DCIT Vs Archit Aggarwal (ITAT Delhi)
Revenue appealed against CIT(A)/NFAC’s order deleting addition of ₹15.84 crore arising from sale of 6,51,000 shares of Vinay Corporation Pvt. Ltd., where AO had treated gains as Short-Term Capital Gains (STCG) & denied deduction u/s 54F. AO alleged that Archit Aggarwal received the shares from his uncle, Viney Prakash Agarwal, who allegedly purchased 9,23,826 shares from Sudesh Kumari on 02.07.2019 for ₹2,16,683, thereby making the shares short-term in the hands of the Assessee.
CIT(A), after detailed examination, held that AO’s conclusion was based on suspicion & misreading of documents. Assessee produced a notarised gift deed from Sudesh Kumari gifting 9,23,826 shares to Viney Prakash Agarwal, demat transfer proof, affidavits, shareholding records of Viney Corporation Ltd, & a revised movement-of-shares statement showing that Sudesh Kumari had originally acquired these shares between 1995 & 2016. CIT(A) also considered AO’s remand report, which did not dispute the clarifications. CIT(A) held that the shares received by Assessee on 27.10.2020 were gifted shares, & by virtue of section 49(1) & Explanation 1(b) to section 2(42A), the period of holding & cost of acquisition must be traced back to the previous owner, i.e., Sudesh Kumari, who had held them for more than 24 months. Thus, the shares were long-term capital assets, resulting in Long-Term Capital Gain (LTCG) on sale. As Assessee had invested ₹15.62 crore (plus incidental costs) in a residential property within the prescribed period, all conditions of section 54F stood satisfied. CIT(A) therefore allowed the claim of LTCG & exemption u/s 54F.
