TaxTMI 
TaxTMI 
2015 (6) TMI 895
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.... respectively for the same assessment year 2005-06, passed against the order of the Assessing Officer under section 143(3) read with section 263 of the Income Tax Act. 2. The Revenue has taken in both the appeals the following common effective grounds of appeals:- (1) The ld. CIT(A) erred in treating the period of pledge of the shares as holding period by the assessee while the shares have been transferred from the demat account of the assessee to the account of the creditors of loan. (2) The ld. CIT(A) erred in allowing the assessee of including the period of pledge of the shares of Aftak Infosys for the purpose of loan thereby treating the capital gain as long term capital gain. (3) The ld. CIT(A) erred in allowing the interes....
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....ce as infruc tuous. 5. Grounds No. 1 & 2 in Revenue's appeal (ITA No. 1713/Kol/2010) relates to the period of holding for determining whether the assessee has derived long-term capital gain or short-term capital gain. 6. Brief fact s relating to these grounds are that the assessee has shown long-term capital gain at Rs. 1,83,71,459/- on sale of 2,53,000 shares of Aftek Infosys Ltd. and also claimed exemption under section 10(38) amounting to Rs. 1,53,73,666/-. The Assessing Officer noted that the assessee has pledged 2,75,000 shares of the said company with certain parties, and obtained loans against them. The shares were also transferred from the demat account of the assessee to those of the loan creditors during the period of pledge....
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....e assessee. The assessee has taken the loans after pledging the shares to the loan creditors. The assessee has transferred the shares from his demat account to the loan creditors merely as a security as the assessee has taken loans on pledge of the shares. Whenever the loan is taken by pledging a immovable property, the property has to remain in the possession of the persons, who advanced the loans. Giving possession of the movable property as security does not mean the ownership of the assets will also get transferred in favour of the person from whom the assessee has taken the loan. This is an undisputed fact that the shares continued to be shown in the balancesheet of the assessee. In view of this fac t, in our opinion, the ld. CIT(Appea....
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....T(Appeals) noted that the assessee had taken loans from 23 creditors out of which interest has been paid to two loan c reditors @ 9%. In the case of remaining 21 loan creditors, interest has been paid at the rates varying from 10% to 13%. It was also noted that in case of 19 loan creditors, the interest was paid at the rate exceeding 12%. In view of this fact, ld. CIT(Appeal s) took the view that interest paid to the 'Karta' at the rate of 10% cannot be held to be excessive or unreasonable. 11. After hearing the rival submissions and carefully considering the material available on record, we do not find any infi rmity in the order of ld. CIT(Appeals). Ld. CIT(Appeals) has correctly took the view that the interest paid to the 'Karta' @ 10....