ITO 4(3)(3), MUMBAI V. MATA SECURITIES INDIA P.LTD, MUMBAI

ITA 1096/MUM/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 3003 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 22-04-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 07-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rule of consistency; Question of law; Speculation loss
• Section: 43B; 43(5); 12; 28; 139

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.1096/MUM/2013 ASSESSMENT YEAR 2009-10 INCOME TAX OFFICER-4(3)(3), R.NO.367, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 / VS. M/S MATA SECURITIES INDIA PVT LTD. 51, RAMBHA 66, NEPEANSEA ROAD, MUMBAI-400002 ( / REVENUE) ( !'# $ /ASSESSEE) PAN. NO. AAACM4228M / REVENUE BY SHRI RANDHIR GUPTA !'# $ / ASSESSEE BY SHRI NISHIT GANDHI % & $ ' / DATE OF HEARING : 26/10/2015 & $ ' / DATE OF ORDER: 26/10/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 20/12/2012 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. THE ONLY GROUND RAISED IN THIS APPEAL PERTAINS TO S ETTING ASIDE THE INVOCATION OF PROVISIONS OF SECTION 73 OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) TREATING THE LO SS OF RS.20,70,934/- ON SALE OF INVESTMENT AS BUSINESS LO SS AND M/S MATA SECURITIES INDIA PVT. LTD. ITA NO.1096/MUM/2013 2 NOT SPECULATION LOSS AND FURTHER ERRED IN ALLOWING RS.46,50,365/- OUT OF THE TOTAL EXPENSES OF RS.56,8 6,633/- TREATED AND ALLOCATED TOWARDS SPECULATIVE BUSINESS AND FURTHER ALLOWING THE CLAIM OF THE RS.1,94,268/- U/S 36(1)(VA) OF THE ACT. 2. DURING HEARING OF THIS APPEAL, THE LD. DR, SHRI RANDHIR GUPTA, ADVANCED HIS ARGUMENTS, WHICH IS IDE NTICAL TO THE GROUND RAISED. ON THE OTHER HAND, SHRI NISH IT GANDHI, LD. COUNSEL FOR THE ASSESSEE DEFENDED THE CONCLUSIO N ARRIVED AT IN THE IMPUGNED ORDER. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE, A PRIVATE LTD. COMPANY, IS A MEMBER BROKER WITH NATIONAL STOCK EXCHANGE (NSC) AND BOMBA Y STOCK EXCHANGE (BSE). THE BUSINESS OF THE ASSESSEE CONSISTS OF BROKING IN SHARES, GOVERNMENT AND OTHER SECURITI ES, CORPORATE ADVISORY AND MUTUAL FUND DISTRIBUTION. D URING THE RELEVANT PERIOD, THE ASSESSEE MADE TEN TRANSACTIONS IN SHARES ON EXCHANGE WITHOUT DELIVERY, WHICH WERE DULY TREAT ED BY THE ASSESSEE AS SPECULATIVE TRANSACTION. THE ASSESSEE H AD BEEN INVESTING OWN FUNDS IN SHARES, MUTUAL FUNDS AND OTH ER SECURITIES. THE ASSESSING OFFICER TREATED THE INVE STMENT IN SHARES AS ADVENTURE IN THE NATURE OF TRADE, CONSEQU ENTLY, HE HELD THE INVESTMENT AS TRADING ASSET BY OPINING THA T HUGE FUNDS WERE UTILIZED BY THE ASSESSEE AND CAUSED SUBS TANTIAL LOSS WITH COMMERCIAL MOTIVE. THE STAND OF THE ASSES SEE IS THAT THE ASSESSEE WAS HAVING NET WORTH OF RS.12.54 CRORES (AS