ITO 13(3)(4), MUMBAI V. RAJESH S. SANGHVI, MUMBAI

ITA 1859/MUM/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100889 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 19-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE S/SHRI B.R.BASKARAN ,AM AND AMARJIT SINGH , JM ./ I.T.A. NO . 1859 / MUM/20 1 4 ( / ASSESSMENT YEA R : 200 9 - 10 ) INCOME TAX OFFI CER 13(3)(4), ROOM NO.429, 4 TH FLOOR, AAYAKAR BHAVAN, MUMBAI - 400020 / VS. SHRI RAJESH S SANGHVI, 26, LATIF HOUSE, S T ROAD, MASJIT BUNDAR, MUMBAI - 400009 ( / APPELLANT ) .. ( / RESPONDENT ) ./ ./PAN. : A ADPS3889C / APPELLANT BY SHRI S K MISHRA / RSPONDENT BY SHRI DEEPAK KANABAR / DATE OF HEARING : 0 8 .9 . 201 5 / DATE OF PRONOUNCEMENT: 0 8 . 9. 201 5 / O R D E R P ER B .R.BASKARAN : THE REVENUE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 2.12.2013 PASSED BY THE LD. CIT(A) - 24 , MUMBAI AND IT RELATES TO THE ASSESSMENT YEAR 200 9 - 10. 2. THE REVENUE IS AGGRIEVED BY THE DECISION OF LD. CIT( A) IN HOLDING THE GAIN ARISING ON PURCHASE AND SALE OF SHARES IS ASSESSABLE AS CAPITAL GAIN IN THE HANDS OF THE ASSESSEE . 3. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD. DURING THE YEAR UNDER CONSIDERATION , THE ASSESSEE DECLARED SHORT TERM C APITAL LOSS OF RS.2,83,727/ - AND LONG TERM CAPITAL GAIN (LTCG) OF RS. 12,14,895/ - . ITA NO. 1859 / MUM/20 1 4 2 THE AO TREATED BOTH THE ITEMS AS BUSINESS INCOME OF THE ASSESSEE. THE LD. CIT(A), HOWEVER, REVERSED THE ORDER OF THE AO BY FOLLOWING THE DECISION RENDERED BY THE TRIBU NAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2006 - 07. AGGRIEVED, THE REVENUE HAS FILED THIS APPEAL BEFORE US. 4. THE QUESTION WHETHER THE ASSESSEE IS DEALING IN SHARES AS A TRADER OR AS AN INVESTOR DEPENDS UPON VARIOUS FACTORS. THE CBDT AS WELL AS HONBLE HIGH COURTS HAVE PRESCRIBED VARIOUS CRITERIA , ON THE BASIS OF WHICH THE ACTIVITIES OF AN ASSESSEE CAN BE EXAMINED IN ORDER TO RESOLVE THE SAID QUESTION. IN THE INSTANT CASE, THE AO HAS TREATED THE ASSESSEE AS A TRADER IN THE ASSESSMENT YE A RS 20 06 - 07 AND 2007 - 08 AND THE TRIBUNAL IN BOTH THE YEARS HAVE HELD THAT THE ASSESSEE IS THE INVESTOR AND ACCORDINGLY, HELD THAT THE GAIN ARISING ON SALE OF SHARES IS ASSESSABLE AS CAPITAL GAINS. 5. IN THE INSTANT YEAR, WE NOTICE THAT THE ASSESSEE HAS HELD THE SHARES FOR AN AVERAGE PERIOD OF 125 DAYS. DURING THE YEAR, THE ASSESSEE HAS PURCHASED 18 SCRIPTS AND SOLD 25 SCRIPTS. THE ASSESSEE HAS FILED HIS BALANCESHEET AND PERUSAL OF T HE SAME WOULD SHOW THAT THE ASSESSEE IS HAVING HIS OWN FUNDS EXCEEDING THE A MOUNT OF INVESTMENT. BESIDES ABOVE, THE ASSESSEE HAS ALSO AVAILED INTEREST FREE LOAN FROM HIS RELATIVES. MEANING THEREBY, THE ASSESSEE HAS NOT AVAILED INTEREST BEARING LOANS FOR THE PURPOSES OF MAKING INVESTMENTS. THE NUMBER OF TRANSACTIONS CARRIED ON BY THE ASSESSEE WAS ALSO LOW WHEN COMPARED WITH THE NUMBER OF TRANSACTIONS CARRIED ON BY THE ASSESSEE IN THE EARLIER YEARS. ALL THESE FACTORS WOULD SHOW THAT THE INTENTION OF THE ASSESSEE IN PURCHASING AND SELLING THE SHARES WAS TO ACT AS AN INVESTOR ONLY. ACCORDINGLY, WE ARE OF THE VIEW THAT THERE IS NO INFIRMITY IN THE ORDER OF THE LD . CIT(A). ITA NO. 1859 / MUM/20 1 4 3 6 . IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. PRONOUNCED ACCORDINGLY ON 8 TH SEPT, 2015. 8TH SEPT , 2015 SD SD ( AMARJIT SINGH ) ( B.R. BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 8 TH SEPT , 2015 . . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - CONCERNED 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI CONCERNED 6. / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR ) , /ITAT, MUMBAI