TaxTMI 
TaxTMI 
2026 (1) TMI 803
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....ower appeal vide the following detailed discussion: "7. Having addressed the admissibility issue for additional evidence, I now move on to address each ground of appeal raised by the appellant in the appeal. The appeal's first ground is a general one that doesn't need adjudication, so it's dismissed. 7.1 The appellant contends in ground No. 2.1 of the appeal that the AO was incorrect in determining that shri Viney Prakash Agarwal bought 6,51,000 equity shares of Viney Corporation Pvt Ltd from Mrs. Sudesh Kumari. The detailed observations of the AO and the appellant's submission regarding the purchase of the shares in question by Shri Viney Prakash Agsrwal from Sudesh Kumari have been discussed above and do not need to be repeated here. The appellant's initial submission to the AO was that Viney Prakash Agarwal provided him with 6,51,000 shares as a gift and that Shri Agarwal acquired the shares in question on 10/11/2010. Subsequently, the appellant provided a document to the AO that detailed Viney Prakash Agarwal's acquisition of VCL shares from 1995. 7.2. In the assessment order, the AO reproduced the document submitted by the app....
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....he above observations and the documents relating to Viney Prakash Agarwal's share movements that the appellant had originally submitted, the AO concluded that the documents were authentic and that Agarwal purchased 9,23,826 shares of VCL on 02/07/2019 for a price of Rs. 2,16,683/-. 7.5 In the appeal, the appellant reiterated his assertion that Viney Prakash Agarwal did not acquire 9,23,836 shares of VCL through a purchase, but rather obtained them as a gift on 02/07/2019, contrary to what the AO held. In the appeal, the appellant has provided another paper book, which contains a clarification letter dated 01/02/2024 sent by Vinny Corporation Pvt Ltd to Shri Viney Prakash Agarwal, as well as revised extracts of the shares movements in Viney Prakash Agarwal's case. To reiterate, the appellant's submitted documents in the additional paper book are additional evidence which was sent to the AO for verification and findings. The AO's remand report has been placed on record, and I will address it later. 7.6. The AO raised doubts about the authenticity of the gift deed signed by Sudesh Kumari on 02/07/2019 due to apparent inconsistencies in the appellant&#....
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....O was asked to verify and comment on the revised extract that includes Viney Prakash Agarwal's movement shares. In his remand report, the AO stated that - "9) When comparing these two statements of movements of shares as filed in the assessment proceedings and appellate proceedings, it seems there are additional details and information provided by the assessee that are:- 1. The detail filled in blank space in front of share transfer from Smt. Sudesh Kumari on 02.07.2019. "9,23,826 equity shares of Mis. Smt gifted Viney Corporation Pvt.Ltd.. Sudesh Kumari on 02.07.2019" 2. Clarification given about Amount/value mentioned in movements of shares as filed in the assessment proceedings and stated that (a) where total consideration paid by the VPA mentioned in the amount of the share holder cost and where that is gift then than cost to the doners whereas in share movement statement composite amount mentioned. b) total consideration received by VPA means the amount of sales Consideration and, when gifted, the cost to the Donor, whereas the composite amount is mentioned. The above clarifications have been given in the share movement statement." ....
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....he cost that the donor of the property acquired it. According to Explanation 1(b) of Section 2(42A) of the Act, the period of holding of the property in the hands of the donee should be reckoned from the date of the donor's acquisition of the property. Therefore, the cost of acquiring 9,23,826 shares in Viney Prakash Agarwal's possession should be determined based on the cost at which Sudesh Kumari acquired them. 9. Ground no. 3 is about the appellant's claim that the Assessing Officer made an error in categorizing the capital gain from the sale of 6,51,000 equity shares of Viney Corporation Pvt Ltd as short-term capital gains, despite the appellant's claim of long-term capital gains. As per the assessment order, Shri Viney Prakash Agarwal purchased 9,23,826 shares of VCL from Sudesh Kumari on 02/07/2019 and then transferred 6,51,000 shares as a gift to the appellant on October 27th, 2020. 9.1. As previously decided, Shri Viney Prakash Agarwal was given 9,23,826 shares as a gift by Sudesh Kumari on 02/07/2019. The holding period of those shares in the hands of Shri Aggarwal was over 24 months because she acquired them before 31/03/2016. Consequentl....
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....claimed to the AO that Viney Prakash Agarwal, who gave him 6,51,000 shares as gifts, acquired the shares in 2010, but he presented documents that showed Viney Prakash Agarwal had acquired the shares in question from 13/01/1995 to 27/03/2020. Upon finding an inconsistency in the appellant's submission about Viney Prakash Agarwal's purchase of shares and the date mentioned in the document, as well as other inconsistencies mentioned in the assessment order, the AO sent the appellant a notice of show cause. 12.2 In response, the appellant submitted before the AO that out of all. the shares held by Viney Prakash Agarwal, the 6,51,000 shares transferred to the appellant were out of 9,23,826 shares received by Viney Prakash Agarwal on 02.07.2019. The appellant further claimed that these 9,23,826 shares were received by Viney Prakash Agarwal as a gift from his sister-in-law, Mrs. Sudesh Kumari, on 02.07.2019. He submitted a copy of the gift deed in support of his contention. The appellant asserted that Mrs. Sudesh Kumari bought 24,46,590 shares, which included 9,23,826 shares, before 31.03.2016 and presented copies of the ITR of Mis Viney Corporation Limited to demonstrate....
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....hares in question. The AO's observations above provide a description of the appellant's contradictory claims that were mentioned in the assessment order. 13.1 During the appeal proceedings, the appellant has given the cost of acquisition and the period of holding the shares in question, which is included in paragraph 9 of his submission in this order. Shri Viney Prakash Agrawal, as mentioned in the submission, gave a gift of 6,51,000 shares of VCL to the appellant and acquired them at a cost of Rs. 52,54,790/- between 13/01/1995 and 28/03/2011. When a gift is made, the cost of the acquisition of capital asset for the donee is calculated based on the cost of the donor's shares acquisition. The appellant has calculated the cost of acquisition of shares in terms of Section 49 read with 45(2) of the Act at Rs. 52,54,790/-, which was the cost at which Viney Prakash Agrawal acquired those shares. The appellant has based its determination of the period of holding the shares in question on Section 49(1) and Explanation 1(b) to Section 2(42) of the Act. The appellant has classified those shares as long-term capital assets under section 2(29M) since their holding period ....
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....e record indicates that the appellant bought the residential property at Rs. 15,62,55,510/- on 25.03.2021. Furthermore, he paid consultants' fees and commissions of Rs 7,25,000/- and 17,11,000/-, as per the details. According to the record, the investment in the residential property was made using the sale proceeds of shares, and it was made within two years of the sale of the shares in question. 14. In summary: (i) Viney Prakash Agarwal presented the appellant with 6,51,000 shares of VCL as a gift on 27/10/2020, which is supported by the gift deed presented by the appellant. (ii) The appellant sold 6,51,000 Equity Shares of Viney Corporation Pvt Ltd (VCL shares) on 23.11.2020 for the consideration of Rs 22,99,20,180/- to M/S Synergy Metals Investment Holding Limited, Dubai. (iii) During the time span of 13/11/1995 to 28/03/2011, Vinay PraKash Agarwal acquired VCL shares at a cost of Rs. 52,54,790/- (iv) As the period of holding is determined by when the donor acquired the shares, the appellant held those shares for more than 24 months, which qualifies them as long-term capital assets under section 2(29AA) of the Act. (v) Th....