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TMI Blog2023 (5) TMI 1060X X X X Extracts X X X X X X X X Extracts X X X X ..... the date of purchase as 04.05.2005 and 10.05.2005. Purchases are duly reflected in the financial accounts for F.Y. 2005-06 ending on 31.03.2006. Merely because payments were made to the brokers on subsequent dates would not make the entire gains as income from undisclosed sources, not by any stretch of imagination. Since the purchases and sales of shares have not been disputed, and are supported by demonstrative evidences, we do not find any logic/ justification in treating the gain as income from undisclosed sources. We direct the Assessing Officer to consider the gains as long term capital gains as per provisions of law. Decided in favour of assessee. - SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND SHRI CHALLA NAGENDRA PRASAD, JUDICI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hort term capital gains as such, and directed the Assessing Officer to treat the long term capital gains as such. 6. The revenue preferred appeal before the Tribunal and this Tribunal, in ITA No. 3807/DEL/2011 confirmed the findings of the ld. CIT(A) in so far as treatment of short term capital gains as such is concerned. However, in so far as the issue relating to the long term capital gains is concerned, the Tribunal restored the matter to the file of the Assessing Officer with the following directions: From the materials presently available before us, it is not possible to conclude whether the shares claimed to have been sold by the assessee are exactly the same as the shares claimed to have been purchased by the assessee - as f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13.12.2006 10.05. 2005 3900 Rich Udyog Network Ltd 6,63,000.00 12.05.2005 14.12.2006 26000 6,37,000.00 3550 350 Total 19,900 33,81,563.20 33,91,563.20 9. Sales have been made as under: Date of sale No of shares Average sale price per share Broker name Sale price [Without STT Out/Debited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbers of purchase of shares. Though this direction was given by this Tribunal in the first round of litigation, but with our utmost respect to the coordinate bench, this direction was irrelevant and could not have been carried out by any authority under any circumstances as the shares purchased were transferred to the DEMAT Account and there is no question of any distinctive number of shares. 13. It is a settled proposition of law that the law does not contemplate or require the performance of an impossible Act - lex non cogit ad impossibilia. The Securities Exchange Board of India [SEBI], under FAQ of Dematerialization more than one and a half decade ago, had clarified that dematerialized shares do not have any distinctive numb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 2. When the securities are transacted through stock exchanges, it is the established procedure that the brokers first enter into contracts for purchase/sale of securities and thereafter, follow it up with delivery of shares, accompanied by transfer deeds duly signed by the registered holders. The seller is entitled to receive the consideration agreed to as on the date of contract. The Board are of the opinion that it is the date of broker's note that should be treated as the date of transfer in cases of sale transactions of securities provided such transactions are followed up by delivery of shares and also the transfer deeds. Similarly, in respect of the purchasers of the securities, the holding period shall be reckoned from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nancial accounts for F.Y. 2005-06 ending on 31.03.2006. Merely because payments were made to the brokers on subsequent dates would not make the entire gains as income from undisclosed sources, not by any stretch of imagination. Since the purchases and sales of shares have not been disputed, and are supported by demonstrative evidences, we do not find any logic/ justification in treating the gain as income from undisclosed sources. 17. Considering the facts of the case in totality, we direct the Assessing Officer to consider the gains as long term capital gains as per provisions of law. 18. In the result, the appeal of the assessee in ITA No. 1755/DEL/2022 is allowed. The order is pronounced in the open court on 24.05.2023. - - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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