MINAL BHARAT PATEL, MUMBAI V. ACIT RG 21(1), MUMBAI

ITA 204/MUM/2014

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5971 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 11 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 18-02-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 08-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V G GINDE WITH KUMAR KALE
• Keywords: Business income; Rule of consistency; Transactions in derivatives; Set aside; Capital Gains
• Section: 143(3); 11; 15

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL F BENCH MUMB AI BEFORE SHRI G.S. PANNU, VICE-PRESIDENT AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO. 4093/MUM/2016 (ASSESSMENT YEAR 2010-11 ) ACIT- 25(3), 6 TH FLOOR, C-10, PRATYAKSHKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI-400051. VS. SHRI MILIND PANKAJ PATEL, 201, DEV NEO VIKRAM, B-WING, 2 ND FLOOR, SAHAKAR NAGAR CHS, ABOVE AUDI CAR SHOWROOM, NEW LINK ROAD, ANDHERI (W), MUMBAI-400053 . PAN: AMNPP4051B ITA NO. 4100/MUM/2016 (ASSESSMENT YEAR 2011-12 ) ACIT- 25(3), 6 TH FLOOR, C-10, PRATYAKSHKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI-400051. VS. SHRI MILIND PANKAJ PATEL, 201, DEV NEO VIKRAM, B-WING, 2 ND FLOOR, SAHAKAR NAGAR CHS, ABOVE AUDI CAR SHOWROOM, NEW LINK ROAD, ANDHERI (W), MUMBAI-400053 . PAN: AMNPP4051B ITA NO. 4094/MUM/2016 (ASSESSMENT YEAR 2010-11 ) ACIT- 25(3), 6 TH FLOOR, C-10, PRATYAKSHKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI-400051. VS. SHRI PANKAJ J. PATEL, 201, DEV NEO VIKRAM, B-WING, 2 ND FLOOR, SAHAKAR NAGAR CHS, ABOVE AUDI CAR SHOWROOM, NEW LINK ROAD, ANDHERI (W), MUMBAI-400053 . PAN: AABPP2157L ITA NO. 204/MUM/2014 (ASSESSMENT YEAR 2010-11 ) MRS. MINAL BHARAT PATEL, C/O FINQUEST SECURITIES PVT LTD., 602, BOSTAN HOUSE, SUREN ROAD, ANDHARI, (E) MUMBAI-400053. PAN: AACPP5126G VS. ACIT-21(1), 6 TH FLOOR, C-10, PRATYAKSHKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI-400051. ITA NO. 723/MUM/2014 (ASSESSMENT YEAR 2010-11) ITA NO. 4094/MUM/2016 SHRI MILIND PANKAJ PATEL & SI X ORS. 2 ACIT-21(1), 6 TH FLOOR, C-10, PRATYAKSHKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI-400051. VS. MRS. MINAL BHARAT PATEL, A-21-28, GOKUL ARCADE, NEXT TO GARWARE HOUSES, S.N. ROAD, VILE PARLE (E), MUMBAI-400057 . PAN: AACPP5126G ITA NO. 4095/MUM/2016 (ASSESSMENT YEAR 2011-12) ACIT-25(3 ), 6 TH FLOOR, C-10, PRATYAKSHKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA(E), MUMBAI-400051. VS. MRS. MINAL BHARAT PATEL, C/O FINQUEST SECURITIES PVT LTD., 602, BOSTAN HOUSE, SUREN ROAD, ANDHARI, (E) MUMBAI-400053. PAN: AACPP5126G ITA NO. 4887/MUM/2016 (ASSESSMENT YEAR 2010-11) ACIT- 25(3), ROOM NO. 601, 6 TH FLOOR, C- 10, PRATYAKSHKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA(E), MUMBAI-400051. VS. SMT. SWATI P. PATEL, 1, DIVYADARSHAN ROAD NO.5, BALLABH NAGAR SOCIETY, VILE PARLE (W), MUMBAI-400056 . PAN: AGXPP3883D APPELLANT RESPONDENT APPELLANT BY : MS S. PADMAJA CIT-DR WITH SHRI RAJEEV GUBGOTRA (SR DR) RESPONDENT BY : SHRI V.G. GINDE WITH KUMAR KALE (AR) DATE OF HEARING : 10.10.2018 DATE OF PRONOUNCEMEN T: 28.12.2018 ORDER UNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. THIS GROUP OF SEVEN APPEAL BY REVENUE ARE DIRECTED AGAINST THE DIFFERENT ORDERS OF COMMISSIONER OF INCOME-TAX (APPEALS) HERE INAFTER REFERRED AS ITA NO. 4094/MUM/2016 SHRI MILIND PANKAJ PATEL & SI X ORS. 3 LEARNED COMMISSIONER (APPEALS) FOR ASSESSMENT YEAR 2010-11 & 2011-12. IN ALL APPEALS THE REVENUE HAS RAISED CERTAIN COMMO N GROUNDS OF APPEAL, THEREFORE WITH THE CONSENT OF PARTIES ALL THE APPEA LS WERE CLUBBED TOGETHER, HEARD AND ARE DECIDED BY CONSOLIDATED ORDER. WITH T HE CONSENT OF PARTIES THE APPEAL IN ITA NO. 4094/MUM/2016 WAS TREATED AS LEAD CASE. IN ITA NO.4094/MUM/2016 THE REVENUE HAS RAISED FOLLOWING G ROUNDS OF APPEAL: 1. