ACIT v ETC Industries Ltd. [2012] 21 taxmann.com 457 (Indore – Trib.) The deeming fiction created in section 50 modifies the provisions of section 48 only to the extent of modifying the term ‘cost of acquisition’.
Capital Gains
Mahesh Nemichandra Ganeshwade vs. ITO (ITAT Pune) The assessee entered into a development agreement on 12.7.2005 in which the consideration was fixed at Rs 2.50 crores. A correction deed was entered into on 2.7.2007 in which the sale consideration was increased to Rs. 4.90 crores. The assessee invested Rs. 50 lakhs in s. 54EC bonds on 3.8.2007 and 27.10.2007. The AO held that the date of transfer was 12.7.2005 and as the s. 54EC investments had been made beyond a period of 6 months from the date of transfer, the exemption was not available. The assessee claimed that as it was impossible for him to invest within 6 months from the date of transfer, the period of 6 months had to be reckoned from the date of receipt of consideration. HELD by the Tribunal:
S. 54EC: Relief available if investment made within 6 months of receipt of consideration
ITO v Ajay Shantilal Lalwani (2012) 145 TTJ511 (Pune) Facts of the case The assessee had purchased shares of a company in physical form and transferred to the demat account on a later date as the assessee was not having demat account at the time of purchasing the shares. When the assessee decided to sell the shares, he sent the shares for de-materialisation. He claimed exemption under section 10(38) for long term capital gains on sale of the said shares. During the assessment proceedings, copies of share certificates held by the assessee in physical form were also provided to the A.O, which contained complete relevant details viz address of Registered Office of the Company, signatures of the authorized signatory along with 2 directors’ signature, value of shares with paid up amount of shares purchased in each Company, date of issue of Certificate, Certificate No., Registered Folio, number of shares with their distinctive numbers, date of transfer of shares in the name of assessee and also copies of contract notes along with bills issued by share broker S.B. Buthra & Company. The A.O denied claimed exemption u/s. 10(38) of the Act in respect of Long Term Capital Gain mainly on the basis that there was a substantial delay in transferring the shares into D-MAT A/c.