DCIT, Bangalore V. M/s Kapur Investments Pvt. Ltd., Bangalore

ITA 1189/BANG/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68359 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 21-11-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 13-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: L V BHASKARA REDDY
• Assessee Lawyers: H N KHINCHA
• Keywords: Capital asset; Business income; Source of fund; Cost of acquisition
• Section: 43(5)

Judgement Text

ITA NOS 1188 & 1189 OF 2012 KAPUR INVESTMENTS PVT L TD BANGALORE PAGE 1 OF 10 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BBENCH, BANGALORE BEFORE SHRI GEORGE GEORGE K. JUDICIAL MEMBER AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER ITA NOS.1188 & 1189/BANG/2012 (ASSESSMENT YEARS: 2006-07 & 2008-09) DY. COMMISSIONER OF INCOME TAX, CIRCLE 11(5), NO. 14/3, 5 TH FLOOR, RASTROTHANA BHAVAN, NRUPATHUNGA ROAD, BANGALORE 560001 VS. M/S. KAPUR INVESTMENTS (P) LTD., NO.12, BRIGADE ROAD, BANGALORE 560001 PAN: AABCK 6488 L (APPELLANT) (RESPONDENT) DEPARTMENT BY: SHRI L.V.BHASKARA REDDY, DR ASSESSEE BY: SHRI H.N. KHINCHA, CA DATE OF HEARING: 21/11/2013 DATE OF PRONOUNCEMENT: 29/11/2013 O R D E R PER GEORGE GEORGE K. J.M. THESE TWO APPEALS OF THE REVENUE ARE DIRECTED AGAI NST THE CONSOLIDATED ORDER OF THE CIT (A)-I, BANGALORE DATE D 28.6.2012. THE RELEVANT ASSESSMENT YEARS ARE 2006-07 AND 2008-09. 2. THE ONLY GRIEVANCE OF THE REVENUE IN BO TH THE APPEALS IS THAT THE CIT (A) ERRED IN HOLDING THAT THE SURPLUS OF RS.1,72,29,025/- AND RS.82,82,927/- ON ACCOUNT OF S ALE OF SHARES BY THE ASSESSEE HAVE TO BE TREATED AS SHORT-TERM OR LONG-TERM CAPITAL GAINS INSTEAD OF BUSINESS INCOME . 3. AS THE ISSUE RAISED IN THESE APPEALS BEIN G IDENTICAL AND PERTAINING TO THE SAME ASSESSEE, FOR THE SAKE OF CO NVENIENCE, ITA NOS 1188 & 1189 OF 2012 KAPUR INVESTMENTS PVT L TD BANGALORE PAGE 2 OF 10 BOTH THE APPEALS WERE HEARD TOGETHER AND DISPOSED O FF IN THIS CONSOLIDATED ORDER. 4. BRIEFLY STATED, THE ASSESSEE COMPANY I S ENGAGED IN THE FINANCE AND FILM, BUSINESS. WHILE CONCLUDING THE A SSESSMENT FOR THE ASSESSMENT YEAR 2006-07, THE AO TREATED THE SUR PLUS ON ACCOUNT OF INVESTMENT IN SHARES AS BUSINESS INCOME INSTEAD OF CAPITAL GAINS AS CLAIMED BY THE ASSESSEE. AGGRIE VED, THE ASSESSEE TOOK UP THE ISSUE BEFORE THE THEN CIT (A) WHO DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE VIDE HIS ORDER IN ITA NO.103/AC-11(5)/CIT(A)-I/08-09 