A.C.I.T., Circle - 7, Kolkata, Kolkata V. Shri Vivek Mundra, Kolkata

ITA 1409/KOL/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59611 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2012
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 08-07-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 14-08-2009
• Court: TRIBUNAL
• Department Lawyers: AJOY KR SINGH LD
• Assessee Lawyers: S K TULSYAN LD
• Keywords: Business income

Judgement Text

, B , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH- B CALCUTTA () BEFORE , SHRI N. VIJAYA KUMARAN, JUDICIAL MEMBER. /AND .'#., $% SHRI C.D.RAO, ACCOUNTANT MEMBER & / ITA NO. 1409/KOL/2009 '( )*/ ASSESSMENT YEAR: 2006-07 A.C.I.T, CIRCLE-7, KOLKATA SHRI VIVEK MUNDRA PAN:AFQPM 3436D (,- / APPELLANT ) - - - VERSUS -. (/0,-/ RESPONDENT ) ,- 1 2 $/ FOR THE APPELLANT: / SHRI AJOY KR. SINGH, LD.DR /0,- 1 2 $/ FOR THE RESPONDENT: / SHRI S.K. TULSYAN, LD.AR 3 1 #% /DATE OF HEARING : 14-02-2012 4) 1 #% /DATE OF PRONOUNCEMENT: 24 TH .-02-2012 $5 / ORDER , , , , , , ,, , SHRI N. VIJAYA KUMARAN, JUDICIAL MEMBER THIS APPEAL BY THE DEPARTMENT IS FOR THE ASSESSMEN T YEAR 2006-07. IT IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS), VIII, KOLKATA DATED 18-06- 2009. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. THAT THE LD.CIT(A) ERRED ON FACTS AND IN LAW IN HOLDING THAT THE INCOME OF RS.2,64,63,001/- WAS INCOME FROM SHORT TE RM CAPITAL GAINS RATHER THAN BUSINESS INCOME DESPITE THE CLEAR FIN DINGS OF THE A.O THAT THE MAIN MOTIVE OF THE ASSESSEE WAS TO EARN PROFITS BY TRADING IN SHARES RATHER THAN INVESTMENT. 2. THAT THE APPELLANT BEGS THE LIBERTY TO ADD, ALTE R, MODIFY, DELETE, NEW OR FURTHER GROUNDS OF APPEAL ITA NO.1409/KOL/09-B-NVK 2 3. WHILE STATING THE CASE THE LEARNED COUNSEL FOR T HE ASSESSEE WOULD SUBMIT THAT ON IDENTICAL GROUND WHETHER IT IS BUSINESS INCOME OR S HORT TERM CAPITAL GAINS THE HONBLE ITAT KOLKATA, B BENCH IN ITA NOS. 1407 & 1408/KOL/ OF 2009 FOR THE ASSESSMENT YEARS 2005-06 & 2006-07 IN THE CASE OF ADDL.CIT, R-7, KOL VS. M/S . MERLIN HOLDINGS (P) LTD, AS WELL AS THE DECISION OF THE HONBLE ITAT, KOLKATAB BENCH FOR THE ASSESSMENT YEAR 2005-06 IN ITA NO.2157/KOL/2008 IN THE CASE OF JCIT,R-43, KOL VS. ANIRUDDH MUNDRA, KOLKATA DATED 18-10- 2006 & 31-8-2010 RESPECTIVELY, WHEREIN THE HONBLE TRIBUNAL HELD THAT IT IS TO BE TAKEN AS INVESTMENT AND THE INCOME THEREBY SHOULD BE CAPITAL GAIN RATHER THAN BUSINESS INCOME. 4. HOWEVER, THE LEARNED DR VEHEMENTLY RELIED ON THE FINDING OF THE ASSESSING OFFICER. 5. IN REPLY, THE LEARNED COUNSEL FOR THE ASSESSEE R ELIED ON THE SAID ORDERS OF THE HONBLE ITAT IN THE CASE (SUPRA) AND THE DECISION OF THE L EARNED COMMISSIONER OF INCOME-TAX (APPEALS). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD INCLUDING THE TRIBUNAL ORDERS, WHICH WERE R ELIED ON BY THE ASSESSEE BEFORE US. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS GI VEN CATEGORICAL FINDINGS AS UNDER:- .. . IT IS WELL ACCEPTED PRINCIPLE THAT AN INVESTO R CAN HAVE SHARE TRANSACTIONS WITH A MOTIVE OF MAKING INVESTME NT AS WELL AS TRADING IF THEY ARE SEPARATELY SHOWN IN BOOKS OF ACCOUNT. IN F ACT THE SEPARATE TREATMENT OF DELIVERY BASED PURCHASE AND SALE OF SH ARES UNDER THE INVESTMENT PORTFOLIO AND PURCHASE AND SALE UNDER FU TURE AND OPTIONS WITH PROFIT MOTIVE BY APPELLANT FURTHER STRENGTHENS THE INTENTION OF THE APPELLANT THAT THE TRANSACTIONS RELATED TO DELIVERY BASED PURCHASE AND SALE OF SHARES RESULTING IN SHORT TERM CAPITAL GAIN ARE ENTERED INTO WITH THE INTENTION OF INVESTMENT AND MAINTAINING SUCH INVEST MENT IN VOLATILE SHARE MARKET. 6.1 FACTS BEING IDENTICAL AND DIRECTLY COVERED BY THE SAID ORDERS OF THE TRIBUNAL IN THE CASE OF M/S. MERLIN HOLDINGS (P) LTD & ANIRUDDH MUNDRA ( SUPRA). THEREFORE, WE HAVE NO HESITATION IN REJECTING THE GROUNDS OF APPEAL OF THE DEPARTMEN T BY CONFIRMING THE IMPUGNED ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS). WE UP HOLD THE SAME. THE GROUNDS RAISED BY THE DEPARTMENT ARE DISMISSED. ITA NO.1409/KOL/09-B-NVK 3 7. IN THE RESULT, REVENUES APPEAL IS DISMISSED . 6 $5 %$ 7 8 69 THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 24 TH -02-2012 SD/- SD/- ( .'#., $% , ,, , ( C.D.RAO, ACCOUNTANT MEMBER) ( , ) ( N.VIJAYKUMARAN, JUDICIAL MEMBER ) DATED: 24-02-2012 *PP SR.PS/ $5 1 /'' :$)/ COPY OF THE ORDER FORWARDED TO: 1. ,- /APPELLANT- ACIT,CIR-7, P-7 CHOWRINGHEE SQ, 5 TH FL., ROOM NO.18, KOLKATA-700069. 2 /0,- / RESPONDENT : SHRI VIVEK MUNDRA 804, SHUBHAM, 1 SA ROJINI NAIDU SARANI, KOL-17. 3. '5/ CIT, 4. '5 ()/ CIT(A), 5. @'8 /'/ DR, KOLKATA BENCHES, KOLKATA [0 /'/ TRUE COPY] $5/ BY ORDER, 6 /ASSTT REGISTRAR