M/S MATA SECURITIES INDIA PVT. LTD. ITA NO.1096/MUM/2013 3 ON 31/03/2008) AND RS.12.61 CRORES (AS ON 31/03/200 9), WHEREAS, THE INVESTMENT IN SHARES OF LISTED COMPANI ES WAS RS.72,17 LAKHS AND RS.5.47 LAKHS RESPECTIVELY. TO COME TO A FAIR CONCLUSION, WE ARE SUMMARIZING HEREUNDER THE B RAKE UP OF INVESTMENT IN SHARES OF LISTED AND UNLISTED COMP ANIES OF THE LAST THREE FINANCIAL YEARS. YEAR ENDED TOTAL INVESTMENT IN SHARES OF COMPANIES COST OF SHARES OF LISTED COMPANIES COST OF SHARES OF UNLISTED SUBSIDIARY COMPANIES COST OF SHARES OF OTHER UNLISTED COMPANIES % OF INVESTMENTS IN SHARES OF LISTED COMPANIES 31/03/2007 2,83,13,945 31,58,945 2,50,96,000 59,000 11.16% 31/03/2008 2,52,14,041 72,17,287 2,50,96,000 1,18,0 41 22.29% 31/03/2009 2,64,70,041 5,47,490 2,51,86,000 12,84,0 41 2.02% IF THE AFORESAID SUMMARIZED CHART IS ANALYZED, WE N OTE THAT ABOUT 80% OF THE INVESTMENT IN SHARES IS IN THE SHA RES OF SUBSIDIARY AND UNLISTED COMPANIES, THUS, INHERENTLY , SUCH SHARES ARE NON-TRADABLE. NO EVIDENCE HAS BEEN PRO DUCED BY THE REVENUE SUBSTANTIATING THAT BORROWED FUNDS WERE USED BY THE ASSESSEE FOR MAKING INVESTMENT IN SHARES OF THE COMPANIES. AS ON 31/03/2008, THERE IS ONLY BORROWI NG OF RS.15.10 LAKHS. DURING THE PREVIOUS YEAR, THE ASSES SEE BORROWED RS.99 LAKHS FROM ITS SUBSIDIARY COMPANY BU T NOT FOR INVESTMENT IN SHARES, WHICH IS EVIDENT FROM THE FACT THAT INVESTMENT IN SHARES OF LISTED COMPANIES HAVE FALLE N DURING THE YEAR FROM RS.72.17 LAKHS TO RS.5.47 LAKHS, MEAN ING THEREBY, THE MAJORITY OF THE INVESTMENT HAS BEEN MA DE IN SHARES OF UNLISTED COMPANIES WHICH ARE NOT TRADABLE . WE FURTHER NOTE THAT MAJORITY OF THE SHARES ON WHICH L OSS WAS SUFFERED WERE HELD BY THE ASSESSEE FOR A PERIOD OF OVER TWO M/S MATA SECURITIES INDIA PVT. LTD. ITA NO.1096/MUM/2013 4 YEARS EVIDENCING THAT THE ASSESSEE MADE THE INVESTM ENT IN SHARES. FOR DECIDING THE ISSUE, THE INTENTION OF T HE ASSESSEE, AT THE TIME OF PURCHASE, TREATMENT IN THE BOOKS OF ACCOUNTS, BALANCE SHEET, METHOD OF VALUATION ARE SOME OF THE IMPORTANT FACTS, WHICH HAS TO BE CONSIDERED. THE RATIO LAID DOWN BY HONBLE JURISDICTIONAL HIGH COURT IN GOPAL PUROHIT 336 ITR 287, KARAMCHAN DTHAPAR BROS. VS CIT 82 ITR 899 (SC) SUPPORTS OUR VIEW. WE ARE USEFULLY, QUOTING HEREUND ER THE RELEVANT PORTION FORM THE DECISION FROM HONBLE BOM BAY HIGH COURT IN THE CASE OF GOPAL PUROHIT, WHEREIN, IT WAS HELD AS UNDER:- 2. THE TRIBUNAL HAS ENTERED A PURE FINDING OF FAC T THAT THE ASSESSEE WAS ENGAGED IN TWO DIFFERENT TYPES OF TRANSACTIONS. THE FIRST SET OF TRANSACTIONS INVOLVED INVESTMENT IN SHARES. THE SEC OND SET OF TRANSACTIONS INVOLVED DEALING IN SHARES FOR THE PUR POSES OF BUSINESS (DESCRIBED IN PARAGRAPH 8.3 OF THE JUDGMENT