DATED 18.12.2009. A GGRIEVED, THE REVENUE HAD APPEALED BEFORE THE TRIBUNAL. THE EARLIER BENCH OF THIS TRIBUNAL IN ITS FINDINGS IN ITA NO.39 0/BANG/2010 DATED 23.9.2010 REMITTED BACK THE ISSUE TO THE FILE OF THE CIT (A) FOR DISPOSAL OF THE ISSUE DE NOVO. ACCORDINGLY, TH E ISSUE CAME FOR ADJUDICATION BEFORE THE PRESENT CIT (A). DURING TH E COURSE OF HEARING, THE ASSESSEE JUSTIFIED THE TRANSACTIONS AS INVESTMENTS AND, ACCORDINGLY, CONTENDED THAT THE SURPLUS WAS RI GHTLY TREATED AS CAPITAL GAINS IN ITS RETURN OF INCOME. THE ISSU E IS DECIDED BY THE CIT (A) IN FAVOUR OF THE ASSESSEE FOR THE FOLLO WING REASONS, NAMELY: 3.3. THE ISSUE IN QUESTION HAS TO BE DECIDED TAKING INTO ACCOUNT THE OVERALL CIRCUMSTANCES OF TH E CASE. THE AR OF THE APPELLANT CITED VARIOUS DECISIONS IN SUPPORT OF THE CLIENT BUT IT IS VERY DIFFICULT TO FIND ANYTHING AS A GENERAL RULE. THE EXACT NATURE OF THE TRANSACTIONS CANNOT BE DETERMINED BY HIGHLIGHTING ONE OR TWO FEATURES. THEREFORE, THE ISSUE IS DECIDED BASED ON THE FOLLOWING FEATURES; ITA NOS 1188 & 1189 OF 2012 KAPUR INVESTMENTS PVT L TD BANGALORE PAGE 3 OF 10 (I) VOLUME OF TRANSACTIONS: AS PER THE DECISION OF THE BOMBAY HIGH COURT IN THE CASE OF GOPAL PUROHIT 228 CTR 58, THE VOLUME AND TH E NUMBER OF TRANSACTIONS ARE NOT DECISIVE IN UNDERSTANDING THE TRUE NATURE OF TRANSACTION. THEREFORE, IT IS NOT CORRECT TO DECIDE THE ISSUE BA SED ON THE HIGH VOLUME OF TRANSACTIONS. IT IS TRUE THAT T HE ASSESSEE IN THE INSTANT CASE HAD HUGE VOLUME OF TRANSACTIONS MAKING AN INVESTMENT OF RS.4.62 CRORES AS ON 31/3/2007. (II) TREATMENT IN THE BOOKS OF ACCOUNT: THE APPELLANT HAS SHOWN THE VALUE OF SHARES AS INVESTMENTS IN THE BOOKS OF ACCOUNTS. ACCORDINGL Y, THEY ARE CLASSIFIED IN THE BALANCE SHEET. THE ASSE SSEE HAS BEEN CONSISTENTLY FOLLOWING THE SAME AS CAN BE SEEN FROM THE BALANCE SHEET AS ON 31/3/2005, 31/3/2004 AND 31/3/2003. (III) VALUATION OF SHARES: IT IS SEEN FROM THE DETAILED SUBMISSIONS FILED BY T HE APPELLANT AND ALSO DETAILS THAT THE APPELLANT HAS B EEN VALUING THE SHARES AT COST. THIS IS ONE OF THE POI NTS WHICH THE HONBLE ITAT WANTED TO BE ADJUDICATED BY THE CIT (A). ACCORDINGLY, THE DETAILS OF VALUATION S FILED BY THE APPELLANT ALONG WITH THE SUBMISSIONS, IT IS SEEN THAT THE VALUATION IS DONE AT COST BY THE APPELLANT WHICH FURTHER STRENGTHENS THEIR CLAIM. (IV) MODUS OPERANDI/THE BUSINESS INFRASTRUCTURE: THE APPELLANT HAS BEEN INVESTING FUNDS IN M/S. KOTA K