ACIT, New Delhi V. M/s. VIC Enterprises Pvt. Ltd., New Delhi

ITA 1892/DEL/2017

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 2469 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2010-2011
• Appeal Filed On: 30-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P RAKASH DUBEY SENIOR
• Keywords: Business income; Set aside
• Section: 73

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G : NEW DELHI) BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER (THROUGH VIDEO CONFERENCE) ITA NO.1892/DEL./2017 (ASSESSMENT YEAR : 2010-11) ACIT, CIRCLE 26 (1), VS. M/S. VIC ENTERPRISES P. LT D., NEW DELHI. 4 TH FLOOR, PUNJABI BHAWAN, 10, ROUSE AVENUE, NEW DELHI. (PAN : AAACV0132B) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI M.P. RASTOGI, ADVOCATE REVENUE BY : SHRI PRAKASH DUBEY, SENIOR DR DATE OF HEARING : 04.02.2021 DATE OF ORDER : 17.02.2021 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : APPELLANT, ACIT, CIRCLE 26 (1), NEW DELHI (HEREINAF TER REFERRED TO AS THE REVENUE) BY FILING THE PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 19.01.2017 PASSE D BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-33, NEW DELHI QUA THE ASSESSMENT YEAR 2010-11 ON THE GROUNDS INTER ALIA T HAT :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND LAW, THE LD. CIT (A) HAS ERRED IN DELETING THE ADDI TION OF ITA NO.1892/DEL./2017 2 RS.4,24,77,684/- ON ACCOUNT OF LONG TERM CAPITAL GA INS TREATING AS BUSINESS INCOME. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND LAW, THE LD. CIT (A) HAS ERRED IN DELETING THE ADDI TION OF RS.41,20,064/- ON ACCOUNT OF SHORT TERM CAPITAL GAI NS TREATING AS BUSINESS INCOME. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : ASSESSEE COMPANY IS INTO THE BUSINESS OF TRADING IN SHARES, SECURITIES AND DEBENTURES ETC., DECLARED INCOME FROM LONG TERM CAPITAL GAIN (LTCG) TO THE TUNE OF RS.59,06,169/-. ASSESSING OFFICER (AO), DECLINING THE CONTENTIONS RAISED BY THE ASSESSEE, MADE ADDITION OF RS.4,24,77 ,684/- ON ACCOUNT OF LTCG. AO ALSO MADE ADDITION OF RS.41,20 ,064/- ON ACCOUNT OF SHORT TERM CAPITAL GAIN (STCG) BY TREATI NG THE SAME AS BUSINESS INCOME. 3, ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT ( A) BY WAY OF FILING THE APPEAL WHO HAS DELETED THE AFORESAID ADD ITIONS BY PARTLY ALLOWING THE APPEAL. FEELING AGGRIEVED BY THE ORDE R PASSED BY THE LD. CIT (A), THE REVENUE HAS COME UP BEFORE THE TRI BUNAL BY WAY OF FILING THE PRESENT APPEAL. 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. ITA NO.1892/DEL./2017 3 GROUNDS NO.1 & 2 5. LD. DR FOR THE REVENUE CHALLENGING THE IMPUGNED ORDER PASSED BY THE LD. CIT (A) RELIED UPON THE ORDER PAS SED BY THE AO AND CONTENDED THAT ADDITIONS MADE BY THE AO ON ACCO UNT OF LTCG AND STCG BY TREATING THE SAME AS BUSINESS INCOME IS NOT LIABLE TO BE UPSET BY THE LD. CIT (A). HOWEVER, ON THE OTHER HAND, LD. AR FOR THE ASSESSEE TO REPEL THE ARGUMENTS ADDRESSED B Y THE LD. DR FOR THE REVENUE CONTENDED THAT INTENTION OF THE ASSESSE E IN PURCHASE OF SHARES WAS NEVER FOR REALIZING PROFITS BUT FOR RETE NTION AND APPRECIATION OF ITS VALUE AND FURTHER CONTENDED THA T THIS ISSUE HAS ALREADY BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY T HE COORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR AYS 2006-07 & 2008-09 VIDE ORDER DATED 22.12.2015. 