OF THE TRIBUNAL AS TRANSACTIONS PURELY OF JOBBING WITHOUT DELIVERY). T HE TRIBUNAL HAS CORRECTLY APPLIED THE PRINCIPLE OF LAW IN ACCEPTING THE POSITION THAT IT IS OPEN TO AN ASSESSEE TO MAINTAIN TWO SEPARATE PORT FOLIOS, ONE RELATING TO INVESTMENT IN SHARES AND ANOTHER RELATI NG TO BUSINESS ACTIVITIES INVOLVING DEALING IN SHARES. THE TRIBUNA L HELD THAT THE DELIVERYBASED TRANSACTIONS IN THE PRESENT CASE, SHO ULD BE TREATED AS THOSE IN THE NATURE OF INVESTMENT TRANSACTIONS AND THE PROFIT RECEIVED THEREFROM SHOULD BE TREATED EITHER AS SHOR T-TERM OR, AS THE CASE MAY BE, LONG-TERM CAPITAL GAIN, DEPENDING UPON THE PERIOD OF THE HOLDING. A FINDING OF FACT HAS BEEN ARRIVED AT BY THE TRIBUNAL AS REGARDS THE EXISTENCE OF TWO DISTINCT TYPES OF TRAN SACTIONS, NAMELY, THOSE BY WAY OF INVESTMENT ON THE ONE HAND AND THOS E FOR THE PURPOSES OF BUSINESS ON THE OTHER HAND. QUESTION (A ) ABOVE, DOES NOT RAISE ANY SUBSTANTIAL QUESTION OF LAW. 3. IN SO FAR AS QUESTION (B) IS CONCERNED, THE TRIB UNAL HAS OBSERVED IN PARAGRAPH 8.1 OF ITS JUDGMENT THAT THE ASSESSEE HAS FOLLOWED A CONSISTENT PRACTICE IN REGARD TO THE NATURE OF THE ACTIVITIES, THE MANNER OF KEEPING RECORDS AND THE PRESENTATION OF S HARES AS M/S MATA SECURITIES INDIA PVT. LTD. ITA NO.1096/MUM/2013 5 INVESTMENT AT THE END OF THE YEAR, IN ALL THE YEARS . THE REVENUE SUBMITTED THAT A DIFFERENT VIEW SHOULD BE TAKEN FOR THE YEAR UNDER CONSIDERATION, SINCE THE PRINCIPLE OF RES JUDICATA IS NOT APPLICABLE TO ASSESSMENT PROCEEDINGS. THE TRIBUNAL CORRECTLY ACCE PTED THE POSITION, THAT THE PRINCIPLE OF RES JUDICATA IS NOT ATTRACTED SINCE EACH ASSESSMENT YEAR IS SEPARATE IN ITSELF. THE TRIBUNAL HELD THAT THERE OUGHT TO BE UNIFORMITY IN TREATMENT AND CONSISTENCY WHEN THE FACTS AND CIRCUMSTANCES ARE IDENTICAL, PARTICULARLY IN TH E CASE OF THE ASSESSEE. THIS APPROACH OF THE TRIBUNAL CANNOT BE F AULTED. THE REVENUE DID NOT FURNISH ANY JUSTIFICATION FOR ADOPT ING A DIVERGENT APPROACH FOR THE ASSESSMENT YEAR IN QUESTION. QUEST ION (B), THEREFORE, DOES NOT ALSO RAISE ANY SUBSTANTIAL QUES TION OF LAW. 4. IN SO FAR AS QUESTION (C) IS CONCERNED, AGAIN TH ERE CANNOT BE ANY DISPUTE ABOUT THE BASIC PROPOSITION THAT THE ENTRIE S IN THE BOOKS OF ACCOUNT ALONE ARE NOT CONCLUSIVE IN DETERMINING THE NATURE OF INCOME. THE TRIBUNAL HAS APPLIED THE CORRECT PRINCI PLE IN ARRIVING AT THE DECISION IN THE FACTS OF THE PRESENT CASE. THE FINDING OF FACT DOES NOT CALL FOR INTERFERENCE IN AN APPEAL UNDER SECTIO N 260A. NO SUBSTANTIAL QUESTION OF LAW IS RAISED. THE APPEAL I S ACCORDINGLY DISMISSED. 