SECURITIES LTD UNDER PORTFOLIO MANAGEMENT SCHEME [PMS]. IT IS STATED THAT THE APPELLANT HAS NOT IND ULGED IN PURCHASE AND SALE OF SHARES DIRECTLY BUT ONLY THROUGH THE ABOVE-SAID BROKER UNDER PMS. THEREFORE , THE APPELLANT DOES NOT HAVE ANY SEPARATE BUSINESS INFRASTRUCTURE TO CARRY OUT THEIR TRANSACTIONS FOR THE PURPOSE OF BUSINESS. ITA NOS 1188 & 1189 OF 2012 KAPUR INVESTMENTS PVT L TD BANGALORE PAGE 4 OF 10 (V) THE MAIN ACTIVITY: THE ASSESSEE IS MAINLY ENGAGED IN FINANCE AND FILM BUSINESS AND THE SHARE TRANSACTIONS ARE DONE THROUG H KOTAK SECURITIES LTD. IT MAY BE SEEN THAT THE APPEL LANT SHOWED A SUBSTANTIAL INCOME I.E., RS.20,70,045/- FR OM THE FINANCE AND FILM BUSINESS. THUS, THE APPELLANT IS INVOLVED MAINLY IN THE FILM BUSINESS THOUGH THE SURPLUS ON ACCOUNT OF SHARES IS MORE BECAUSE OF INVESTMENT THROUGH THE BROKER. (VI) SOURCE OF FUNDS: NO DOUBT, THE APPELLANT USED THE BORROWED FUNDS TO SOME EXTENT FOR THE PURCHASE OF SHARES BUT THERE IS NO PROVISION UNDER THE I.T. ACT WHICH PROHIBITS THE ASSESSEE FROM MAKING INVESTMENTS IN CAPITAL ASSETS USING THE BORROWED FUNDS. IT IS A COMMON PRACTICE THAT PEOPLE BORROW FUNDS FOR MAKING INVESTMENTS FOR GETTING HIGHER RATE OF RETURN. AS RIGHTLY POINTED OUT BY THE APPELLANT IN ITS SUBMISSIONS, EVEN INTEREST IS ALLOWED AS A PART OF THE COST OF ACQUISITION WHILE COMPUTING CAPITAL GAINS. THEREFORE, THE BORROWALS BY THE APPELLANT CANNOT BE VIEWED NEGATIVELY. (VII) CONSISTENCY: THE APPELLANT HAS BEEN CONSISTENTLY FOLLOWING THE SAME METHOD SHOWING THESE TRANSACTIONS AS AN INVESTMENT IN ITS BOOKS OF ACCOUNTS AND THE SAME WE RE ACCEPTED BY THE DEPARTMENT. IT IS ARGUED BY THE APPELLANT THAT THERE ARE NO NEW FACTS IN THE PRESEN T ASSESSMENT YEAR BASED ON WHICH THE TREATMENT CAN BE DISTURBED. THE ARGUMENT OF THE APPELLANT CANNOT BE IGNORED. (VIII) INCOME FROM DERIVATIVES: ONE OF THE REASONS GIVEN IN THE ASSESSMENT ORDER BY THE AO IS THAT THE APPELLANT TREATED THE DERIVATIVE TRANSACTIONS AS BUSINESS INCOME/LOSS. IN THE CASE OF DERIVATIVE TRANSACTIONS, THERE IS NO DELIVERY OF SH ARES BECAUSE OF THE ABSENCE OF ANY UNDERLYING ASSET. AS PER THE PRINCIPLES OF ACCOUNTANCY AND THE PROVISION S OF THE I.T. ACT, SUCH TRANSACTIONS ARE TO BE TREATED A S ITA NOS 1188 & 1189 OF 2012 KAPUR INVESTMENTS PVT L TD BANGALORE PAGE 5 OF 10 BUSINESS TRANSACTIONS ONLY. IN FACT, THE DERIVATIV E TRANSACTIONS WERE CONSIDERED AS SPECULATIVE TRANSACTIONS BEFORE THE AMENDMENT TO THE