TaxTMI 
TaxTMI 
2026 (2) TMI 634
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....42(1) of the Act were issued along with questionnaire to the assessee and were duly served. During the financial year 2016-17, the assessee had sold 7,06,000 nos. of listed equity shares of M/s Skipper Limited on the recognized stock exchange of BSE and NSE in several tranches for a total consideration of Rs. 10,90,17,795/-, in respect of which, it had claimed exempt long term capital gains of Rs. 9,48,97,795/- u/s 10(38) of the Act. Upon enquiry from the ld. AO, the assessee had submitted that, these shares were acquired by the assessee firm on 30.04.2014, i.e. during the FY 2014-15 from two sellers namely M/s Edessa Commercial Pvt Ltd & M/s Rebecca Suppliers Pvt Ltd at a price of Rs. 20/- per share, which was subsequently dematized on 24.03.2015 and 25.03.2015 on the platform of BSE. The assessee accordingly worked out the total cost of acquisition at Rs. 1,41,20,000/- [7,06,000 x Rs. 20/-]. After deducting the same from the total sales proceeds of Rs. 10,90,17,795/-, the assessee claimed exemption u/s 10(38) of the Act in respect of long term capital gains of Rs. 9,48,97,795/- [Rs.10,90,19,795 (-) Rs. 1,41,20,000]. The ld. AO, in the course of assessment, had issued summons to t....
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....AO has not disputed the date of purchase and that the limited issue in dispute was the purchase price of the shares. Taking us through the documents placed in the paper book, the ld. AR pointed out that, the shares were purchased on 30.04.2014 i.e. FY 2014-15 and the sale transaction took place in the relevant AY 2017-18. It was brought to our notice that, the shares of M/s Skipper Limited was not listed on the platform of BSE at the time of purchase and thus the shares were purchased in physical form. In support, he invited our attention to the sale bills issued by the sellers. The ld. AR further showed us that, the case of the assessee was also selected for scrutiny in AY 2015-16 wherein one of the CASS reasons was investment in unlisted equities (including M/s Skipper Limited). He took us through the enquiries made by the AO's predecessor u/s 133(6) of the Act from these two sellers, whose replies were placed at Pages 20 & 21 of paper book and showed that the ld. AO's predecessor had accepted the veracity of purchases in the assessment order passed u/s 143(3) for AY 2015-16 on 18.04.2017 after making due enquiries. According to him therefore, the Revenue could not dispute the co....
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....price of Rs. 20/share. It is seen that, the act of purchase of shares has not been disputed but it is the price paid for purchase which is in question before us. Be that as it may, it is not in dispute between the parties that the impugned shares were purchased in FY 2014-15. The question however is the relevant date of acquisition in FY 2014-15 and the price paid by the assessee. It is seen that, this was one of the issues for which the case of the assessee was selected for scrutiny under CASS in AY 2015-16. The ld. AO's predecessor is found to have made enquiries from the respective sellers u/s 133(6) of the Act, and after examining the details filed by the assessee and the two sellers, the ld. AO had accepted the investment made by the assessee in shares of M/s Skipper Limited at Rs. 20/share on 30.04.2014. The Revenue however is now claiming in the relevant AY 2017-18 that the assessee had purchased the shares on 24.03.2015 & 25.03.2015 for Rs. 142.96/share& Rs. 146.15/share. We are in agreement with the principle contention of the ld. AR that, this claim sought to be raised by the Revenue is of no consequence in the income-tax assessment of AY 2017-18. It is well settled under....
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.... accepted in the year of purchase i.e. AY 2015-16. We also find that there was no legal basis to tax the differential sum computed by the ld. AO by way of income u/s 56 of the Act in the relevant AY 2017-18. We further find that the ld. CIT(A)in its findings has discussed the documentary evidences filed by the assessee and the operative portion of the order of the ld. CIT(A) in allowing the appeal on merits is as under: "5.4. I have considered the facts of the case, observations of the AO and submission of the appellant. The primary issue in dispute pertains to the disallowance of exemption claimed u/s10(38) of the Act, amounting to Rs. 8,75,30,700/-, arising from the alleged incorrect computation of LTCG by the AO. From the details available on record, it is observed that the appellant had purchased 4,80,000 equity shares of M/s Skipper Ltd. from M/s EdessaCommercial Pvt. Ltd. and 2,26,000 shares from M/s Rebecca Suppliers Pvt. Ltd. on30/04/2014 at a price of Rs. 20 per share, which was the last traded price on the Calcutta StockExchange as on the date of purchase. Thus, the total cost of acquisition of 7,06,000 shares was Rs. 1,41,20,000/-. These transactions were carrie....
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....of the transaction. Further, in the subsequent assessment for A.Y. 2016-17, the AO verified the dividend income received from M/s Skipper Ltd. and accepted the appellant as a genuine shareholder, thereby acknowledging the continued ownership of shares by the appellant. It is important to note that the AO in the present proceedings has not brought on record any direct or conclusive evidence to establish that the purchase price declared by the appellant was fictitious or inflated or not in accordance with the actual transaction. The AO has also not disputed the fact of purchase or the holding period or the mode and timing of sale of shares through a recognized stock exchange with payment of STT In such circumstances the unilateral substitution of the appellant's declared cost of acquisition with an artificially inflated figure without rebutting the documentary evidence submitted by the appellant is not legally sustainable. It is a settled position in law as upheld by various judicial authorities that when transactions involving purchase and sale of shares are supported by verifiable documents such as purchase bills, Demat statements, bank statements, contract notes and the sale is ex....