2012 (8) TMI 1007

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....nd related persons on 11.4.2007. The assessee was also covered in this search action. Notice u/s. 153A was issued and served on the assessee on 31.01.2008. In response to notice, the assessee filed return of income for the year under consideration declaring total income at Rs. 17,03,069/-. 3. During the course of the assessment proceedings, the Assessing Officer observed that the assessee has shown Long Term Capital Gain to the tune of Rs. 27,75,550/- on the purchase and sale of 20,000 equity shares of Offshore-Finvest Ltd., and claimed exemption u/s. 54F of the Act as the Long Term Capital Gain have been used for acquisition of residential house. The AO was of the opinion that shares of the company Offshore-Finvest Ltd., are nothing but....

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....submissions/explanations given by the assessee in respect of the Long term Capital gains. The Ld. CIT(A) was of the opinion that the entire transaction resulting into Long term Capital gains have been done by a penny stock in which certain stock brokers have manipulated and rigged the market price of the shares. The Ld. CIT(A) was of the opinion that the manipulation in the share prices of the company was prima facie contravening Regulation 4(2)(a), (e) and (o) of the SEBI (prohibition of Fraudulent and Unfair Trade Practicles relating to Securities Market) Regulations, 2003 and clauses A(12) to A(4)(a) of the code of Conduct specified for stock brokers under Schedule II of the SEBI (Stock brokers and sub-brokers) Regulations, 1992. The Ld.....

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.... the contract note and the same have been sold in the month of May, 2004 i.e. after a period of 12 months, therefore the gains in the present case are gains arising on transfer of Long Term Capital asset and are therefore Long Term Capital Gain. The Ld. Counsel further relied upon the decision of the Hon'ble Jharkhand High Court at Ranchi in Tax Appeal No. 4 of 2011. Referring to the judgement, the Ld. Counsel pointed out that the facts and the circumstances of assessee's case are identical to the facts and circumstances of the case decided by the Hon'ble Jharkhand High Court. 8. Per contra, the Ld. DR relied upon the findings of lower authorities. 9. We have considered the submissions of the Counsels from both the sides. We find that....