PROVISIONS OF SECTION 43(5) OF THE ACT. THEREFORE, THE INCOME OF RS.1,72,29,025/- IS TO BE TREATED AS INCOME FROM BUSINESS TRANSACTIONS AND NOT AS INCOME FROM SPECULATIVE TRANSACTIONS ONLY. (IX) INTENTION: IN VIEW OF THE ABOVE, IT IS CLEAR THAT THE INTENTIO N AND CONDUCT OF THE APPELLANT ARE TO SHOW THAT THE APPEL LANT IS CARRYING OUT THE SAID TRANSACTIONS AS AN INVESTO R. THEREFORE, THE TRANSACTIONS ARE TO BE TREATED AS IN COME FROM CAPITAL GAINS. CONSIDERING ALL THE FEATURES I N THE INSTANT CASE AND ALSO THE GUIDELINES ISSUED BY THE CBDT VIDE THEIR CIRCULAR NO.4 OF 2007 DATED 15/6/2007, IT CAN BE SAFELY HELD THAT THE APPELLANT INVESTED IN SHARES WITH AN INTENTION OF HOLDING THE M AS INVESTMENTS AND THE SURPLUS ON ACCOUNT OF SALE O F THESE SHARES HAVE TO BE TREATED AS SHORT-TERM OR LO NG- TERM CAPITAL GAINS DEPENDING ON THE PERIOD OF HOLDI NG. THEREFORE, THE AO IS DIRECTED NOT TO TREAT THIS AS BUSINESS INCOME. FOR AN IDENTICAL ISSUE TO THAT OF THE ASSESSMENT YEAR 2008-09, THE CIT (A) HAD REASONED THUS: 2. THE FACTS OF THE CASE FOR THE ASSESSMENT YEAR 2008-09 ARE MUTATIS MUTANDIS SIMILAR TO THOSE OF THE ASSESSMENT YEAR 2006-07. THE APPELLANTS CONTENTIONS AGAINST THE AOS ACTION IN THE ASSESSMENT ORDER IN TREATING THE INCOME FROM SALE O F MUTUAL FUNDS AND SHARES AS INCOME FROM BUSINESS INSTEAD OF SHORT-TERM OR LONG-TERM CAPITAL GAINS AS CLAIMED BY THE APPELLANT ARE MUTATIS MUTANDIS WITH REFERENCE TO THE INCOME (OF) THE SAME. HENCE, FOR VERY SAME REASONING AS HAVE BEEN GIVE BY ME IN RELATION TO THE APPEAL FOR THE ASSESSMENT YEAR 2006-07 DISPOSED OF SUPRA, THE APPELLANTS CONTENTION THAT THE INCOME FROM CAPITAL GAINS, SHORT-TERM OR LONG-TERM CAPITAL DEPENDING UPON THE PERIOD OF HOLDING OF SUC H ITA NOS 1188 & 1189 OF 2012 KAPUR INVESTMENTS PVT L TD BANGALORE PAGE 6 OF 10 ASSET IS ACCEPTABLE. THEREFORE, THE AO IS SIMILARL Y DIRECTED NOT TO TREAT THIS AS BUSINESS INCOME FOR T HE ASSESSMENT YEAR 2008-09 ALSO 5. AGGRIEVED BY THE FINDINGS OF THE CIT (A) (SUPRA), THE REVENUE HAS COME UP BEFORE US WITH THE PRESENT APPE ALS. DURING THE COURSE OF HEARING BEFORE US, IT WAS CONTENDED B Y THE LEARNED DR THAT THE CIT (A) ERRED IN ALLOWING THE RELIEF ON THE BASIS OF THE ASSESSEE SHOWING THE VALUE OF SHARES AS INVESTMENT S IN THE BOOKS OF ACCOUNT AND VALUED THE SHARES AT COST AS T HE ACCOUNTING UNDER THE HEAD INVESTMENTS DOES NOT CHANGE THE CHARACTERIZATION OF INCOME/INTEREST OF THE ASSESSEE . IT