CHANCHAL DEEPAK HEMDEV, MUMBAI V. ITO 19(2)(1), MUMBAI

ITA 1745/MUM/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3516 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 05-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DEEPAK HEMDEV
• Keywords: Business income

Judgement Text

. , IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI , BEFORE SHRI R. K. GUPTA , JM ITA NO. 1 7 4 5 / MUM/ 20 1 3 ( ASSESSMENT YEAR : 200 6 - 20 0 7 ) SMT. CHANCHAL DEEPAK HEMDEV, SHOP NO.5, MARBLE ARCH, CENTRAL AVENUE, SANTACRUZ (W), MUMBAI - 54 VS. ITO 19( 2 ) (1) , MUMBAI PAN/GIR NO. : A A UPH 7073 A ( APPELLANT ) .. ( RESPONDENT ) /ASSESSEE BY : SHRI DEEPAK HEMDEV /REVENUE BY : SHRI ARUN KUMAR DATE OF HEARING : 2 1 ST MAY , 201 3 DATE OF PRONOUNCEMENT : 12 TH JUNE , 2013 O R D E R TH IS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORDER DATED 2 - 1 - 2013 OF CIT(A) - 35 , MUMBAI RELA TING TO THE ASSESSMENT YEAR 200 6 - 0 7 . 2 . THE ASSESSEE IS OBJECTING IN NOT ACCEPTING THE LONG TERM CAPITAL GAIN AND SHORT TERM CAPITAL GAIN SHOWN BY THE ASS ESSEE ON ACCOUNT OF SALE AS THE AO HAS TREATED THE SAME AS BUSINESS PROFIT. 3 . THE ASSESSEE SHOWN SHORT TERM CAPITAL GAIN OF RS. 4,43,030/ - AND LONG TERM CAPITAL GAIN OF RS. 94,894/ - ON ACCOUNT OF SALE OF SHARES. THE AO NOTED THAT THE ONLY DIVIDEND INCOME HAS BEEN SHOWN AT RS. 10,057/ - . THE AO ALSO NOTED THAT THOUGH IN EARLIER YEAR, THE CAPITAL GAIN SHOWN BY ITA NO. 1 7 45 /20 1 3 2 THE ASSESSEE HAS BEEN ACCEPTED BUT PRINCIPLE OF RES JUDICATA DOES NOT OPERATE IN THE PARTICULAR CASE AS THE ASSESSEE WAS ENGAGED IN TRADING IN SHARES. THEREFORE, THE PROFIT ON ACCOUNT OF SHORT TERM CAPITAL AND LONG TERM CAPITAL GAIN WAS TREATED AS BUSINESS INCOME INSTEAD OF TAKING THE SAME AS CAPITAL GAIN. 4 . LEARNED CIT(A) HAS CONFIRMED THE ACTION OF THE AO. 5 . AFTER HEARING THE RIVAL SUBMISSIONS AND CONSIDERING THE MATERIAL ON RECORD, I FOUND THAT THE ASSESSEE IS A HOUSEWIFE AND HAS NO BUSINESS OTHER THAN INVESTING THE FUNDS IN GOVERNMENT SECURITIES, MUTUAL FUNDS AND SHARES. WHATEVER THE PROFIT HAS BEEN ARISEN ON ACCOUNT OF SALE OF SHARES , THAT HA S BEEN SHOWN AS LONG TERM CAPITAL OR SHORT TERM CAPITAL GAIN AS THE CASE MAY BE. THE ASSESSEE HAS SHOWN LONG TERM CAPITAL GAIN OF RS. 94,894/ - . FROM THIS FACT, IT IS CLEARLY SEEN THAT THE ASSESSEE IS INVESTING IN SHARES FOR LONG PERIOD ALSO. UNDER THE PROVI SION OF LAW, IT IS PROVIDED THAT IF THE SHAREHOLDINGS ARE MORE THAN ONE YEAR THEN THE PROFIT ON ACCOUNT OF SALE OF SHARES WILL BE TREATED AS LONG TERM CAPITAL GAIN AND IF THE SHAREHOLDING IS LESS THAN 12 MONTHS THEN THE PROFIT ON ACCOUNT OF SALE OF SHARES SHALL BE TREATED AS SHORT TERM CAPITAL GAIN, IF THE SHARES ARE KEPT UNDER THE HEAD INVESTMENT PORTFOLIO. IN EARLIER YEAR ALSO, THE ASSESSEE HAS SHOWN THE PROFIT ON ACCOUNT OF SALE OF SHARES AS UNDER THE HEAD CAPITAL GAIN AND THE SAME HAS BEEN ACCEPTED ALSO THEREFORE, I AM OF THE VIEW THAT THE AO WAS NOT JUSTIFIED IN TREATING THE SALE OF SHARES AS REGULAR SHARE TRADING AND TREATING THE PROFIT AS BUSINESS INCOME. ITA NO. 1 7 45 /20 1 3 3 6 . THE DECISION OF THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. GOPAL PUROHIT, REPORTED IN 228 CTR 582 , IS SQUARELY APPLICABLE ON THE FACTS OF THE PRESENT CASE, WHEREBY THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL HAS BEEN CONFIRMED ON SAME FACTS. THEREFORE, FOLLOWING THE DECISION OF THE HON BLE BOMBAY HIGH COURT IN THE CASE OF GOPAL PUROHIT (SUPRA) AND TAKING INTO CONSIDERATION THE FACTS OF THE CASE DISCUSSED ABOVE, I HOLD THAT THE CAPITAL GAIN ON ACCOUNT OF PURCHASE AND SALE OF SHARES HAS TO BE ASSESSED UNDER THE HEAD LONG TERM CAPITAL GAIN AND SHORT TERM CAPITAL GAIN, RESPECTI VELY AS SHOWN BY THE ASSESSEE. ACCORDINGLY, I ALLOW THE GROUNDS OF THE ASSESSEE. 7 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12 TH D AY OF JUNE .2013 201 3 ( ) ( R.K.GUPTA ) / JUDICIAL MEMBER MUMBAI; DATED : 12/06 /2013 /PKM , PS COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPOND ENT. 3. / THE CIT(A) , MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// / BY ORDER, ( ASSTT. REGISTRAR) / ITAT, MUMBAI