Pravin C. Bokadia Vs ITO (ITAT Mumbai)
Summary: The Mumbai Bench of the Income Tax Appellate Tribunal, SMC Bench, considered ITA No. 736/Mum/2022 for Assessment Year 2015-16, filed by Shri Pravin C. Bokadia against the order of the Commissioner of Income Tax (Appeals)-49, Mumbai dated 24.03.2022. The appeal arose from the assessment order passed by the Income Tax Officer, Ward-19(2)(5), Mumbai under Section 143(3) of the Income-tax Act, 1961 dated 18.12.2017. The effective issue before the Tribunal was whether the CIT(A) was justified in confirming denial of the exemption claimed under Section 10(38) in respect of long-term capital gains arising from sale of shares of Lifeline Drugs and Pharma Ltd.
The assessee was an individual deriving income from business, capital gains and other sources and was carrying on the business of ferrous and non-ferrous metals as proprietor of M/s Champak Steel & Engineering. He was also a regular investor in shares. For A.Y. 2015-16, he filed his return on 28.09.2015 declaring total income of Rs 6,85,440 and claimed exemption under Section 10(38) on long-term capital gains from Lifeline Drugs and Pharma Ltd. The return was initially processed under Section 143(1).
The assessee stated that he had been allotted 6000 shares of Lifeline Drugs & Pharma Ltd through private placement on 25.10.2013 at a face value of Rs 10 per share and premium of Rs 133 per share. The shares were subsequently split into Re 1 shares on 19.11.2013, resulting in 60000 shares. The purchase was stated to have been made from accounted sources and the shares were dematerialised in the assessee’s demat account. Of the 60000 shares, 15200 were sold in five tranches during November and December 2014 for an aggregate consideration of Rs 41,08,445, while 44800 shares were retained.