WAS, FURTHER, CONTENDED THAT THE CIT (A) ERRED IN ALLOWI NG THE RELIEF ON THE BASIS THAT THE ASSESSEE DID NOT HAVE ANY SEPARA TE BUSINESS INFRASTRUCTURE TO CARRY OUT ITS SHARE TRANSACTIONS FOR THE PURPOSE OF BUSINESS AND THE ASSESSEE HAD INVESTED FUNDS THR OUGH M/S. KOTAK SECURITIES LIMITED UNDER PORTFOLIO MANAGEMENT SCHEME, WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAD ENTRUSTED THE BUSINESS OF PURCHASE AND SALE OF SHARES TO M/S. KOT AK SECURITIES LIMITED WHO HAD TRADED IN SHARES ON BEHALF OF THE ASSESSEE. THE LEARNED DR ALSO FOUND FAULT WITH THE CIT (A) IN HOL DING THAT THE USE OF BORROWED FUNDS FOR THE PURCHASE OF SHARES CA NNOT BE VIEWED NEGATIVELY. IN CONCLUSION, IT WAS POINTED O UT THAT THE CIT (A) HAD FAILED TO APPRECIATE THE FACT THAT THE ASSE SSEE HAD EARNED PARTLY DIVIDEND INCOME OF RS.4,89,178/- AND RS. 7,2 3,363/- WHEN COMPARED TO THE SURPLUS INCOME OF RS.1,72,29,0 25/- AND RS.82,82,927/- EARNED ON SALE OF SHARES FOR THE AY S 2006-07 AND 2008-09 RESPECTIVELY. IT WAS, THEREFORE, PLEAD ED THAT THE ORDER OF THE CIT (A) REQUIRES TO BE REVERSED IN SO FAR AS THE ISSUE UNDER DISPUTE FOR BOTH THE AYS AND THAT OF THE AO B E RESTORED. ITA NOS 1188 & 1189 OF 2012 KAPUR INVESTMENTS PVT L TD BANGALORE PAGE 7 OF 10 5. 1 ON THE OTHER HAND, THE LEARNED AR PRES ENT SUPPORTED THE FINDINGS OF THE CIT (A) ON THE ISSUE. TO SUBST ANTIATE HIS ARGUMENTS, THE LEARNED AR HAD PLACED STRONG RELIANC E ON THE FOLLOWING CASE LAWS, NAMELY: (I) ITO V. RADHA BIRJU PATEL 46 SOT 23 (MUM); (II) MAHENDRA C SHAH V. ADIT 19 TXMANN.COM 350 (MUM ); (III) CIT V. NIRAJ AMIDHAR SURTI 238 CTR 294 (GUJ). 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SU BMISSIONS, PERUSED THE RELEVANT MATERIALS ON CASE RECORDS AND ALSO THE CASE LAWS ON WHICH THE LEARNED AR HAD PLACED STRONG RELI ANCE. AS A MATTER OF FACT, THE ISSUE HAS SINCE BEEN DELIBERATE D EXHAUSTIVELY BY THE CIT (A) AND CAME TO THE RIGHT CONCLUSION THA T THE ASSESSEE HAD INVESTED IN SHARES WITH AN INTENTION OF HOLDING THEM AS INVESTMENTS AND THE SURPLUS ON ACCOUNT OF SALE OF T HESE SHARES HAVE TO BE TREATED AS SHORT-TERM OR LONG TERM CAPIT AL GAINS DEPENDING ON THE PERIOD OF HOLDING. THE ABOVE FIND ING OF THE CIT (A) IS IN CONFORMITY WITH THE GUIDELINES ISSUED BY THE BOARD VIDE ITS CIRCULAR NO.4 OF 2007 DATED 15.6.2007. LIKEWISE , FOR THE AY 2008-09, THE CIT (A) TOOK A STAND THAT THE INCOME F ROM CAPITAL GAINS, SHORT-TERM OR LONG-TERM CAPITAL BASED