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.