6. PERUSAL OF THE IMPUGNED ORDER PASSED BY THE LD. CIT (A) GOES TO SHOW THAT IN PARA 5.5, LD. CIT (A) EXAMINED EVERY MINUTE DETAIL OF LTCG AS WELL AS STCG ON SALE OF SHARES QU A EVERY TRANSACTION ENTERED INTO BY THE ASSESSEE COMPANY DU RING THE YEAR UNDER ASSESSMENT AND REACHED THE CONCLUSION THAT 73 .5% OF THE SHARES SOLD DURING THE YEAR WERE HELD BY THE ASSESS EE FOR MORE THAN ONE YEAR AND 26% SHARES WERE HELD FOR MORE THAN 3&1 /2 YEARS AND ONLY 4.2% SHARES SOLD DURING THE YEAR WERE RETAINED FOR LESS THAN 60 DAYS. ITA NO.1892/DEL./2017 4 7. ISSUE AT HAND HAS BEEN DULY EXAMINED BY THE COOR DINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR AYS 2006-07 & 2008-09 (SUPRA) AND DECIDED THE ISSUE IN FAVOUR OF THE ASS ESSEE. THE TRIBUNAL FURTHER DECIDED THE ASSESSEES APPEAL FOR AY 2011-12 IN ITA NO.1893/DEL/2017 VIDE ORDER DATED 07.02.2020 IN ITS FAVOUR, BY FOLLOWING THE ORDER OF THE COORDINATE BE NCH OF THE TRIBUNAL IN AYS 2006-07 & 2008-09 (SUPRA). LD. DR FOR THE REVENUE HAS FAILED TO POINT OUT IF FACTS OF THE YEA R UNDER CONSIDERATION ARE DISTINGUISHABLE FROM THE ASSESSME NT YEARS 2006-07 AND 2008-09 DECIDED BY THE TRIBUNAL IN FAVO UR OF THE ASSESSEE. 8. HONBLE DELHI HIGH COURT IN CASE OF CIT VS. ASHO K VADIA WHILE DEALING WITH IDENTICAL ISSUE HELD AS UNDER :- 7. SUFFICE IT TO SAY THAT THERE IS NO SINGLE, UNIVERSAL STANDARD TO DISTINGUISH BETWEEN THE TWO. THE COURT MUST INSTEAD LOOK INTO THE NATURE OF THE SHARES, THE VOLUME AND FREQUENCY OF THE TRANSACTIONS, THE MANNER IN WHICH THE SHARES HA VE BEEN SHOWN BY THE ASSESSEE IN ITS OWN BOOKS OF ACCOUNT, DIVIDEND EARNED ON THE SHARES, IF ANY. RARELY WILL ANY ONE F ACTOR BE CONCLUSIVE; THE PURPOSE OF THE EXERCISE IS TO ASCER TAIN THE TRUE INTENTION THROUGH A COMPOSITE TEST. IN SOME CASES, VOLUME BECOMES DETERMINATIVE; IN OTHERS THE DURATION OF TI ME IT IS HELD; AT TIMES IT CAN BE THE MANNER IT IS SHOWN IN THE BO OKS WHEREAS IN STILL, THE USE OF BORROWED FUNDS COULD BE DECISIVE. 9. SO, KEEPING IN VIEW THE FACTUAL ASPECT OF THE CA SE THAT ONLY FRACTION OF 4.2% SHARES OUT OF THE TOTAL STOCK WITH THE ASSESSEE COMPANY, HAVE BEEN SOLD DURING THE YEAR BY RETAININ G THE SAME FOR ITA NO.1892/DEL./2017 5 LESS THAN 60 DAYS AND 73.5% OF SHARES SOLD DURING T HE YEAR WERE IN THE STOCK OF THE ASSESSEE FOR MORE THAN ONE YEAR AN D 26% SHARES WERE HELD FOR MORE THAN 3&1/2 YEARS AND AS SUCH CAN NOT BE TREATED AS BUSINESS INCOME ON ACCOUNT OF LTCG & STCG. SO, FOLLOWING THE ORDER (SUPRA) PASSED BY THE COORDINATE BENCH OF THE TRIBUNAL AND FACTS & CIRCUMSTANCES OF THE CASE THRASHED BY T HE LD. CIT (A) AT LENGTH, NO GROUND IS MADE OUT TO INTERFERE INTO THE ORDER PASSED BY THE LD. CIT (A), HENCE GROUNDS NO.1 & 2 ARE DETE RMINED AGAINST THE REVENUE AND ACCORDINGLY, THE APPEAL FILED BY TH E REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 17 TH DAY OF FEBRUARY , 2021. SD/- SD/- (R.K. PANDA) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 17 TH DAY OF FEBRUARY, 2021 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-33, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.