The ACIT, Circle-6, Surat V. Shri Manish Sumatilal Shah, Surat

ITA 1834/AHD/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94486 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 09-07-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 28-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J P JANGID
• Assessee Lawyers: J P SHAH
• Keywords: Business income
• Section: 2; 143(3)

Judgement Text

ITA NO . 1834 /AHD/ 20 1 0 ASSESSMENT YEAR S : 2 0 0 7 - 08 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND RAJP A L YADAV JM] ITA NO. 1834 / AHD / 2 0 1 0 ASSESSMENT YEAR: 20 0 7 - 08 ASSTT. COMMISSIONER OF INCOME TAX ....... .. . ..... APPELLANT CIRCLE - 6, SURAT. VS. MANISH SUMATILAL SHAH .... .................. .... .. RESPONDENT VARDHAMAN APARTMENT, 6/1940 - 42, DALAGAIS MOHLLO, MAHIDHARPURA, SURAT. [PAN ADRPS 1088 E] APPEARANCES BY: J.P. JANGID FOR THE A PPELLANT J.P. SHAH FOR THE RE SPONDENT DATE OF CONCLUDING THE HEARING : JU LY 9 TH , 201 5 DATE OF PRONOUNCING THE ORDER : SEPTEMBER 29 TH , 2015 O R D E R PER PRAMOD KUMAR AM: 1. BY WAY OF THIS APPEAL, THE ASSESSING OFFICER HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 1 6 TH FEBRUARY , 20 10 PASSED BY THE LD . CIT(A) I N THE MAT T ER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 ( THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR 200 7 - 08, ON THE FOLLOWING GROUND : - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) - IV, SURAT HAS E RRED IN DELETING THE ADDITION OF RS.80,10,255/ - TREATING THE SAME AS SHORT TERM CAPITAL GAIN INSTEAD OF BUSINESS INCOME AS TREATED B Y THE AO . ITA NO . 1834 /AHD/ 20 1 0 ASSESSMENT YEAR S : 2 0 0 7 - 08 PAGE 2 OF 3 2. LEARNED REPRESENTATIVES FAIRLY A GREE , EVEN AS LEARNED DEPARTMENTAL REPRESENTATIVE RELIES UPON THE S T AND OF TH E ASSESSING OFFICER NONETHELESS, THAT THE ISSUE IN APPEAL IS NOW COVERED, IN FAVOUR OF THE ASSESSEE, BY A CO - ORDINATE BENCH S DECISION IN ASSESSEE S OWN C ASE FOR THE IMMEDIATELY PRECEDING ASSESSMENT YEAR. VIDE THIS DECISION DATED 21 ST OCTOBER, 2011, THE T RIBUNAL HAS, IN T ER ALIA, OBSERVED AS FOLLOWS : - 6. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PARTIES AND RECORDS PERUSED. THE ADMITTED FACTS OF THE CASE ARE THAT THE ASSESSEE IS A DIRECTOR OF THE COMPANY AND INVOLVED IN THE BUSINESS OF THE COMPANY FOR WHICH THE ASSESSEE DERIVES ANNUAL SALARY OF RS.60 LAKHS. THE CIT(A), AFTER DETAILED DISCUSSION ON EACH AND EVERY ASPECTS, FOUND THAT THE ACTIVITY OF INVESTMENT IN CAPITAL MARKET BY THE ASSESSEE IS NEITHER ALLIED NOR INCIDENTAL TO THE USUAL TRADE OF THE AS SESSEE OF EXPORT OF DIAMONDS. THE ASSESSEE DOES NOT HAVE ANY INFRASTRUCTURE IN THE FORM OF OFFICE, EMPLOYEES, COMPUTER SYSTEMS, BOLT, ONLINE TRADING ACTIVITIES, ETC. SO AS TO CARRY ON THE BUSINESS OF TRADING IN SHARES AND INVESTMENT. THE CIT(A) HAS ALSO EX AMINED THE ISSUE FROM THE