DCIT, C.C. - XXVIII, Kolkata, Kolkata V. Smt. Vijaya Srinivasan, wife of Late K. Srinivasan, Kolkata

ITA 1184/KOL/2010

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70419 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2013
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 10-06-2010
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAS
• Assessee Lawyers: D S DAMLE
• Keywords: Business income
• Section: 143(3)

Judgement Text

, A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE , /AND . . . . ''# ''# ''# ''#, $% ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI ABRAHAM P. GEORGE, AM] & & & & / I.T.A NO. 1184/KOL/2010 '( )* '( )* '( )* '( )*/ // / ASSESSMENT YEAR: 2007-08 DEPUTY COMMISSIONER OF INCOME-TAX, VS. SMT. VIJAY A SRINIVISAN, W/O LATE CENTRAL CIRCLE-XXVIII, KOLKATA. K. SRINIVASAN, ( PAN: AMGPS8648N) (,- /APPELLANT ) (./,-/ RESPONDENT ) DATE OF HEARING : 08.11.2013 DATE OF PRONOUNCEMENT: 21.11.2013 FOR THE APPELLANT: SMT. RANU BISWAS, SR. DR FOR THE RESPONDENT: SHRI D. S. DAMLE, CA $0 / ORDER PER BENCH: THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A), CENTRAL-1, KOLKATA IN APPEAL NO. 38/CC-XXVIII/CIT(A),C-1/09-10 DATED 12.08.2010. ASSESSMENT WAS FRAMED BY DCIT, CC-XXVIII, KOLKATA U/S. 143(3) OF THE INCOME-TAX AC T, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2007-08 VIDE HIS ORDER DA TED 22.12.2009. 2. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGAI NST THE ORDER OF CIT(A) DIRECTING AO TO ASSESSEE THE INCOME AS LONG TERM CAPITAL GAIN AND N OT AS BUSINESS INCOME ON ACCOUNT OF TRANSACTIONS OF SALE AND PURCHASE OF SHARES. FOR T HIS, REVENUE HAS RAISED FOLLOWING GROUND NO.1: 1. THAT IN THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) HAS ERRED IN ALLOWING INCOME EARNED BY THE ASSESSEE DURING THE F INANCIAL YEAR AS LIABLE TO ASSESSED AS LTCG AND NOT AS BUSINESS INCOME THROUGH THERE WA S THE FACTUAL ASPECT OF FREQUENCY AS WELL AS VOLUMINOUS TRANSACTIONS OF SALE AND PURC HASE OF SHARES BY THE ASSESSEE. 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE DECLA RED LONG TERM CAPITAL GAIN ON SALE OF SHARES AT RS.95,53,779/- AND SHORT TERM CAPITAL GAI N AT RS.33,52,303/-. THE AO NOTED THAT THE ASSESSEE IS DERIVING THESE CAPITAL GAINS WHICH WERE HELD BY HIM IN EARLIER FY ALSO BUT HE FURTHER NOTED THAT IN AY 2006-07 THE TRANSACTIONS OF SHARES WERE TREATED AS ADVENTURE IN THE NATURE OF TRADE CONSIDERING THE VOLUME AND FREQUENCY OF TRANS ACTION. ACCORDING TO AO, SIMILAR IS THE 2 ITA NO. 1184/K/2010 SMT. VIJAYA SRINIVASAN , AY:2007-08 POSITION IN AY 2007-08 ALSO. ACCORDING TO HIM, THE RE IS NO CHANGE IN SHARE PATTERN AND TRANSACTIONS OF SHARES WERE IN BULK AND FREQUENT. ACCORDINGLY, HE TREATED THE LONG TERM CAPITAL GAIN AND SHORT TERM CAPITAL GAIN AS BUSINES S INCOME BY CHANGING THE HEAD OF INCOME FROM CAPITAL GAINS TO INCOME FROM BUSINESS. AGGRIE VED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO AFTER CONSIDERING THE SUBMISSION OF ASS ESSEE AS WELL AS THE ORDER OF CIT(A) IN AY 2006-07 AND ASSESSMENT ORDER FOR ASSESSMENT YEARS 2 004-05 AND 2005-06 WHEREIN CAPITAL GAIN ON SALE OF SHARES WAS ACCEPTED AS IT IS I.E. WHETHE R LONG TERM CAPITAL OR SHORT TERM CAPITAL GAINS, AS THE CASE MAY BE. THE CIT(A) DIRECTED THE AO TO ASSESS THE PROFIT FROM SHARE TRANSACTIONS UNDER THE HEAD CAPITAL GAIN AND NOT UNDER THE HEAD BUSINESS INCOME BY OBSERVING IN PARA 3.2 AS UNDER: CONSIDERING THE FACT THAT THE HEAD OF THE ASSESSM ENT OF SHARE TRANSACTION HAS BEEN CHANGED IN THE YEAR UNDER CONSIDERATION ON IDENTICA L FACTS. FURTHER THE AO HAS NOT BROUGHT ON RECORD ANY NEW FACTS IN SUPPORT OF THE D ISALLOWANCE. HENCE RESPECTFULLY FOLLOWING THE DECISION OF MY PREDECESSOR IN THE AY 2006-07, THE APPEAL OF THE APPELLANT IS ALLOWED. ACCORDINGLY THE AO IS DIRECTED TO ASSE SS THE PROFIT FROM SHARE TRANSACTION UNDER THE HEAD CAPITAL GAINS. FURTHER THE BENEFI TS OF SECTION 10(38) OR OF SECTION 111A IS CONSEQUENTIAL OF AND INCIDENTAL TO THE TIMI NG OF THE TRANSACTION. AGGRIEVED, NOW REVENUE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND FROM THE FACTS OF THE PRESENT CASE THAT THE AO IN ASSESSEES OWN CASE FOR AY 2004-05 U/S. 143(3) OF THE ACT ORDER DATED 22.09.2006 AND F OR AY 2005-06 ORDER DATED 04.05.2007 ALLOWED THE CLAIM OF LONG TERM CAPITAL GAIN AND SHO RT TERM CAPITAL GAIN ON SALE OF SHARES AT RS.39,45,305/- AND 75,29,591/- RESPECTIVELY. FURTH ER, IT IS ALSO A FACT THAT THE ASSESSEES SCRIPS I.E. SOME OF THE SCRIPS WERE PURCHASED AS EARLY AS IN FY 1981-82 AND THEREAFTER AND THE AO HAS NOWHERE DEMONSTRATED HOW THE ASSESSEE IS FREQUENTL Y PURCHASING AND SELLING THE SHARES. PROBABLY, ON ACCOUNT OF SHEER VOLUME OR SURPLUS I.E . SEVERAL TIMES HIGHER THAN EARLIER YEARS, HE HAS CHANGED THE HEAD OF INCOME. THE ASSESSEE IS NO T SHOWN TO HAVE PURCHASED OR SOLD THE SCRIPS OF SAME COMPANY WITH ANY FREQUENCY BY THE AO IN HIS ASSESSMENT ORDER. AS ARGUED BY LD. COUNSEL FOR THE ASSESSEE BEFORE US NOW THAT THI S ISSUE IS SQUARELY COVERED IN FAVOUR OF ASSESSEE EVEN BY COORDINATE BENCH DECISION OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR AY 2006-07 AND 2008-09 IN ITA NO.891/K/2009 AND ITA NO .1090/K/2011 DATED 08.06.2012 AND 17.1.2012 RESPECTIVELY. 3 ITA NO. 1184/K/2010 SMT. VIJAYA SRINIVASAN , AY:2007-08 IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES THAT T RIBUNAL IS CONSISTENTLY TREATING THE INCOME DECLARED BY ASSESSEE AS LONG TERM CAPITAL GA IN OR SHORT TERM CAPITAL GAIN UNDER THE HEAD CAPITAL ACCOUNT ONLY AND NOT UNDER THE HEAD BU SINESS INCOME. WE ALSO ACCEPT THE SAME. IN VIEW OF THE ABOVE, THE ORDER OF CIT(A) IS CONFIR MED AND THE APPEAL OF REVENUE IS DISMISSED. 5. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. 6. ORDER IS PRONOUNCED IN THE OPEN COURT ON 21 ST NOVEMBER 2013. SD/- SD/- . . . . ''# ''# ''# ''# , $% , (ABRAHAM P. GEORGE) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 21 ST NOVEMBER, 2013 12 '3' 4 JD.(SR.P.S.) $0 5 . 6$ )7- COPY OF THE ORDER FORWARDED TO: 1 . ,- / APPELLANT DCIT, C. C. XXVIII, KOLKATA. 2 ./,- / RESPONDENT SMT. VIJAYA SRINIVASAN, W/O LATE K. SR INIVISAN, 14, BALLYGUNGE ROAD, KOLKATA-19. 3 . 0' ( )/ THE CIT(A), KOLKATA 4. 5. 0' / CIT KOLKATA. <= .' / DR, KOLKATA BENCHES, KOLKATA / ./ TRUE COPY, $0'>/ BY ORDER, ' /ASSTT. REGISTRAR .