ACIT 16(3), MUMBAI V. DINESH BHANSALI, MUMBAI

ITA 1139/MUM/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71206 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 23-05-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 17-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIRAJ BANSAL
• Assessee Lawyers: MATHURIA
• Keywords: Business income; Rule of consistency
• Section: 143(3)

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D, MUMBAI .. , ! ' # , $ ', % BEFORE SHRI R.S.SYAL, AM AND SHRI VIVEK VARMA, JM ITA NO.1139/MUM/2012 : ASST.YEAR 2008-2009 THE ASST.COMMISSIONER OF INCOME-TAX CIRCLE 16(3) MUMBAI. SHRI DINESH P.BHANSALI STERLING METAL DISTRIBUTORS 1 ST FLOOR, ZAVERI BUILDING 6 TH V.P.ROAD, MUMBAI 400 004. PAN : ADYPB9437B. ( &' / // / APPELLANT) ) ) ) ) / VS. ( *+&'/ RESPONDENT) &' , ,, , - - - - / APPELLANT BY : SHRI NIRAJ BANSAL *+&' , - , - , - , - / RESPONDENT BY : SHRI M.S.MATHURIA ) , .! / / / / DATE OF HEARING : 10.09.2013 /01 , .! / DATE OF PRONOUNCEMENT : 11.09.2013 ' 2 ' 2 ' 2 ' 2 / / / / O R D E R PER R.S.SYAL (AM) : THIS APPEAL BY THE REVENUE ARISES OUT OF THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 29.11.2011 IN RELATION TO THE ASSESSMENT YEAR 2008-2009. 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS ABOUT TH E DIRECTION OF THE LEARNED CIT(A) TO TREAT THE INCOME FROM TRANSACTION S OF PURCHASE AND SALE OF SHARES AS `SHORT TERM CAPITAL GAIN INSTEAD OF `BUSINESS INCOME ASSESSED BY THE ASSESSING OFFICER. ITA NO.1139/MUM/2012. SHRI DINESH P.BHANSALI. 2 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E SHOWED SHORT TERM CAPITAL GAIN OF ` 16,49,073 ON TRANSFER OF SHARES. ON CONSIDERING THAT THE HOLDING PERIOD WAS QUITE LESS, THE ASSESS ING OFFICER HELD THAT SUCH INCOME FROM TRANSFER OF SHARES WAS LIABLE TO B E ASSESSED AS `BUSINESS INCOME. THE LEARNED CIT(A) OVERTURNED TH E ASSESSMENT ORDER ON THIS POINT BY CONSIDERING THE ORDERS PASSE D BY THE ASSESSING OFFICER U/S 143(3) FOR THE IMMEDIATELY TWO PRECEDIN G ASSESSMENT YEARS. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE RELEVANT MATERIAL ON RECORD. IT IS OBSERVED THAT THE ASSESSE E DECLARED INCOME OF ` 16.49 LAKH FROM TRANSFER OF SHARES AS SHORT TERM CA PITAL GAIN ON THE PREMISE THAT HE WAS HOLDING THE SHARES AS INVESTOR. THE ASSESSING OFFICER HAS HELD SUCH INCOME AS ARISING FROM BUSINE SS IN VIEW OF THE FACT THAT THE HOLDING PERIOD WAS QUITE LESS. THE LE ARNED CIT(A) HAS DRAWN A TABLE SHOWING COMPARISON BETWEEN THE FIGURE S OF TWO PRECEDING ASSESSMENT YEARS VIS--VIS THE CURRENT YE AR. THERE IS NO DOUBT NUMBER OF PURCHASE/SALE TRANSACTION OF SHARES HAS INCREASED IN COMPARISON WITH THE PRECEDING YEARS. HOWEVER THE FA CT, THOUGH RELEVANT BUT NOT DECISIVE, REMAINS THAT THE OVER AL L INVESTMENT IN SHARES IN TERMS OF PERCENTAGE OF CAPITAL IS LESS TH AN 100% AND IS ALMOST EQUAL TO THAT OF THE PRECEDING YEAR. THE FUR THER FACT THAT NO BORROWINGS WERE MADE FOR INVESTMENT IN SHARES STREN GTHENS THE ASSESSEES VIEW OF HOLDING THESE SHARES AS INVESTME NT. IT IS RELEVANT TO OBSERVE THAT THE ASSESSEE EARNED SIMILAR INCOME FRO M TRANSFER OF SHARES IN THE IMMEDIATELY TWO PRECEDING ASSESSMENT YEARS AS WELL. ITA NO.1139/MUM/2012. SHRI DINESH P.BHANSALI. 3 BOTH THE YEARS WERE SUBJECTED TO SCRUTINY ASSESSMEN T AND THE ASSESSING OFFICER, IN HIS ORDERS PASSED U/S 143(3) , ACCEPTED THE SHARES AS `INVESTMENT AND INCOME THERE FROM AS `S HORT TERM / LONG TERM CAPITAL GAIN. IT IS FURTHER RELEVANT TO NOTE THAT THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. GOPAL PUROHIT [(2011) 336 ITR 287 (BOM.)] HAS EMPHASIZED ON THE PRINCIPLE OF CONSISTENCY. IN THIS CASE THE HONBLE HIGH COURT, DEALING WITH S IMILAR ISSUE, HELD THAT : THERE OUGHT TO BE UNIFORMITY IN TREATMENT A ND CONSISTENCY WHEN THE FACTS AND CIRCUMSTANCES ARE IDENTICAL. A S INCOME FROM SALE OF SHARES HAS BEEN CONSISTENTLY ACCEPTED AS SH ORT TERM / LONG TERM CAPITAL GAIN IN PRECEDING YEARS, WE SEE NO REASON F OR OBSERVING DEPARTURE FOR THE CURRENT YEAR. IN VIEW OF THE FORE GOING DISCUSSION, WE ARE OF THE CONSIDERED OPINION THAT THE LEARNED CIT( A) HAS TAKEN AN UNIMPEACHABLE VIEW. WE, THEREFORE, APPROVE THE SAME . 5. 3 .4 5 !36 , 6. 78 IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED ON THIS 11 TH DAY OF SEPTEMBER, 2013. ' 2 , /01 9')4 0 , : SD/- SD/- (VIVEK VARMA) (R.S.SYAL) $ ' $ ' $ ' $ ' / JUDICIAL MEMBER ! ' ! ' ! ' ! ' / ACCOUNTANT MEMBER MUMBAI ; 9') DATED : 11 TH SEPTEMBER, 2013. DEVDAS* ITA NO.1139/MUM/2012. SHRI DINESH P.BHANSALI. 4 ' 2 , *$.;# < #1. ' 2 , *$.;# < #1. ' 2 , *$.;# < #1. ' 2 , *$.;# < #1./ COPY OF THE ORDER FORWARDED TO : 1. &' / THE APPELLANT 2. *+&' / THE RESPONDENT. 3. = () / THE CIT, MUMBAI. 4. = / CIT(A) 27, MUMBAI. 5. #@: *$.$) , , / DR, ITAT, MUMBAI 6. : A / GUARD FILE. ' 2) ' 2) ' 2) ' 2) / BY ORDER, +#. *$. //TRUE COPY// B B B B/ // /7 6 7 6 7 6 7 6 ( DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI