Adarsh Kumar Goel, CJ

1. This appeal has been placed before this Bench in pursuance of order of the Division Bench dated 17.2.2010 to resolve conflict in two decisions of this Court in Commissioner of Income Tax vs. Daga Entrade P. Ltd. (2010) 327 ITR 467 (Gauhati) and Rajendra Singh vs. Superintendent of Taxes and others, 1979 STC 10.

2. Reference may briefly be made to the facts giving rise to the issue. The assessee was assessed for the assessment year 2002-03 by the Assessing Officer (AO) giving benefit of exemption under Section 54F of the Income Tax Act, 1961 for long term capital gains from sale of shares. The shares were purchased on 21.4.2000 for Rs. 19,536/- and sold on 2.5.2001 for Rs. 6,36,640/- i.e. on the increased price of more than 30 times in one year. The Commissioner of Income Tax (CIT) held the order to be erroneous and prejudicial to the interest of revenue and exercised suo motu revisional jurisdiction under Section 263 of the Act. It was, inter alia, observed that while accepting genuineness of the share transaction, the AO failed to make any enquiry which, in the facts and circumstances, would normally be made to ascertain the capital gain in question.