The ITO, Ward-7(4), Ahmedabad V. Shri Vaibhav Jayantilal Shah, Ahmedabad

ITA 1840/AHD/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0535 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 29-01-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 28-05-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAHUL KUMAR
• Assessee Lawyers: P M MEHTA
• Keywords: Business income; Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, A BENCH, AHMEDABAD BEFORE SHRI D. K. TYAGI, JUDICIAL MEMBER AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER I.T.A. NO.1840 / AHD/2010 (ASSESSMENT YEAR 2007-08) ITO, WARD 7(4), AHMEDABAD VS. SHRI VAIBHAV JAYANTILAL SHAH, 7-B, JEEVAN SMRUTI SOCIETY MIRAMBICA SCHOOL ROAD, NARANPURA, AHMEDABAD PAN/GIR NO. : AFGPS4048R (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI RAHUL KUMAR, SR. DR RESPONDENT BY: SHRI P M MEHTA, AR DATE OF HEARING: 29.01.2013 DATE OF PRONOUNCEMENT: 22.02.2013 O R D E R PER SHRI A. K. GARODIA, AM:- THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDE R OF CIT(A) II, AHMEDABAD DATED 26.03.2010 FOR THE ASSESSMENT YEAR 2007-08. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: THE LD. COMMISSIONER OF INCOME TAX (A)-XI, AHMEDAB AD HAS ERRED IN LAW AND ON FACTS IN DELETING ADDITION MA DE OF RS.12,71,270/- ON ACCOUNT OF STCG AND LTCG TREATED AS BUSINESS INCOME OF THE ASSESSEE. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (A) -XI AHMEDABAD OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LD. CO MMISSIONER OF I.T.A.NO.1840 /AHD/2010 2 INCOME TAX (A) - XI, AHMEDABAD MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 2. LD. D.R. SUPPORTED THE ASSESSMENT ORDER WHEREAS THE LD. A.R. SUPPORTED THE ORDER OF LD. CIT(A). HE ALSO PLACED RELIANCE ON THE TRIBUNAL DECISION RENDERED IN THE CASE OF HIMANSHU J SHAH AND OTHERS IN I.T.A.NO. 2875, 2878, 2879 AND 2880/AHD/2008 AND C. O. NOS. 292, 295, 296 AND 297/AHD/2008 DATED 17.09.2009. AT THIS JUN CTURE, THE BENCH POINTED OUT THAT IN PARA 13 OF THIS TRIBUNAL ORDER, IT IS NOTED BY THE TRIBUNAL THAT SHARES WERE REGISTERED/TRANSFERRED IN THE NAME OF THE ASSESSEE AND, THEREFORE, THE ASSESSEE GETS OUT OF T HE AMBIT OF A TRADER GENERALLY. THE BENCH WANTED TO KNOW AS TO WHETHER IN THE PRESENT CASE, THE SHARES IN QUESTION WERE REGISTERED/TRANSFERRED IN THE NAME OF THE ASSESSEE OR NOT. IN REPLY, NO SUCH EVIDENCE COULD BE PLACED BY THE LD. A.R. BEFORE US AS TO WHETHER THE SHARES WERE TRANSF ERRED/REGISTERED IN THE NAME OF THE ASSESSEE OR NOT. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW AND THE TRIBUNAL JUDGEMENT CITED BY THE LD. A.R. OF THE ASS ESSEE. WE FIND THAT THE DETAILS OF SHARES SOLD DURING THE PRESENT YEAR IN WHICH CAPITAL GAIN HAS BEEN EARNED BY THE ASSESSEE IS APPEARING ON PAGES 2 8-29 OF THE PAPER BOOK. THE AMOUNT OF RS.12,71,275/- HAS BEEN EARNED AS LONG TERM CAPITAL GAIN AND AN AMOUNT OF RS.4,35,028/- HAS BEEN EARNED AS SHORT TERM CAPITAL GAIN BUT FROM ALL THESE DETAILS, THE ASSESS EE HAS GIVEN ONLY THE DATE OF SALE AND HE HAS NOT PROVIDED THE DATE OF PURCHAS E IN ALL THE CASES WHERE ASSESSEE HAS EARNED LONG TERM CAPITAL GAIN (LTCG). REGARDING SHORT TERM CAPITAL GAIN (STCG) ALSO, HE HAS NOT PROVIDED THE D ATE OF PURCHASE IN RESPECT OF SHARES OF M/S. APOLLO SINDH AND INDO ASE AN FUSE GEAR LTD. IN I.T.A.NO.1840 /AHD/2010 3 RESPECT OF MADHAV MARBLES, DATE OF PURCHASE