Date of purchase of share has to be taken from the broker’s note and the period of holding is to be taken from the date of purchase and not from the date of dematerialization

Last updated: 14 August 2012

Court :
INCOME TAX APPELLATE TRIBUNAL

Brief :
From the case observe the following fact... The learned CIT (Appeals), erred in confirming the finding of the Assessing Officer in not considering the gains on the sale of shares of Rs. 4,89,18,734/- as long term capital gains and thereby also confirming the consequent denial of exemption u/s 10(38) of the Income- tax Act, 1961. 2. The learned CIT (A) erred in confirming the finding of the Assessing Officer that the purchase of the shares can be considered only on the date of dematerialization and therefore the holding period becoming less than 12 months hence, the capital gains of Rs. 7,115,219 (50,095,894 — 42,980,675) be taxed as short term capital gains. 3. The learned CIT (A) further erred in holding that the purchase value of the shares sold be taken at the average of high and low price of the shares traded on the NSE and BSE on the date of dematerialization viz. Rs.42,980,675 and treating the same as unexplained investment in the shares.

Citation :
Smt. Hamida J. Rattonsey, C/o. Dimexon Diamonds Ltd., 804, Raheja Chambers, 213, Nariman Point, Mumbai – 400 021. PAN: AADPR 7593 N (Appellant) Vs. D.C.I.T. Central Circle-5, Aayakar Bhavan, Maharshi Karve Road, Mumbai-400 020. (Respondent)