2.2. IT IS WORTH QUOTING HERE THAT THE SLP FILED A GAINST THE AFORESAID DECISION BEFORE HONBLE APEX COURT HA S BEEN DISMISSED. THUS, IT CAN BE CONCLUDED THAT THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE RATIO LAID DOWN IN THE AFORESAID CASE BY HONBLE JURISDICTIONAL HIGH COURT . NOW, WE ARE SUMMARIZING HEREUNDER THE LOSS SUFFERED BY THE ASSESSEE ON SALE OF SHARES/MUTUAL FUNDS:- NATURE OF GAINS TYPE OF INVESTMENT AGGREGATE COST SALE PROCEEDS GAIN OR LOSS SHORT TERM MUTUAL FUNDS 25,00,000 25,16,602 16,602 SHORT TERM SHARES 76,89,747 72,22,640 (-),467,107 LONG TERM SHARES 52,28,237 36,07,628 (-)16,20,609 TOTAL (-)20,71,114 M/S MATA SECURITIES INDIA PVT. LTD. ITA NO.1096/MUM/2013 6 THE LD. ASSESSING OFFICER, IN VIEW OF THE ABOVE LOS S, INVOKED THE PROVISIONS OF SECTION 73 OF THE ACT AND TREATED THE RESULTANT LOSS OF RS.20,70,934/- AS LOSS IN SPECULA TION BUSINESS. NOW, QUESTION ARISES, WHETHER INVOKING S ECTION 73 OF THE ACT IS JUSTIFIABLE. THE TERM BUSINESS HAS BEEN DEFINED IN SECTION 2 (13) OF THE ACT, WHICH INCLUDES ANY TR ADE, COMMERCE OR MANUFACTURE OR ANY ADVENTURE OR CONCERN IN THE NATURE OF TRADE, COMMERCE OR MANUFACTURE. MEANING T HEREBY, THE TERM IS OF WIDE IMPORT AND ENCOMPASSES ANY FACE T OF AN OCCUPATION CARRIED ON WITH A PROFIT MOTIVE. WHEREAS , EXPLANATION -2 TO SECTION 28 READS AS UNDER:- WHERE THE SPECULATIVE TRANSACTIONS CARRIED ON BY A S ASSESSEE ARE OF SUCH A NATURE AS TO CONSTITUTE A BUSINESS, THE B USINESS (HEREINAFTER REFERRED TO AS SPECULATION BUSINESS) SHALL BE DEEMED TO BE DISTINCT AND SEPARATE FROM OTHER BUSINESS. THE TERM SPECULATIVE TRANSACTION HAS BEEN PROVIDE D IN SECTION 43(5) OF THE ACT WHICH IS REPRODUCED HEREUN DER:- (5) 'SPECULATIVE TRANSACTION' MEANS A TRANSACTION IN WHICH A CONTRACT FOR THE PURCHASE OR SALE OF ANY COMMODITY, INCLUDIN G STOCKS AND SHARES, IS PERIODICALLY OR ULTIMATELY SETTLED OTHER WISE THAN BY THE ACTUAL DELIVERY OR TRANSFER OF THE COMMODITY OR SCR IPS: PROVIDED THAT FOR THE PURPOSES OF THIS CLAUSE (A) A CONTRACT IN RESPECT OF RAW MATERIALS OR MERC HANDISE ENTERED INTO BY A PERSON IN THE COURSE OF HIS MANUFACTURING OR M ERCHANTING BUSINESS TO GUARD AGAINST LOSS THROUGH FUTURE PRICE FLUCTUATIONS IN RESPECT OF HIS CONTRACTS FOR ACTUAL DELIVERY OF GOO DS MANUFACTURED BY HIM OR MERCHANDISE SOLD BY HIM; OR (B) A CONTRACT IN RESPECT OF STOCKS AND SHARES ENT ERED INTO BY A DEALER OR INVESTOR THEREIN TO GUARD AGAINST LOSS IN HIS HO LDINGS OF STOCKS AND SHARES THROUGH PRICE FLUCTUATIONS; OR M/S MATA SECURITIES INDIA PVT. LTD. ITA NO.1096/MUM/2013 7 (C) A CONTRACT ENTERED INTO BY A MEMBER OF A FORWA RD MARKET OR A STOCK EXCHANGE IN THE COURSE OF ANY TRANSACTION IN THE NATURE OF JOBBING OR ARBITRAGE TO GUARD AGAINST LOSS WHICH MA Y ARISE IN THE ORDINARY COURSE OF HIS BUSINESS AS SUCH MEMBER; OR (D) AN ELIGIBLE TRANSACTION IN RESPECT OF TRADING IN DERIVATIVES REFERRED TO IN CLAUSE (AC) OF SECTION 2 OF THE SECURITIES CO NTRACTS (REGULATION) ACT, 1956 (42 OF 1956) CARRIED OUT IN A RECOGNISED STOCK EXCHANGE; [OR] [(E) AN ELIGIBLE TRANSACTION IN RESPECT OF TRADING IN COMMODITY DERIVATIVES CARRIED OUT IN A RECOGNISED ASSOCIATION 77 [, WHICH IS CHARGEABLE TO COMMODITIES TRANSACTION TAX UNDER CHA PTER VII OF THE FINANCE ACT, 2013 (17 OF 2013),]] SHALL NOT BE DEEMED TO BE A SPECULATIVE TRANSACTION . [EXPLANATION 1].FOR THE PURPOSES OF 79 [CLAUSE (D)], THE EXPRESSIONS (I) 'ELIGIBLE TRANSACTION' MEANS ANY TRANSACTION, (A) CARRIED OUT ELECTRONICALLY ON SCREEN-BASED SYST EMS THROUGH A STOCK BROKER OR SUB-BROKER OR SUCH OTHER INTERMEDIARY REG ISTERED UNDER SECTION 12 OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 (15 OF 1992) IN ACCORDANCE WITH THE PROVISIONS OF THE S ECURITIES CONTRACTS (REGULATION) ACT, 1956 (42 OF 1956) OR THE SECURITI ES AND EXCHANGE BOARD OF INDIA ACT, 1992 (15 OF 1992) OR THE DEPOSI TORIES ACT, 1996 (22 OF 1996) AND THE RULES, REGULATIONS OR BYE-LAWS MAD E OR DIRECTIONS ISSUED UNDER THOSE ACTS OR BY BANKS OR MUTUAL FUNDS ON A RECOGNISED STOCK EXCHANGE; AND (B) WHICH IS SUPPORTED BY A TIME STAMPED CONTRACT N OTE ISSUED BY SUCH STOCK BROKER OR SUB-BROKER OR SUCH OTHER INTERMEDIA RY TO EVERY CLIENT INDICATING IN THE CONTRACT NOTE THE UNIQUE CLIENT I DENTITY NUMBER ALLOTTED UNDER ANY ACT REFERRED TO IN SUB-CLAUSE (A ) AND PERMANENT ACCOUNT NUMBER ALLOTTED UNDER THIS ACT; (II) 'RECOGNISED STOCK EXCHANGE' MEANS A RECOGNISED STOCK EXCHANGE AS REFERRED TO IN CLAUSE (F) OF SECTION 2 OF THE SECUR ITIES CONTRACTS (REGULATION) ACT, 1956 (42 OF 1956) AND WHICH FULFI LS SUCH CONDITIONS AS MAY BE PRESCRIBED AND NOTIFIED BY THE CENTRAL GOVERNMENT FOR THIS PURPOSE; [EXPLANATION 2.FOR THE PURPOSES OF CLAUSE (E), THE EXPRESSIONS (I) 'COMMODITY DERIVATIVE' SHALL HAVE THE MEANING A S ASSIGNED TO IT IN CHAPTER VII OF THE FINANCE ACT, 2013; (II) 'ELIGIBLE TRANSACTION' MEANS ANY TRANSACTION, M/S MATA SECURITIES INDIA PVT. LTD. ITA NO.1096/MUM/2013 8 (A) CARRIED OUT ELECTRONICALLY ON SCREEN-BASED SYST EMS THROUGH MEMBER OR AN INTERMEDIARY, REGISTERED UNDER THE BYE -LAWS, RULES AND REGULATIONS OF THE RECOGNISED ASSOCIATION FOR TRADI NG IN COMMODITY DERIVATIVE IN ACCORDANCE WITH THE PROVISIONS OF THE FORWARD CONTRACTS (REGULATION) ACT, 1952 (74 OF 1952) AND THE RULES, REGULATIONS OR BYE- LAWS MADE OR DIRECTIONS ISSUED UNDER THAT ACT ON A RECOGNISED ASSOCIATION; AND (B) WHICH IS SUPPORTED BY A TIME STAMPED CONTRACT N OTE ISSUED BY SUCH MEMBER OR INTERMEDIARY TO EVERY CLIENT INDICATING I N THE CONTRACT NOTE, THE UNIQUE CLIENT IDENTITY NUMBER ALLOTTED UNDER TH E ACT, RULES, REGULATIONS OR BYE-LAWS REFERRED TO