ASST CIT 13(2), MUMBAI V. ANAND GUPTA ( HUF), MUMBAI

ITA 1723/MUM/2011

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2859 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 22-06-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 02-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI I BENCH, MUMBAI BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER. ITA. NO. 1723/MUM/2011 (ASSESSMENT YEAR:2007-08) ASSTT. COMMISSIONER OF INCOME TAX-13(2), ROOM NO.421, 4 TH FLOOR, AAYAKAR BHAVAN, MUMBAI 400 020 APPELLANT VS. SHRI ANAND GUPTA (HUF) 32/38F, IROM MARKET, AHMEDABAD STREET, MUMBAI 400 009 RESPONDENT PAN: AAEHA0857R /BY APPELLANT : SHRI JAVED AKHTAR, D.R. /BY RESPONDENT : SHRI HITEN CHANDE, A.R. /DATE OF HEARING : 16.06.2016 /DATE OF PRONOUNCEMENT : 22.06.2016 ORDER ITA NO.1723/MUM/11 A.Y. 07-08 [ACIT VS. SHRI ANAND GUPTA (HUF)] PAGE 2 PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY REVENUE AGAINST THE O RDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-24, MUMBAI, DA TED 29.12.2010 FOR A.Y. 2007-08 ON FOLLOWING GROUNDS: (1) (I) ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE AO TO TRE AT THE INCOME TO THE TUNE OF RS. 29,03,791/- ON SALE OF SHARES HELD FOR MORE THAN 60 DAYS AS SHORT TERM CAPITAL GAINS AND RS. 4,34,371/- ON SALE OF SHARES HELD FOR LESS THAN 60 DAYS AS BUSINESS INCOME AS AGAINST THE ENTIRE INCOME OF RS. 33,38,162/- EARNED BY THE ASSESSEE ON SALE OF SHARES TREATED BY THE AO AS BUSINESS INCOME. (II) WHILE DOING SO, THE LD. CIT(A) FAILED TO APPRE CIATE THAT NATURE OF RECEIPT WHETHER CAPITAL GAIN OR BUSI NESS HAS TO BE CONSIDERED HAVING REGARD TO TOTAL ACTIVIT Y AND INTENTION OF THE ASSESSEE. THIS HAS BEEN MADE AMPLY CLEAR BY THE HON'BLE ITAT, F-BENCH, MUMBAI IN ITS DECISION IN THE CASE OF V. NAGESH IN 1TA NO. 5410/MUM/2008 DATED 24.09.2009. (III) THE LD. CIT(A) HAS FURTHER FAILED TO APPRECIA TE THAT VOLUME OF TRANSACTIONS, FREQUENCY OF TRANSACTI ONS AND CONTINUITY AND REGULARITY OF TRANSACTIONS AS AL SO LACK OF COMPELLING CIRCUMSTANCES FOR IMMEDIATE SALE S, MADE TO AMPLY CLEAR THAT THE MOTIVE BEHIND THE TRANSACTIONS WAS TO EARN QUICK PROFITS AND THUS THE SAME CONSTITUTED THE TRANSACTIONS IN THE NATURE OF TRADE. (3) THE APPELLANT PRAYS THAT THE ORDER OF CIT(A) ON THE ABOVE GROUND(S) BE SET ASIDE AND THAT OF THE ASSESSMENT OFFICER BE RESTORED. 2. BEFORE US, AT THE OUTSET, LD. AUTHORIZED REPRESENTA TIVE SUBMITTED THAT THE PRESENT APPEAL OF THE REVENUE NE EDS TO BE ITA NO.1723/MUM/11 A.Y. 07-08 [ACIT VS. SHRI ANAND GUPTA (HUF)] PAGE 3 DISMISSED ON ACCOUNT OF LOW TAX EFFECT IN VIEW OF T HE CBDT CIRCULAR NO.21 OF 2015 DATED 10.12.2015. THE LD. D EPARTMENTAL REPRESENTATIVE FAIRLY ADMITTED THAT THE TAX EFFECT IS LESS THAN THE LIMIT PRESCRIBED BY THE AFORESAID CBDT CIRCULAR. 2.1 WE HAVE HEARD THE LD. D.R. AND PERUSED THE MATE RIAL ON RECORD. ON PERUSING THE GROUNDS OF APPEAL RAISED BY THE REVENUE, WE PRIMA-FACIE FIND THAT THE TAX EFFECT IN THIS APPEAL IS BELOW RS.10 LACS. AS PER THE ANNOUNCEMENT OF CE NTRAL BOARD OF DIRECT TAXES (CBDT) DATED 10.12.2015 (CIRC ULAR NO. 21 OF 2015), NO DEPARTMENT APPEALS ARE TO BE FILED AGAINST RELIEF GIVEN BY LD. CIT(A) BEFORE THE INCOME TAX TR IBUNAL UNLESS THE TAX EFFECT, EXCLUDING INTEREST EXCEEDS RS. 10 L ACS AND IT FURTHER STATES THAT THE INSTRUCTIONS WILL APPLY RET ROSPECTIVELY TO THE PENDING APPEALS. IN THE PRESENT CASE, SINCE IT IS AN UNDISPUTED FACT THAT ON THE ADDITIONS WHICH ARE IN DISPUTE, THE TAX EFFECT IS LESS THAN RS. 10 LACS AND IN THE ABSE NCE OF ANY MATERIAL ON RECORD BY THE REVENUE TO DEMONSTRATE TH AT THE ISSUE IN THE PRESENT APPEAL IS COVERED BY EXEMPTION S SPECIFIED IN CLAUSE (8) OF THE AFORESAID CBDT CIRCULAR, WE AR E OF THE VIEW THAT THE MONETARY LIMIT PRESCRIBED BY THE INSTRUCTI ONS OF THE AFORESAID CBDT CIRCULAR WOULD BE APPLICABLE TO THE PRESENT APPEAL OF THE DEPARTMENT AND THEREFORE THE PRESENT APPEAL IS NOT MAINTAINABLE ON ACCOUNT OF LOW TAX EFFECT. HOWE VER, IN CASE THERE IS ANY ERROR IN THE COMPUTATION OF THE TAX EF FECT INVOLVED OR IF FOR ANY REASON, THE AFORESAID CBDT CIRCULAR I S NOT APPLICABLE, IT WOULD BE OPEN TO THE REVENUE TO SEEK REVIVAL OF ITA NO.1723/MUM/11 A.Y. 07-08 [ACIT VS. SHRI ANAND GUPTA (HUF)] PAGE 4 THE APPEAL. IN SUCH CIRCUMSTANCES, WE DISMISS THE APPEALS OF REVENUE WITHOUT EXPRESSING ANY OPINION ON MERITS OF THE CASE. 3. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. PRONOUNCED IN THE OPEN COURT ON THIS THE 22 ND DAY OF JUNE, 2016. SD/- SD/- ( RAJESH KUMAR ) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBE R MUMBAI: DATED 22/06/2016 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE 3. %&%'( ) / CONCERNED CIT 4. )- / CIT (A) 5.-./00'(, '( , %& / DR, ITAT, MUMBAI 6./4567 / GUARD FILE. BY ORDER / , / % , '( , %&