SONALI A SHAH, MUMBAI V. ITO 12(1)(4), MUMBAI

ITA 1834/MUM/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3525 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 07-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income

Judgement Text

. , IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI , BEFORE SHRI R. K. GUPTA , JM ITA NO. 1834 / MUM/ 20 1 3 ( ASSESSMENT Y EAR : 200 8 - 20 0 9 ) SMT SONALI A SHAH, 22, 3 RD FLOOR, RAJA BAHADUR MANSION, MUMBAI SAMACHAR MARG, FORT, MUMBAI - 400 001 . VS. ITO WD 12 ( 1 )( 4 ), MUMBAI PAN/GIR NO. : A UUPS 6113 J ( APPELLANT ) .. ( RESPONDENT ) /ASSESSEE BY : SHRI DHARAN GANDHI /REVENUE BY : SHRI ARUN KUMAR DATE OF HEARING : 2 3 RD 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 3 - 12 - 2012 OF CIT(A) - 23 , MUMBAI RELA TING TO THE ASSESSMENT YEAR 200 8 - 0 9 . 2 . THE GROUND RAISED BY THE ASSESSEE IN ITS APPEAL IS IN REGARD TO TREATING THE SHORT TERM CAPITAL GAIN OF RS. 3,6 8,512/ - AS BUSINESS INCOME AGAINST THE SHORT TERM CAPITAL GAIN SHO W N BY THE ASSESSEE. 3 . THE CONCISE FACTS OF THE CASE ARE THAT THE AO TREATED THE SHORT TERM CAPITAL GAIN AS BUSINESS INCOME FOR THE REASON THAT THE ASSESSEE HAS DONE TRANSACTIONS IN 44 SCRI PS OF VARIOUS COMPANIES DURING THE YEAR UNDER CONSIDERATION CONSISTING OF 63 TRANSACTIONS INVOLVING 71,276 NUMBER OF SHARES HAVE BEEN MADE. THE AO NOTED THAT PENNY AMOUNT OF DIVIDEND OF RS. 20,275/ - HAS BEEN RECEIVED BY THE ASSESSEE ON ACCOUNT OF PURCHASE OF SHARE AT RS. 88,04,774/ - AGAINST WHICH THE SALE OF RS. 91,72,794/ - HAS ITA NO. 1834 /20 1 3 2 BEEN MADE. THE AO ALSO NOTED THAT MAJORITY OF SHARE PURCHASED DURING THE YEAR HAS BEEN SOLD OUT IN A SHORT PERIOD OF TIME FOR OR SAY IN LESS THAN 200 DAYS. THEREFORE, HE TREATED THE TR ANSACTION AS FREQUENT TRANSACTION. HE ALSO TREATED THE SHORT TERM CAPITAL GAIN AS BUSINESS INCOME OF THE ASSESSEE. FURTHER LONG TERM CAPITAL GAIN SHOWN BY THE ASSESSEE WAS ACCEPTED BY THE AO. 4 . AGGRIEVED THEREBY, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). LEARNED CIT(A) CONFIRMED THE ACTION OF THE AO . 5 . BEING DISSATISFIED WITH THE ORDER OF THE CIT(A), THE ASSESSEE IS NOW IN APPEAL HERE BEFORE THE TRIBUNAL. 6 . AFTER CONSIDERING THE SUBMISSION AND PERUSING THE MATERIAL ON RECORD, I FOUND THAT TH E ASSESSEE DESERVES TO SUCCEED IN HER APPEAL. THE AO HIMSELF HAS ADMITTED THAT THOUGH TRANSACTIONS ARE MORE BUT THEY HAVE TRADED IN LESS THAN 200 DAYS . AS PER THE PROVISION OF LAW, IF THE INVESTMENT ON ACCOUNT OF PURCHASE AND SALE OF SHARES ARE SHOWN UNDER THE HEAD INVESTMENT, THEN ON ACCOUNT OF SALE OF SHARES, EVEN MORE THAN ONE YEAR, THE LONG TERM CAPITAL GAIN IS PAYABLE AND IF THE SALE IS EFFECTED IN LESS THAN ONE YEAR THEN SHORT TERM CAPITAL GAIN IS EFFECTED. THEREFORE, IN MY VIEW, THE AO, WHO HAS ACCEP TED THE LONG TERM CAPITAL GAIN AS THE SALES WERE MADE AFTER ONE YEAR OF PERIOD, HOWEVER, ON THE BASIS OF MANY TRANSACTIONS, THE AO TREATED THE SAME WHICH WERE MADE IN LESS THAN ONE YEAR, TREATED THE SAME AS BUSINESS TRANSACTIONS, WHICH IS NOT CORRECT. ITA NO. 1834 /20 1 3 3 7 . THE HON BLE BOMBAY HIGH COURT IN THE CASE OF GOPAL PUROHIT, REPORTED IN 228 CTR 582 , HAS CONFIRMED THE DECISION OF THE TRIBUNAL ON SIMILAR CIRCUMSTANCES. THEREFORE, I HOLD THAT THE SHORT TERM CAPITAL GAIN SHOWN BY THE ASSESSEE HAS TO BE ACCEPTED AS THE I NVESTMENT HAS BEEN SHOWN UNDER THE INVESTMENT PORTFOLIO. ACCORDINGLY, I DIRECT THE AO TO ACCEPT THE CAPITAL GAIN SHOWN BY THE ASSESSEE INSTEAD OF TREATING THE PROFIT AS PROFIT FROM BUSINESS. 8 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12 TH DAY OF JUNE .2013 201 3 SD/ - ( ) ( R. K.GUPTA ) / JUDICIAL MEMBER MUMBAI; DATED : 12/06 /2013 /PKM , PS COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) , MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// / BY ORDER, ( ASSTT. REGISTRAR) / ITAT, MUMBAI