Tribunal held that dematerialised share scrips and the date  of acquisition of shares would be date only when dematerialised shares are entered in the demat account with depository. On appeal the Court held that Court held, that in view of Circular No. 704 dated April 28, 1995 ([1995] 213 ITR (St.) 7) issued by the Central Board of Direct Taxes, the capital gains  from the sale on February 22, 23 and 28, 2005 of shares purchased by the assessee on February 10, 2004 were long-term capital gains exempt under section 10(38) of the Act. Court also observed that section 45(2A) of the Income-tax Act, 1961 deals with the determination of the date of transfer of securities. In terms of Circular No. 704, dated April 28, 1995 ([1995] 213 ITR (St.) 7) it is the date of broker’s note that should be treated as the date of transfer in cases of sale transactions of securities provided such transactions are followed up by delivery of shares and the transfer deed. Similarly, in respect of purchase of securities the holding period shall be reckoned from the date of the broker’s note for purchase on behalf of the investors. In case the transactions take place directly between the parties and not through stock exchanges the date of contract of sale as declared by the parties shall be treated as the date of transfer provided it is followed up by actual delivery of shares and transfer deeds.  The Central Board of Direct Taxes by Circular No. 768 dated June 24, 1998 ([1998] 232 ITR (St.) 5) issued another circular for determination of date of transfer and the period of holding of securities held in dematerialised form under section 45(2A). On a reading of this circular it is seen that there is nothing to indicate that the circular excludes cases of securities sold in physical form. In fact the circular deals with securities held in physical form as well as those in dematerialised form. Furthermore, the circular has also clarified the position as to the applicability of the earlier Circular No. 704 dated April 28, 1995 ([1995] 213 ITR (St.) 7). (AY.2005-06)