... res on the date of dematerialization would be considered as purchase consideration of the shares and consequently the sale on 27.02.2007 may result short term capital gain or long term capital gain as case may be depending upon the date of dematerialization of the shares. Further the quantum of capital gain is also depending on the purchase price which is the prevailing price on the date of dematerialization. Accordingly, this issue of computation of capital gain whether it is short term or long term as well as the purchase price on the date of dematerialization is remanded to the record of the AO for proper verification. The AO is specifically directed to find out the actual date of dematerialization of shares and the prevailing market price of the shares on the date of dematerialization to be considered as purchase consideration and then compute the capital gain. Since the facts are identical in all the cases therefore the issue in all three cases is set aside to the record of the AO. - Appeals of the assessee allowed for statistical purposes. - ITA No. 2193/Bang/2016, ITA No. 2194/Bang/2016, ITA No. 2195/Bang/2016 - - - Dated:- 18-4-2017 - SHRI VIJAY PAL RAO, JUDICIAL MEMBER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of authorities below has no support in law; is contrary to facts and evidence available. Such a treatment deserves to be rejected totally. 5.1 In any case and without further prejudice, the authorities below have erred in: a) Taxing/confirming the entire sale consideration received on sale of shares as income under the head other sources. b) Not considering the fact that the appellant had earned Long Term Capital Gain on sale of shares ad same was exempt U/s. 10(38) of the I.T. Act.. c) Holding without basis that the transaction in shares are fraudulent d) Alleging without any basis that the appellant has obtained accommodation entries and appellant's own money come back in the guise of capital gains. The conclusions / observations of authorities below being totally erroneous and without basis both on facts and law is to be disregarded. 5.2 The several observations made and various conclusions drawn by the lower authorities in the course of order are without basis and evidence and are made/drawn on surmises, probabilities and conjectures. Such observation and conclusions by quasi-judicial authorities have no support in law and deserve to be rejected in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e u/s. 148 of IT Act. The AO completed the reassessment by making an addition u/s. 68 towards the sale consideration received on account of sale of M/s. Talent Infoway Limited. Thus the AO made an addition on account of share transactions treating them as income from other sources on the ground that Shri Mukesh Choksi has stated in the statement that the entries are accommodative in nature and the broker who issued the contract notes was not entitled to operate in any of the stock exchange. Further the assessee claimed to have purchased the shares of M/s. Talent Infoway Limited by way of cash and dematerialization of the shares subsequently was held by the AO has after thought to get benefit out of such accommodative entries by colorable device. The assessee challenged the action of the AO before the CIT(A) but could not succeed. 5. Before the Tribunal, the ld. AR of the assessee has submitted that the assessee purchases the shares of M/s. Talent Infoway Limited on 15.04.2004 for a consideration of ₹ 11,914/- which were dematerialized in the month of December 2005 and thereafter the shares were sold on 27.02.2007. Thus the ld. AR has submitted that the sale of shares were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has not proved the genuineness of purchase of shares as it was claimed the purchases against cash. Therefore, the claim of the assessee in the absence of evidence cannot be accepted. The AO has examined the contract note relied upon by the assessee and found that the broker in question was not authorized to trade in the stock exchange and in the shares. Therefore, the contract note produced by the assessee does not prove the transaction of purchase. Further, the assessee has also failed to prove the payment of consideration as the assessee has claimed the payment through cash. He has relied upon the orders of the authorities below. 7. I have considered the rival submissions as well as relevant material on record. The assessee claimed to have purchased 7,900 shares of M/s. Talent Infoway Limited on 15.04.2004. In support of its claim the assessee produced contract note of the broker. However, the AO in the enquiry found that the alleged broker was not an authorized broker of the stock exchange to deal in the sale and purchase of shares. Therefore the AO rejected the said contract note. Further, since the assessee has claimed to have purchased the shares against cash the AO has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of dematerialization of these shares and therefore the market price of the shares on the date of dematerialization would be considered as purchase consideration of the shares and consequently the sale on 27.02.2007 may result short term capital gain or long term capital gain as case may be depending upon the date of dematerialization of the shares. Further the quantum of capital gain is also depending on the purchase price which is the prevailing price on the date of dematerialization. Accordingly, this issue of computation of capital gain whether it is short term or long term as well as the purchase price on the date of dematerialization is remanded to the record of the AO for proper verification. The AO is specifically directed to find out the actual date of dematerialization of shares and the prevailing market price of the shares on the date of dematerialization to be considered as purchase consideration and then compute the capital gain. Since the facts are identical in all the cases therefore the issue in all three cases is set aside to the record of the AO. 8. In the result, the appeals of the assessee are allowed for statistical purposes. Pronounced in the open court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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