ANGLE OF HOLDING OF THE SHARES AND NOTED THAT AVERAGE PERIOD OF PURCHASE AND SALE OF SHARES IN CASE OF THE ASSESSEE IS 134 DAYS WHEREAS THE AVERAGE PERIOD OF HOLDING OF SHARES AS AT THE YEAR END IS 220 DAYS, WHICH CLEARLY LEAD TO AN INFERENCE THAT THE ASSESSEE IS AN INVESTOR. THE CIT(A) HAS ALSO NOTED THAT THE ASSESSEE, AT THE YEAR END, IN HIS BALANCE - SHEET, SHARE INVESTMENT HAS BEEN SHOWN AS INVESTMENT AND NOT AS STOCK - IN - TRADE. THE CIT(A) ALSO EXAMINED THE ISSUE IN THE LIGHT OF P ARAMETERS LAID DOWN BY THE CBDT IN ITS CIRCULAR NO.4/2007 DATED 15.06.2007 AND FOUND THAT THE PURCHASE AND SALE OF SHARES IS NOT USUAL TRADE OR BUSINESS OF THE ASSESSEE NOR IT IS INCIDENTAL TO BUSINESS OF EXPORT OF DIAMONDS. THE CIT(A) ALSO CONSIDERED THE DECISION DATED 30.11.2007 OF THE ITAT, MUMBAI J BENCH IN THE CASE OF M/S. J.M. SHARE & STOCK BROKERS LTD. VS - JCIT. THE LD. CIT(A), AT PAGE 4 OF HIS ORDER, CONSIDERED THE ASSESSEE S SUBMISSIONS IN RESPECT OF THE HOLDING OF THE SHARES BY THE ASSESSEE. TH E CIT(A) HAS ALSO CONSIDERED THE ASSESSEE S SUBMISSION THAT THE ASSESSEE HAS CONSEQUENTLY FOLLOWING THE SAME TREATMENT OF TREATING PROFIT ON SALE OF SHARES AS SHORT TERM CAPITAL GAINS. THE CIT(A) HAS ALSO CONSIDERED THE ASSESSEE S SUBMISSION WHICH HE HAS S UMMARIZED AT PAGE 7, OBJECT AND MOTIVE OF THE ASSESSEE IN DEALING IN SHARES, MAINTENANCE OF BOOKS OF ACCOUNTS, FUND INVESTMENT IN PURCHASE OF SHARES AND INFRASTRUCTURES, ETC. IN THE LIGHT OF THE ITAT ORDER DATED 28.01.2011 IN CASE OF SHRI RAVINDRA M. AGRAW AL IN ITA NOS.1725 TO 2167 OF 2008, A COPY OF WHICH HAS BEEN PLACED BY THE ASSESSEE IN THE PAPER BOOK, WE FIND THAT THE ORDER OF THE CIT(A) IS IN CONSONANCE WITH THE ORDER OF THE ITAT IN CASE OF SHRI RAVINDRA M. AGRAWAL (SUPRA). THEREFORE, WE FIND THAT THE CIT(A) HAS RIGHTLY HELD THAT THE INCOME OF THE ASSESSEE ON SALE OF LISTED EQUITY SHARES IS TAXABLE UNDER THE ITA NO. 1934 - AHD - 09 5 HEAD SHORT TERM CAPITAL GAIN AND DOES NOT AMOUNT TO BUSINESS. THE REVENUE DID NOT POINT OUT ANY CONTRARY MATERIALS OR EVID ENCE AGAINST THE FINDING OF THE CIT(A). IN THE LIGHT OF THE FACT, THE ORDER OF THE CIT(A) IS CONFIRMED. ITA NO . 1834 /AHD/ 20 1 0 ASSESSMENT YEAR S : 2 0 0 7 - 08 PAGE 3 OF 3 3 . WE SEE NO REASONS TO TAKE ANY O THER VIEW OF THE MAT T ER THAN THE VIEW SO TAKEN BY THE CO - ORDINATE BENCH. 4. RESPECTFULLY FOLLOWING THE TRIBUNAL S DE CISION DATED 21 ST O CTOBER, 2011, IN ASSESSEE S OWN CA S E FOR THE IMMEDIATELY PRECEDING ASSESSMENT YEAR, WE APPROVE THE ORDER OF THE LD . CIT(A) A ND DECLINE TO INTERFERE IN THE MATTER. 5. IN THE RESULT, THE APPEAL IS DISMISSED. P RONOUNCED IN THE OPEN COURT O N THIS 29 TH DAY OF SEPTEMBER, 2015. SD/ - SD/ - RAJPAL YADAV PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD , THE 29 TH DAY OF SEPTEMBER , 201 5 PBN/* COPIES TO: ( 1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD