VIMLABEN BHAWANJI KARANI, MUMBAI V. ITO WD 21(3)(2), MUMBAI

ITA 2000/MUM/2012

• Counselvise Citation: 200019914 RSA 2012
• Duration Of Justice: 1 year(s) 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Assessment Year: 2008-2009
• Appeal Filed On: 26-03-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: C P PATHAK
• Keywords: Business income; Opportunity of being heard

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F, MUMBAI .. , ! ' # $$, % ', & BEFORE SHRI R.S.SYAL, AM AND SHRI SANJAY GARG, JM ITA NO.2000/MUM/2012 : ASST.YEAR 2008-2009 SMT.VIMLABEN BHAWANJI KARANI C/O.NAVIN & ASSOCIATES, CAS ROOM NO.23, B WING, HAJI HABIB BLDG. ABOVE KOHINOOR ELECTRONICS NAIGAON CROSS ROAD, DADAR (EAST) MUMBAI 400 014. PAN : ACWPK6382M. THE INCOME TAX OFFICER WARD 21(3)(2) MUMBAI. ( '( / // / APPELLANT) * * * * / VS. ( +,'(/ RESPONDENT) '( - -- - . . . . / APPELLANT BY : SHRI NISHIT GANDHI +,'( - . - . - . - . / RESPONDENT BY : SHRI C.P.PATHAK * - /! / / / / DATE OF HEARING : 22.08.2013 012 - /! / DATE OF PRONOUNCEMENT : 28.08.2013 ' 3 ' 3 ' 3 ' 3 / / / / O R D E R PER R.S.SYAL (AM) : THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 06.02.2012 IN RELATION TO THE ASSESSMENT YEAR 2008-2009. 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAINST THE TREATMENT OF ` 7,59,520 AS `BUSINESS INCOME AS AGAINST `SHORT TER M CAPITAL GAIN CLAIMED BY THE ASSESSEE. BRIEFLY STATED THE FACTS O F THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL WHO SHOWED INCOME FRO M SALE OF SHARES AS SHORT TERM CAPITAL GAIN. THE ASSESSING OFFICER O BSERVED THAT THERE WAS NO OPENING AND CLOSING INVESTMENT IN SHARES. IT WAS FURTHER ITA NO.2000/MUM/2012. SMT.VIMLABEN BHAWANJI KARANI. 2 OBSERVED THAT IN CERTAIN CASES THE ASSESSEE RE-ENTE RED INTO THE PURCHASE AND SALE OF SUCH SHARES. IN THE BACKGROUND OF SUCH FACTS, HE HELD THAT THE INCOME OF ` 7.59 LAKH WAS LIABLE TO BE CONSIDERED AS `BUSINESS INCOME. NO RELIEF WAS ALLOWED IN THE FIR ST APPEAL. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE RELEVANT MATERIAL ON RECORD. A CHART HAS BEEN PLACED ON RECO RD WHICH SHOWS THAT THE ASSESSEE DEALT WITH CERTAIN SHARES INCLUDI NG ADHUNIK METALIKS LIMITED, IDBI, ISPAT INDUSTRIES, TORRENT PHARMACEUT ICALS ETC. IT IS ONLY IN RESPECT OF ADHUNIK METALIKS LIMITED THAT TH E ASSESSEE REPEATEDLY ENTERED INTO AND WENT OUT. IN RESPECT O F ALL OTHER SHARES DEALT WITH BY THE ASSESSEE, IT CAN BE SEEN THAT THE SE HAVE BEEN PURCHASED IN THE FIRST INSTANCE AND THEN SOLD WITHO UT RE-ENTERING INTO THEM TIME AND AGAIN. THE PERIOD OF HOLDING IN RESPE CT OF SHARES OTHER THAN ADHUNIK METALIKS LIMITED RANGES FROM LOWEST OF THREE DAYS TO THE HIGHEST OF 104 DAYS. EXCEPT FOR TWO TRANSACTION S, IN WHICH THE PERIOD OF HOLDING IS NOT IN DOUBLE DIGIT NUMBER OF DAYS, IN ALL OTHER TRANSACTIONS THE PERIOD OF HOLDING IS QUITE SUBSTAN TIAL. IN SUCH CIRCUMSTANCES THE QUESTION ARISES AS TO WHETHER TH E INCOME FROM SALE AND PURCHASE OF SHARES SHOULD BE CONSIDERED AS BUSI NESS INCOME OR CAPITAL GAIN. IT IS AXIOMATIC THAT THERE IS NO HAR D AND FAST RULE FOR DECIDING THE CHARACTER OF SHARE INCOME. IT DEPENDS UPON A HOST OF FACTS. APART FROM THAT, WE FIND THAT THERE IS NO BA R ON A PERSON IN KEEPING SOME SHARES AS `INVESTMENT AND OTHERS AS `STOCK IN TRADE. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE IN TOTALITY, WE ARE OF THE CONSIDERED OPINION THAT INCOME FROM SALE AN D PURCHASE OF ALL ITA NO.2000/MUM/2012. SMT.VIMLABEN BHAWANJI KARANI. 3 THE SHARES OF ADHUNIK METALIKS LIMITED SHOULD BE TA XED AS `BUSINESS INCOME AND FROM THE SHARES OF THE REMAINING COM PANIES AS SHORT TERM CAPITAL GAIN. THE IMPUGNED ORDER IS SET ASIDE AND THE MATTER IS RESTORED TO THE FILE OF A.O. FOR GIVING EFFECT TO O UR ABOVE DIRECTION. NEEDLESS TO SAY THE ASSESSEE WILL BE ALLOWED A REAS ONABLE OPPORTUNITY OF BEING HEARD. 4. 4 /5 6 7- 89 : ; ;3 / < - #/ => IN THE RESULT, THE APPEAL IS PARTLY ALLOWED FOR STATISTICA L PURPOSE. ORDER PRONOUNCED ON THIS 28 TH DAY OF AUGUST, 2013. ' 3 - 012 ?'*5 1 - $ SD/- SD/- (SANJAY GARG) (R.S.SYAL) % ' % ' % ' % ' / JUDICIAL MEMBER ! ' ! ' ! ' ! ' / ACCOUNTANT MEMBER MUMBAI ; ?'* DATED : AUGUST, 2013. DEVDAS* ' 3 - +%/;@ A @2/ ' 3 - +%/;@ A @2/ ' 3 - +%/;@ A @2/ ' 3 - +%/;@ A @2// COPY OF THE ORDER FORWARDED TO : 1. '( / THE APPELLANT 2. +,'( / THE RESPONDENT. 3. B () / THE CIT, MUMBAI. 4. B / CIT(A) 32, MUMBAI. 5. @E$ +%/%* , , / DR, ITAT, MUMBAI 6. $F / GUARD FILE. ' 3* ' 3* ' 3* ' 3* / BY ORDER, ,@/ +%/ //TRUE COPY// 8 8 8 8/ // /= # = # = # = # ( DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI