ACIT CIR 16(2), MUMBAI V. RAVI BALDEVRAJ CHADHA, MUMBAI

ITA 1673/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75570 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 09-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUM BAI , BEFORE SHRI D. MANMOHAN, VP AND SHRI SANJAY ARORA, AM I.T.A. NO. 1673/MUM/2012 ( / ASSESSMENT YEAR: 2008-09) ASST. CIT-16(2), MATRU MANDIR, TARDEO ROAD, MUMBAI-400 007 VS. RAVI BALDEVRAJ CHADHA 7, SUDHA, 20, NEPEAN SEA ROAD, MUMBAI-400 036 ! ' ./PAN/GIR NO. ACTPC 2390 Q ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) !#&' / APPELLANT BY : SHRI SANJEEV JAIN $%!#&' / RESPONDENT BY : SHRI BIREN GABHAWALA ( )*&+, / DATE OF HEARING : 10.02.2014 -./&+, / DATE OF PRONOUNCEMENT : 19.02.2014 0 O R D E R PER SANJAY ARORA, A. M.: THIS IS AN APPEAL BY THE REVENUE DIRECTED AGAINST T HE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-27, MUMBAI (CIT(A) FOR SH ORT) DATED 12.12.2011, ALLOWING THE ASSESSEES APPEAL CONTESTING ITS ASSESSMENT U/S .143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR (A. Y.) 2008-09 VIDE ORDER DATED 02.12.2010. 2. THE ONLY ISSUE ARISING IN THIS APPEAL BY THE REV ENUE IS THE TREATMENT OF THE SHORT TERM CAPITAL GAIN (STCG) ARISING TO THE ASSESSEE ON THE PURCHASE AND SALE OF SHARES AS STCG, AS AGAINST THE BUSINESS INCOME BY THE ASSESSI NG OFFICER (A.O.). 2 ITA NO. 1673/MUM/2012 (A.Y. 2008-09) ASST. CIT VS. RAVI BALDEVRAJ CHADHA 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. THE FACTS OF THE CASE AS EMANATING FROM THE RECORD ARE THAT THE ASSESSEE, A SUB- BROKER IN SHARES AND SECURITIES, HAS BEEN RETURNING HIS INCOME ON THE PURCHASE AND SALE OF SHARES AS CAPITAL GAINS, BOTH AS LONG-TERM AND SHOR T-TERM, IN THE PAST AS WELL AS FOR THE FUTURE YEARS. FOR THE YEAR UNDER REFERENCE, HE DISC LOSED STCG AT RS.89.92 LACS AND LONG TERM CAPITAL GAIN (LTCG) AT RS.41.52 LACS. WHILE TH E A.O. CONSIDERED THE INCOME ON BOTH THE COUNTS AS BUSINESS INCOME, THE LD. CIT(A) ACCEP TED THE ASSESSEES STAND, SO THAT THE SAME WOULD BE LIABLE TO THE TREATED AS STCG AND LTC G RESPECTIVELY. THE LD. CIT(A), IN SO DECIDING, MADE AN EXTENSIVE EXAMINATION OF THE A SSESSEES CASE, VIZ. THE TREATMENT ACCORDED BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT; V OLUME AND FREQUENCY OF TRANSACTIONS; THE PROPORTION OF OWN CAPITAL EMPLOYED; THE AVERAGE TURNOVER OF FUNDS, ETC. IN FACT, 59% OF STCG AND 97% OF LTCG HAD ARISEN TO THE ASSESSEE FROM FOUR AND THREE SCRIPS RESPECTIVELY, WITH THERE BEING NO REPETITIVE TRANSA CTIONS, IN THE SENSE THAT THE SHARES SOLD ARE NOT PURCHASED AGAIN, AND NEITHER ARE THERE ANY F & O TRANSACTIONS. FURTHER, THE ASSESSEE HAD UNREALIZED CAPITAL GAIN, I.E., WITH RE FERENCE TO THE BOOK VALUE AND THE MARKET VALUE OF THE INVESTMENTS HELD AS AT THE YEAR-END, I .E., 31.03.2008, AT RS.1.12 CRORES, AND WHICH WOULD HAVE BEEN IMMEDIATELY BOOKED AND THE GA IN REALIZED WERE THE ASSESSEE TO BE A TRADER IN SCRIPS. NO IMPROVEMENT WHATSOEVER IN ITS CASE STOOD MADE B Y THE REVENUE BEFORE US. THE BORROWING REFERRED TO BY THE LD. DR, IS AT RS.3 LACS ONLY, AND WHICH IS ONLY MEAGER WHEN RECKONED WITH REFERENCE TO THE INVESTMENT AS A T THE YEAR-END, I.E., RS.2.75 CRORES AND, FURTHER, AS POINTED OUT BY THE LD. AR, IS ONLY IN THE NATURE OF AN ACCOMMODATION FROM THE ASSESSEES WIFE ASSUMED UNDER AN EXIGENCY. THE ASSESSEES PRINCIPAL OCCUPATION OR VOCATION IS THAT OF A SUB-BROKER, EARNING SUBSTANTI AL INCOME BY WAY OF COMMISSION, RETURNED AND ASSESSED AT RS.1.05 CRORES FOR THE CUR RENT YEAR. THE REVENUE HAS IN FACT IMPUGNED ONLY THE STCG AND NOT LTCG, THEREBY ACCEPT ING THE ASSESSEE TO BE AN INVESTOR. IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE, W ITH THERE BEING NO REBUTTAL QUA ANY OF THE FINDINGS BY THE LD. CIT(A) UPON A DETAIL ED FACTUAL EXAMINATION OF THE MATTER, 3 ITA NO. 1673/MUM/2012 (A.Y. 2008-09) ASST. CIT VS. RAVI BALDEVRAJ CHADHA WE FIND NO REASON TO DISTURB THE SAME. WE ACCORDING LY, DECLINE INTERFERENCE. WE DECIDE ACCORDINGLY. 4. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . 1/+2)& 1&+3 ORDER PRONOUNCED IN THE OPEN COURT ON FEBRUARY 19, 2014 SD/- SD/- (D. MANMOHAN) (SANJAY ARORA) / VICE PRESIDENT / ACCOUNTANT MEMBER ( 4* MUMBAI; 5 DATED : 19.02.2014 )6 ROSHANI , SR. PS !' # $%&' (!'% COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. ( 7+ 8 9 / THE CIT(A) 4. ( 7+ / CIT - CONCERNED 5. :);<$6+6=> ,=>/ ( 4* / DR, ITAT, MUMBAI 6.