IN SUB-CLAUSE ( A), UNIQUE TRADE NUMBER AND PERMANENT ACCOUNT NUMBER ALLOTTED UNDER THIS ACT; (III) 'RECOGNISED ASSOCIATION' MEANS A RECOGNISED A SSOCIATION AS REFERRED TO IN CLAUSE (J) OF SECTION 2 OF THE FORWA RD CONTRACTS (REGULATION) ACT, 1952 (74 OF 1952) AND WHICH FULFI LS SUCH CONDITIONS AS MAY BE PRESCRIBED AND IS NOTIFIED BY THE CENTRAL GOVERNMENT FOR THIS PURPOSE;] IF THE AFORESAID SECTION IS ANALYZED, ONE FACT IS O OZING OUT THAT UNLESS THE TRANSACTION IS OF THE NATURE, AS SP ECIFIED IN THE MAIN CLAUSE, FALSE WITHIN ANY OF THE TRANSACTIO NS, LISTED IN THE PROVISO, IT WILL BE TREATED AS SPECULATIVE TRAN SACTION UNDER THE ACT, EVEN THOUGH IT MAY NOT BE SO CONSTRU ED UNDER THE GENERAL LAW. IF THE TOTALITY OF FACTS, ARE ANA LYZED, IT IS A MATTER OF RECORD THAT THE ASSESSEE HAD BEEN INVESTI NG IN SHARES FOR THE LAST SO MANY YEARS AND IN THE AUDITE D ACCOUNTS, THE ASSESSEE REFLECTED THE SAME AS INVEST MENT ON YEAR TO YEAR BASIS. IT IS ALSO UNDISPUTED FACT THA T THE INVESTMENT MADE BY THE ASSESSEE IN SHARES IS MUCH L ESS THAN THE WORTH OF THE ASSESSEE WHICH IS MUCH HIGHER. IT IS ALSO NOTED THAT THE ASSESSEE DID NOT BORROW ANY FUNDS TO MAKE THE INVESTMENT IN THE SHARES. THE ONLY QUESTION ARI SES, WHETHER THE PROFIT ON SALE OF SHARES CONSTITUTES BU SINESS M/S MATA SECURITIES INDIA PVT. LTD. ITA NO.1096/MUM/2013 9 INCOME OR CAPITAL GAINS. IN ORDER TO ASCERTAIN AS T O WHETHER THE SHARES WERE PURCHASED BY THE ASSESSEE AS INVEST MENT OR STOCK IN TRADE. THE INTENTION OF THE ASSESSEE BECO MES RELEVANT WHICH CAN BE GATHERED FROM THE FACTS AVAIL ABLE ON RECORD. ADMITTEDLY, IT IS NOT THE ONLY CRITERIA, WH ICH CAN BE ADOPTED AS A CONCLUSIVE TEST AND HAS TO BE ANALYZED ON THE TOUCH SCALE OF VARIOUS JUDICIAL PRONOUNCEMENTS/CIRC ULARS ISSUED FROM TIME TO TIME BY THE CBDT. THE TREATMENT GIVEN TO SUCH PURCHASES IN ITS BOOKS OF ACCOUNTS BY THE ASSE SSEE IS ALSO ONE OF THE RELEVANT FACTOR, WHETHER IT IS TREA TED AS INVESTMENT OR STOCK IN TRADE AND ALSO WHETHER SHOWN OPENING/CLOSING STOCK OR SHOWN SEPARATELY AS INVEST MENT OR NON-TRADING ASSET. ALSO WHETHER THE ASSESSEE BORROW ED MONEY FOR PURCHASING SUCH SHARES AND PAID INTEREST THEREUPON. THE FREQUENCY OF TRANSACTIONS, THE DATES OF PURCHASE AND SALE HOLDING PERIOD ALSO INDICATIVE OF THE INTENTION OF THE ASSESSEE. IT IS NOT WORTHY THAT IN EARLIER YEARS, THE DEPARTMENT HAD BEEN ACCEPTING TO THE STA ND OF THE ASSESSEE AS INVESTMENT IN SHARES, THEREFORE, UNLESS AND UNTIL CONTRARY FACTS ARE BROUGHT ON RECORD, A DIFFERENT V IEW IS NOT EXPECTED, ON THE PRINCIPLE OF CONSISTENCY. SO FAR AS, INVOCATION OF SECTION 73 OF THE ACT IS CONCERNED, T HE CASE OF THE ASSESSEE, IS COVERED BY THE RATIO LAID DOWN BY HONBLE DELHI HIGH COURT