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2016 (7) TMI 267

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....as selected for scrutiny and the assessment was completed under section 143(3) of the Act, determining the total income of assessee at Rs. 15,90,534/-. While making assessment AO made certain addition u/s 68 in respect of capital gain of Rs. 1501240/ - and of Rs. 31,344/- sales of shares through M/s Vijay Bhagwandass &Co.The assessee filed appeal against the quantum assessment before CIT appeals. The assessee withdrew the appeal in respect of ground of addition made under section 68 in respect of capital gain of Rs. 15,01,240/-. However the other addition of Rs. 31,344/- made u/s 68 of Act, was deleted by the CIT appeals. 3. After disposal of the appeal AO served notice of penalty under section 274, read with section 271(1) (c) of the Act.....

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....ns stated in letter dated 31st of October 2008, which was addressed to CIT appeals. In the said letter it was contended that rate of tax is same in respect of STCG and income considered in Sec 68 of the Act, Mr. Vijay Bhagwandas through whom he has dealings expired on 6th June 2006, the assessee has already paid tax of Rs. 6,59,010/-. If the income is considered as income under section 68 instead of capital gain, penalty is not leviable. AR of assessee further argued that coordinate bench of ITAT, Mumbai in ITA No.1123/M/2009 in Milan Gandhi versus ITO, further in ITA No.2008/Pune/2012 in Pushpalata Bhandari versus DCIT, considered the similar transaction, transacted through Vijay Bhagwandas & Co. and the 3 ITA No. 742/M/2013- Miss. Geeta K....

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....re are evidence to uphold the view of the CIT (A). We are of the opinion that assessee is entitled to claim exemption under section 54 EC arising out of LTGC. Case relied upon by the AR of assessee. In case of ITO versus Sh. Jitender J Gandhi, Mukesh R Merolia versus ACIT and ITO versus Bibi Rani Bansal also endorse our views. In view of these discussions, we uphold the grievance of the assessee and reversed the order of CIT appeals". 7. Further, coordinate bench of ITAT Pune in ITA No.2008/Pune/2012, while dealing with transactions of share of fast track entertainment Ltd held as under: "20. The question which arises before us is the treatment of gain arising on the said transaction of sale, purchase of shares is to be assessed under th....

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....nverted into Jumbo Certificates vide communication dated 16.02.2004 and thereafter, there was de-materialization of the shares on 26.07.2004. In the entirety of the above said facts and circumstances, we hold that the gain arising on transfer of shares is to be assessed as income from long term capital gain in the hands of the assessee. 21. We further find support from the ratio laid down by the Hon'ble Bombay High Court in CIT Vs. Shri Mukesh Ratilal Marolia in Income Tax Appeal No.456 of 2007, vide order dated 07.09.2011, wherein it was held as under:- "5. On further Appeal, the ITAT by the impugned order allowed the claim of the Assessee by recording that the purchase of shares during the year 1999-2000 and 2000-2001 were duly r....

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....e purchase and sale of shares are genuine and therefore, the Assessing Officer was not justified in holding that the amount of Rs. 1,41,08,484/- represented unexplained investment under Section 69 of the Income Tax Act, 1961 cannot be faulted. 8. In the result, we see no merit in this Appeal and the same is dismissed with no order as to costs." 22. Further, Pune Bench of the Tribunal in Sushila Suresh Chavan Vs. ITO in ITA No.1436/PN/2011, relating to assessment year 2003-04, vide order dated 15.01.2014, in similar circumstances had held that the transaction of purchase and sale of shares of Database Finance Ltd. was a genuine transaction and the claim of long term capital gain was allowed in the hands of the assessee therein. In the t....