Nawal Kishore Kejriwal v. CIT (2023) 335 CTR 97 / 151 taxmann.com 117 (Cal)( HC)

S. 45 : Capital gains-Holding period of shares-Date of transfer-Acquisition of the dematerialised shares is to be taken as the date of purchase when the broker issued his contract note and not the date of entry in the demat account-Circular Nos. 704, dated 28-4-1995 and 768, dated 24-6-1998 apply equally to securities held in physical as well as in dematerialised form. [S. 10(38) 45(2A), 260A]

Allowing the  appeal of the assessee  the Court held that Circular Nos. 704, dated 28-4-1995 and 768, dated 24-6-1998 apply equally to securities held in physical as well as in dematerialised form, and, thus, date of transfer and period of holding of securities is to be determined in view of such circulars even in case of shares held in dematerialised form.  Therefore, relevant date of transfer and period of holding of securities is to be determined in accordance with said circulars even in case of shares held in dematerialised form. Accordingly, Tribunal was incorrect in holding that said circulars were not applicable to dematerialised share scripts and date of acquisition would be date only when dematerialised share scripts were entered into assessee’s demat account with depository (AY. 2005-06)