IN BHAGWAN DAS RAMESHWAR DAYAL 149 ITR 387 (DEL.). NO WISE BUSINESSMAN WILL SUFFER LOSS NE ITHER THERE IS INTENTION TO SUFFER LOSS RATHER THE INVESTMENT I S GAINFULLY MADE FOR EARNING INCOME, THUS, TREATING THE BUSINES S TRANSACTION AS SPECULATIVE IN NATURE IS THE SUBJECT IVE M/S MATA SECURITIES INDIA PVT. LTD. ITA NO.1096/MUM/2013 10 APPROACH OF THE ASSESSING OFFICER. WE FIND NO INFI RMITY IN THE CONCLUSION OF THE LD. COMMISSIONER OF INCOME TAX (A PPEALS). 2.3. SO FAR AS, ALLOCATING RS.56,86,633/- AS EXPEN SES TOWARDS SPECULATIVE TRANSACTION ARE CONCERNED, SINC E, THE ABOVE GROUNDS HAVE BEEN DECIDED IN FAVOUR OF THE AS SESSEE, BY HOLDING THAT IT WAS NOT A SPECULATIVE BUSINESS TRAN SACTION, THEREFORE, WE FIND NO MERIT IN THE GROUND OF THE AS SESSEE. THE TOTAL TURNOVER OF THE ASSESSEE IS RS.7,76,72,915 A ND LOSS IS ABOUT 1% OF THE TOTAL TURNOVER. THUS, WE FIND NO IN FIRMITY IN UPHOLDING THE ADDITION TO THE EXTENT OF RS.10,08,26 8/- AND DELETING THE ADDITION OF RS.46,50,365/-. THIS GROU ND OF THE REVENUE IS THEREFORE, DISMISSED. 2.4. THE NEXT GROUND PERTAINS TO DELETING RS.1,94, 268/- U/S 36(1)(VA) OF THE ACT ON THE GROUND THAT THE PAY MENT OF PROVIDENT FUND CONTRIBUTION WAS MADE BEYOND THE PRE SCRIBED DUE DATE (BY THE ASSESSING OFFICER ). THE STAND OF THE ASSESSEE IS THAT THE EMPLOYEE SHARE WAS MADE WITHIN THE DUE DATE. WE NOTE THAT ASSESSEE MADE PAYMENT OF RS.1,94,268/-, B EING THE EMPLOYEES CONTRIBUTION, OF THE MONTH OF SEPTEMBER 2 008 TO THE PROVIDENT FUND ACCOUNT BEYOND THE DUE DATE I.E. 15/10/2008. THE ASSESSEE MADE THE PAYMENT WITHIN TH E GRACE PERIOD OF FIVE DAYS, THUS, THERE IS NO DELAY OF PAY MENT THE AMOUNT. THE CASE OF THE ASSESSEE IS COVERED BY THE DECISION FROM HONBLE DELHI HIGH COURT IN CIT VS P. M. ELECT RONICS (2008) 220 CTR (DEL.) 635, WHEREIN, IT WAS HELD THA T IF THE PAYMENT IN PF AND ESI ACCOUNT ARE MADE BEFORE THE D UE DATE M/S MATA SECURITIES INDIA PVT. LTD. ITA NO.1096/MUM/2013 11 OF FILING OF RETURN U/S 139 OF THE ACT THEN NO DISA LLOWANCE OF SUCH PAYMENT IS TO BE MADE U/S 43B OF THE ACT. THUS , WE FIND NO INFIRMITY IN THE CONCLUSION OF THE LD. COMMISSIO NER OF INCOME TAX (APPEALS). THE APPEAL OF THE REVENUE IS THEREFORE, DISMISSED. FINALLY, THE APPEAL OF THE REVENUE IS, THEREFORE, DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 26/10/2015. SD/- SD/- ( RAJESH KUMAR ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER % MUMBAI; ( DATED : 26/10/2015 F{X~{T? P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. 0 0 1$ ( *+ ) / THE CIT, MUMBAI. 4. 0 0 1$ / CIT(A)- , MUMBAI 5. 34 .$ ! , 0 *+' *! 5 , % / DR, ITAT, MUMBAI 6. 6' 7% / GUARD FILE. / BY ORDER, /3+$ .$ //TRUE COPY// / (DY./ASSTT. REGISTRAR) , % / ITAT, MUMBAI.