PARESH MANUBHAI DESAI,KHAR WEST, MUMBAI vs. WARD 22(2)(1), MUMBAI, PIRAMAL CHAMBERS

O R D E R PER RENU JAUHRI [A.M.] :- This appeal is filed by the assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)”] dated 21/03/2025 passed u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for Assessment Year [A.Y.] 2015-16.

AY 2015-16 Paresh Manubhai Desai 2. On the based-on circumstances and facts, the Learned AO erred in appreciating the facts that the shares were received from parents of the assessee, which can be observed clearly from the NSDL demat statement, thereby treating entire sales consideration of Rs. 2,09,22,187/- and no COA, under the head STCG instead of LTCG.

3. Brief facts of the case are that the assessee filed his return declaring total income of Rs. 11,61,320/- on 29.08.2015 for AY 2015-16. The case was selected for scrutiny on the basis of information available regarding the share trading account of the assessee. Ld. AO noticed that the assessee had received sale proceeds from sale of equity shares amounting to Rs.2,09,36,220/- through HDFC Securities. The same was treated as short term capital gains in the hands of the assessee and the assessment was completed at income of Rs. 2,20,82,510/- vide order u/s. 143(3) dated 31.12.2017. Aggrieved with the order, the assessee preferred an appeal before Ld. CIT(A). It was contended by the assessee that the shares were received by him from his parents which were transferred to his accounts after their death. It was pointed out that from the demat account statement, it was clear that all the shares sold by the assessee during the year were either shown as opening balance or were transferred from the family members demat accounts and were, therefore, held for a period of more than one year. The assessee was therefore entitled to claim the exemption on account of Long-Term Capital Gains (LTCG) received from such sale u/s. 10(38) of the Act. During the course of appellate proceedings, Ld. CIT(A) sought a remand report from the Ld. AO on the submissions filed by the assessee. Vide AY 2015-16 Paresh Manubhai Desai remand report dated 27.07.2024. Ld. AO submitted that from the details made available, it was not possible to ascertain that the assessee was holding the impugned shares for more than two years. Further, no documentary evidence with respect to transmission of shares from his father to his mother and finally to him had been furnished by the assessee. Based on this remand report, Ld. CIT(A) provided an opportunity to the assessee to submit necessary evidences. However, in the absence of any such document any evidences in support of his claim regarding LTCG, Ld. CIT(A) confirmed the addition made by the Ld. AO. The assessee has filed an appeal before the ITAT against the order of Ld. CIT(A).