IS 14.1 2.2006 AND THE DATE OF SALE IS 06.02.2007. FOR RELIANCE INDUSTRIES LTD ., DATE OF PURCHASE IS 07.11.2005 AND DATE OF SALE IS 28.02.2006. THE ASS ESSEE HAS NOT PROVIDED THE DETAILS AS TO WHETHER THESE SHARES FROM WHICH T HE ASSESSEE HAS EARNED LTCG AS WELL AS STCG, WERE REGISTERED IN THE NAME O F THE ASSESSEE OR NOT. ALTHOUGH THIS FACTOR IS NOT A DECISIVE FACTOR IN ITSELF BUT IT IS A STRONG FACTOR TO FIND OUT THE INTENTION OF THE ASSESSEE BE CAUSE IF THE ASSESSEE HAS GOT THE SHARES TRANSFERRED/REGISTERED IN HIS NAME, IT MAY BE A STRONG INDICATION THAT THE ASSESSEE WANTED TO HOLD THESE S HARES FOR EARNING DIVIDEND INCOME AND THESE SHARES WERE NOT PURCHASED FOR TRADING PURPOSE. ALTHOUGH EVEN IN THOSE CASES IN SOME GIVEN CIRCUMST ANCES, THE ULTIMATE CONCLUSION MAY BE DIFFERENT. SIMILARLY, EVEN IF T HE SHARES ARE NOT TRANSFERRED/REGISTERED IN THE NAME OF THE ASSESSEE, THERE MAY BE SOME CASES WHERE IT MAY BE FOUND THAT ALTHOUGH THE SHARE S WERE NOT TRANSFERRED/REGISTERED IN THE NAME OF THE ASSESSEE BUT STILL IT WAS A CASE OF INVESTMENT IN SHARES AND NOT A SHARE TRADING BUT IN NORMAL SITUATION, IT WOULD BE OTHERWISE AND MAY BE HELD THAT THESE ARE F OR TRADING PURPOSE. THIS ASPECT WAS NOT AT ALL EXAMINED BY LD. CIT(A) A ND THE FACTS ON THIS ASPECT ARE NOT AVAILABLE BEFORE US ALSO AND HENCE, WE FEEL THAT THIS MATTER SHOULD GO BACK TO THE FILE OF LD. CIT(A) FOR A FRES H DECISION AFTER EXAMINING THIS ASPECT OF THE MATTER AND, THEREFORE, WE SET ASIDE THE ORDER OF LD. CIT(A) ON THIS ISSUE AND RESTORE THE MATTER BACK TO THE FILE OF LD. CIT(A) FORE A FRESH DECISION AFTER EXAMINING THIS A SPECT OF THE MATTER AS TO WHETHER SHARES WERE REGISTERED/TRANSFERRED IN TH E NAME OF THE ASSESSEE OR NOT AND IF THE SHARES WERE NOT REGISTERED / TRAN SFERRED IN THE NAME OF THE ASSESSEE THEN WHAT IS THE EXPLANATION OF THE AS SESSEE FOR NOT DOING SO. THE LD. CIT(A) SHOULD ALSO FIND OUT AS TO WHETHER T HE DELIVERY OF SHARES I.T.A.NO.1840 /AHD/2010 4 WAS PHYSICAL OR IN DMAT ACCOUNT. IF THE DELIVERY W AS IN PHYSICAL FORM, THEN HE SHOULD ALSO FIND OUT WHAT WAS THE DATE OF A GM BECAUSE THE SHARE TRANSFER DEED RECEIVED BY THE ASSESSEE AT THE TIME OF PURCHASE DOES NOT REMAIN VALID AFTER SOME FIXED PERIOD FROM THE DATE OF AGM AND, THEREFORE, THE ASSESSEE HAS TO OBTAIN FRESH TRANSFE R DEED WHICH IS A VERY COMPLICATED PROCESS AND HENCE, WHERE THE ASSESSEE H AS NOT GOT SHARES TRANSFERRED/REGISTERED IN HIS NAME, HE HAS TO EXPLA IN THE REASONS FOR THE SAME AND OTHERWISE, IT WILL BE A STRONG CASE FOR HO LDING THAT THE SHARES WERE PURCHASED FOR TRADING AND NOT FOR INVESTMENT. LD. CIT(A) SHOULD PASS NECESSARY ORDER AS PER LAW IN THE LIGHT OF ABO VE DISCUSSION AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO BOTH SIDES. 4. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS ALLOWED FOR STATISTICAL PURPOSES. 5. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE M ENTIONED HEREINABOVE. SD./- SD./- (D. K. TYAGI) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD I.T.A.NO.1840 /AHD/2010 5 1. DATE OF DICTATION 18/02/213 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 19/02/2013. OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 22/02/2013 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.22/2 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 22/ 02/2013 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. .