ON THE PERIOD OF HOLDING OF SUCH ASSETS CANNOT BE TREATED AS BUSINE SS INCOME. THE REVENUE HAS NOT BROUGHT ANY DOCUMENTARY EVIDENC E OR PROOF TO CONTRADICT THE CONCLUSION ARRIVED AT BY THE CIT (A). PHOTOCOPY OF THE AGREEMENTS ENTERED BY THE ASSESSEE COMPANY W ITH THE PORTFOLIO MANAGER (M/S. KOTAK SECURITIES LTD) HAS B EEN PLACED ON RECORD. ON PERUSAL OF THE SAME, IT IS EVIDENT THAT THE PORTFOLIO MANAGER IS TRADING IN SHARES/SCRIPTS/MUTUAL FUNDS A ND THE ASSESSEE COMPANY DOES HAVE ANY SAY. IN THE INSTANT CASE ASSESSEE COMPANY HAD INVESTED ITS FUNDS WITH THE PO RTFOLIO ITA NOS 1188 & 1189 OF 2012 KAPUR INVESTMENTS PVT L TD BANGALORE PAGE 8 OF 10 MANAGEMENT SCHEME FOR MAXIMIZATION OF WEALTH. THE A SSESSEE COMPANY CANNOT BE SAID TO BE SYSTEMATICALLY DEALING IN SHARE TO TERM THE ACTIVITIES OF THE ASSESSEE AS IN NATURE OF BUSINESS. 6.1 THE LEARNED AR HAS PLACED RELIANCE ON NUMBER OF JUDICIAL VIEWS IN SUPPORT OF THE ASSESSEES CONTENTIONS. TO ILLUSTRATE FURTHER, THE VIEWS OF JUDICIARIES ARE ANALYZED AS U NDER: (I) IN THE CASE OF ITO V. RADHA BIRJU PATEL REPORT ED IN A(2011) 11 TAXMANN.COM 293(MUM), THE HONBLE MUMBAI TRIBUNAL HAS HELD, ON A SIMILAR ISSUE, AS UNDER: IT WAS APPARENT FROM THE RECORD THAT THE SHARE TRANSACTIONS IN QUESTION WERE CARRIED OUT BY THE ASSESSEES PMS MANAGER. THEREFORE, THESE TRANSACTIONS WERE CLEARLY IN THE NATURE OF TRANSACTIONS MEANT FOR MAXIMIZATION OF WEALTH RATHE R ENCASHING THE PROFITS ON APPRECIATION IN VALUE OF SHARES. THE VERY NATURE OF PORTFOLIO MANAGEMENT SCHEME IS SUCH THAT THE INVESTMENT MADE BY AN ASSESSEE IS PROTECTED AND ENHANCED AND IN SUCH A CIRCUMSTANCE, IT CANNOT BE SAID THAT IT IS SCHEME O F TRADING IN SHARES AND STOCK. WHETHER, AN ASSESSEE IS ENGAGED IN THE BUSINESS OF DEALING IN SHARES OR INVESTMENT IN SHARES IS ESSENTIALLY A QUESTION OF F ACT AND IT HAS TO BE DETERMINED WITH REGARD TO THE ENTIRETY OF THE CIRCUMSTANCES. IN CIRCUMSTANCE, IN WHICH THE ASSESSEE WAS ENGAGED IN A SYSTEMATIC ACTIVITIES OF HOLDING PORTFOLIO THROUGH THE PMS MANAGER, IT COULD NOT BY ANY STRETCH OF IMAGINATION , BE SAID THAT THE MAIN OBJECT OF HOLDING THE PORTFOL IO WAS TO MAKE PROFIT BY SALE OF SHARES DURING THE COURSE OF MAINTAINING THE PORTFOLIO INVESTMENT OVER THE PERIOD. THEREFORE, THE COMMISSIONER (APPEALS) WAS JUSTIFIED IN ACCEPTING THE GAIN ON SALE OF SHAR ES AS SHORT-TERM CAPITAL GAIN AS CLAIMED BY THE ASSESSEE. ITA NOS 1188 & 1189 OF 2012 KAPUR INVESTMENTS PVT L TD BANGALORE PAGE 9 OF 10 (II) YET ANOTHER FINDING, THE HONBLE H BENCH O F MUMBAI TRIBUNAL IN THE CASE OF MAHENDRA C SHAH V. A DDL. CIT REPORTED IN (2012) 19 TAXMANN.COM 350 (MUM) HAS HEL D THAT PRIMA FACIE THERE WAS ENOUGH EVIDENCE TO SHOW THAT THE ASSESSEE WAS AN INVESTOR IN SHARES AND, THEREFORE, THE SURPL US ARISING ON THE SALE OF SHARES SHOULD BE ASSESSED AS SHORT-TERM OR LONG-TERM CAPITAL GAINS, DEPENDING ON THE PERIOD OF HOLDING A ND NOT AS BUSINESS INCOME. (III) THE HONBLE GUJARAT HIGH COURT IN THE C IT V. NIRAJ AMIDHAR SURTI REPORTED IN (2012) 20 TAXMANN.COM 579 (GUJ) HAS RULED AS UNDER: THAT IN THE LIGHT OF THE FINDINGS RECORDED BY COMMISSIONER (APPEALS) THAT THE ASSESSEE HAD HELD THE SHARES IN QUESTION FOR FOURTEEN MONTHS WHICH IS ALONG PERIOD FOR THE PURPOSE OF LONG-TERM CAPITAL G AIN, THE INTENTION OF THE ASSESSEE HAD ALWAYS BEEN THAT OF MAKING INVESTMENT IN SHARES AND NOT DEALING IN SHARES, WHICH WAS ALSO APPARENT FROM THE FACT THAT THE SHARES HAD NOT BEEN TREATED AS STOCK IN TRADE B Y THE ASSESSEE; EVEN AFTER THE SALE, THE ASSESSEE HAD MADE INVESTMENT IN BONDS OF NABARD, INDICATING THAT HE HAD TREATED THE SAME AS LONG-TERM CAPITAL GAIN; AS WELL AS THE FACT THAT THE ASSESSEE HAD NOT SPLIT THE SHARES IN LOTS BUT HAD SOLD THE SAME IN O NE LOT; IT WAS NOT POSSIBLE TO AGREE WITH THE CONTENTI ON RAISED ON BEHALF OF THE REVENUE THAT THE TRANSACTIO N IN QUESTION WAS AN ADVENTURE IN THE NATURE OF TRAD E AND, THEREFORE, INCOME DERIVED BY THE ASSESSEE FROM THE SAID TRANSACTION WAS A BUSINESS INCOME AND COULD NOT BE TREATED AS CAPITAL GAINS. 6.2. TAKING INTO ACCOUNT ALL THE FACTS AND CIRCUMSTANCES OF THE ISSUE AS DISCUSSED ABOVE AND ALSO IN CONFORMITY WITH THE RATIOS LAID DOWN BY THE HONBLE HIGH COURT OF GUJAR AT AND ALSO THE HONBLE MUMBAI TRIBUNAL (SUPRA), WE ARE OF THE VIEW THAT THE CIT (A) WAS JUSTIFIED IN COMING TO RIGHT CONCLUSION WHICH DOES ITA NOS 1188 & 1189 OF 2012 KAPUR INVESTMENTS PVT L TD BANGALORE PAGE 10 OF 10 NOT WARRANT ANY INTERFERENCE. IN ESSENCE, THE FIND INGS OF THE CIT (A) FOR BOTH THE ASSESSMENT YEARS UNDER DISPUTE ARE UPHELD. 7. IN THE RESULT, THE REVENUES APPEALS FO R BOTH THE AYS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH NOVEMBER, 2013. SD/- SD/- (JASON P. BOAZ) (GEORGE GEORGE K) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE DATED 29 TH NOVEMBER,, 2013. VNODAN/SPS COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCHES, BANGALORE