ITAT MUMBAI BENCH ‘J’
Jafferali K. Rattonsey v. DCIT
IT APPEAL NO. 5068 (MUM.) OF 2009
[ASSESSMENT YEAR 2006-07]
JANUARY 25, 2012
ORDER
R.K. Panda, Accountant Member – This appeal filed by the assessee is directed against the order dated 19.06.2009 of the Ld. CIT(Appeals)- Central II, Mumbai relating to Assessment Year 2006-07.
2. The grounds of appeals raised by the assessee are as under :
“1. The learned CIT(Appeals), erred in confirming the finding of the Assessing Officer in not considering the gains on the sale of shares of Rs. 4,94,51,910/- as long term capital gains and thereby also confirming the consequent denial of exemption u/s. 10(38) of the Income-tax Act, 1961.
2. The learned CIT(A), erred in confirming the finding of the Assessing Officer that the purchase of the shares can be considered only on the date of dematerialization and therefore the holding period becoming less than 12 months hence, the capital gains of Rs. 80,03,027/- (5,29,22,774 – 4,41,10,775) be taxed as short term capital gains.
3. The learned CIT(A) further erred in holding that the purchase value of the shares sold be taken at the average of high and low price of the shares traded on the NSE and BSE on the date of dematerialization viz. Rs. 4,41,10,775/- and treating the same as unexplained investment in the shares.
4. Without prejudice to above, the appellant has made investment in shares in earlier year which were duly reflected in the books of account of the appellant, hence the addition of Rs. 44110775/-unexplained investment for the year under consideration may be deleted.
5. Without prejudice to above, the transaction in shares being genuine and sufficient evidences were produced, the long term capital gains shown by the appellant as exempt under section 10(38) of the Income-tax Act, 1961 may be accepted and additions confirmed by the CIT(A) may be deleted.”
3. Facts of the case, in brief, are that the in response to notice u/s.153A dated 27.11.2006, the assessee furnished return of income on 29.12.2006 declaring total income of Rs. 68,01,840/-. The income of the assessee consists of income from house property of Rs. 2,54,100/- and interest of Rs. 55,63,980/-received from Kirtilal Kalidas Diamond Exports. The assessee had shown Long Term Capital Gain of Rs. 4,94,51,910/- on account of sale of the following shares which was claimed as exempt u/s.10(38) of the I.T. Act.
