9911796707
TMI Blog2012 (9) TMI 1218X X X X Extracts X X X X X X X X Extracts X X X X ..... -term capital gains instead of short-term capital gains". Briefly, the relevant material facts are like this. It is a case of reopened assessment. During the course of reassessment proceedings, the Assessing Officer noted that the assessee had earned capital gains of ₹ 10,23,540/- on sale of 10,500 shares in Sangotri Constructions Ltd. The assessee's claim was that these shares were purchased on 09.01.2003 and sold on 23.04.2004. Accordingly, the holding period being more than twelve months, these gains were required to be treated as long-term capital gains and the assessee was entitled to exemption u/s. 54EC of the Act. The Assessing Officer, however, disputed this claim. As per information available to him from the Income T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sold on 23.04.2004 resulting in capital gain of ₹ 10,48,950/- which was invested in bonds of REC on 19.10.2004. The purchase transaction is supported by the contract note from the broker and also reflected in the balance sheet as on 31.03.2003. The legal representative of deceased assessee has placed reliance on Circular No. 704 dt. 28.04.1995 in the above written submission. In support of his claim that shares were held for more than 1 year. Keeping in view of this circumstances the A.O. is directed to treat the gain on sales of shares as long term capital gain and allow the claim of Sec. 54EC as per law. Therefore, ground No. 1 is allowed. 2. The Assessing Officer is aggrieved and is in appeal before us. 3. We have heard the rival ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the capital gains as a short-term capital gain. There is not even a whisper of an allegation about genuineness of the transaction even though it is a case of, what is commonly known as, penny stock and the value of the shares has gone up almost 40 times within one year. On these facts, the Assessing Officer does not question or probe genuineness of transaction and yet claims that these gains should be treated as short-term capital gains. We leave it at that.
5. For the reasons set out above, we approve the conclusions arrived at by the CIT(Appeals) and decline to interfere in the matter. In the result, the appeal filed by the Revenue is dismissed.
The order is pronounced in the open court today on 14th Sept., 2012. X X X X Extracts X X X X X X X X Extracts X X X X
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