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) HAS ERRED IN NOT APPRECIATING THE SPECIFIC FINDINGS OF AO IN PARA 4.8 OF ASSESSMENT ORDER IN 'OTHER ASPECTS' WHEREIN HE SUCC ESSFULLY ESTABLISHED THAT ASSESSEE WAS NOT ABLE TO DIFFERENTIATE BETWEEN SHAR ES HELD AS STOCK IN TRADE AND SHARE HELD AS INVESTMENT.' 2. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CITCA) HAS ERRED IN NOT TREATING THE PROCEEDS FROM SALE OF SHARES AS BUSINESS INCOME.' 3. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CITCA) HAS ERRED IN NOT CONSIDERING THAT THE ASSESSEE WAS ENGAGED IN ONLY ACTIVITY OF EARNING PROFIT THROUGH PURCHASE & SALE OF SHARES, B E IT DERIVATIVES, INTRA-DAY, PURCHASE & SALE WITHIN SHORT PERIOD OR LONG PERIOD. ' 4. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) HAS ERRED IN TREATING PROFITS ON SHARE TRANSACTIONS AS CAPITAL GAINS IGNORING THAT THE INTENTION OF THE ASSESSEE WAS TO MAKE PROFIT AND NO T INVESTMENTS.' 5 'THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED .' 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS AN IND IVIDUAL AND DERIVES HIS INCOME FROM HOUSE PROPERTY, BUSINESS INCOME, CAPITA L GAIN AND INCOME FROM OTHER SOURCES. THE ASSESSEE FILED HIS RETURN O F INCOME FOR RELEVANT ASSESSMENT YEAR ON 13 TH OCTOBER 2010 DECLARING TOTAL INCOME OF RS. 6,42,24,968/-. THE RETURN OF INCOME WAS SELECTED FO R SCRUTINY. THE ASSESSMENT WAS COMPLETED ON 28 TH MARCH 2013 UNDER SECTION 143(3) OF THE ITA NO. 4094/MUM/2016 SHRI MILIND PANKAJ PATEL & SI X ORS. 4 ACT. IN THE RETURN OF INCOME, THE ASSESSEE HAS SHOW N SHORT TERM CAPITAL GAIN (STCG) OF RS. 2,89,93,072/- AND LONG TERM CAPI TAL GAIN (LTCG) OF RS. 3,59,95,197/- ON SALE OF SHARE AND CLAIMED EXEM PTION UNDER SECTION 10(38) OF THE ACT. THE ASSESSING OFFICER TREATED TH E SHORT TERM CAPITAL GAIN AND LONG-TERM CAPITAL GAIN AS BUSINESS INCOME OF THE ASSESSEE. ON APPEAL BEFORE THE LD. CIT(A), THE TREATMENT OF CAPI TAL GAIN AS BUSINESS INCOME WAS REVERSED. THEREFORE, BEING AGGRIEVED BY THE ORDER OF LD. CIT(A), THE REVENUE HAS FILED PRESENT APPEAL BEFORE US. 3. WE HAVE HEARD THE SUBMISSIONS OF THE LD. AUTHORISED REPRESENTATIVE (AR) OF THE ASSESSEE AND THE LD. DEPARTMENTAL REPRESENTA TIVE (DR) FOR REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE L EARNED DR FOR THE REVENUE SUPPORTED THE ORDER OF ASSESSING OFFICER. T HE LEARNED DR SUBMITS THAT DURING THE ASSESSMENT, THE ASSESSEE CLAIMED TH AT IN EARLIER YEARS THE CAPITAL GAIN WAS ACCEPTED BY THE REVENUE. THE LEARN ED DR SUBMITS THAT THE PRINCIPLE OF RES-JUDICATA IS NOT APPLICABLE IN THE INCOME TAX PROCEEDING. MOREOVER, THE ASSESSING OFFICER DURING THE ASSESSME NT HAS ANALYSED THE FACT OF THE YEAR UNDER CONSIDERATION AND CLEARLY BR ING THE FACTS ON RECORD BY ANALYSING THE VOLUME AND FREQUENCY OF TRANSACTION O F SCRIPT, THAT THE ACTIVITIES UNDERTAKEN BY ASSESSEE IN SALE AND PURCH ASES IN SHARE ARE BUSINESS ACTIVITY. 4. ON THE OTHER HAND THE LEARNED AR OF THE ASSESSEE SU PPORTED THE ORDER OF LEARNED COMMISSIONER (APPEALS). THE LEARNED AR OF T HE ASSESSEE SUBMITS ITA NO. 4094/MUM/2016 SHRI MILIND PANKAJ PATEL & SI X ORS. 5 THAT IN PAST, EXCEPT FOR ASSESSMENT YEAR 2003- 04, 2004- 05 AND IN 2009- 10, THE ASSESSEES STATUS OF INVESTORS IN SHARE WAS AC CEPTED BY THE DEPARTMENT AT THE ASSESSMENT LEVEL ITSELF. ONLY FOR ASSESSMENT YEAR 2003- 04 AND 2004- 05 THE ASSESSING OFFICER ASSESSED CAPITAL GAIN ON S ALE OF SHARE AS INVESTMENT AND BUSINESS INCOME. FOR THOSE YEARS THE ASSESSEES STAND WAS ACCEPTED BY LEARNED COMMISSIONER (APPEALS) AS WELL AS BY TRIBUN AL. THE REVENUE FILED APPEAL BEFORE THE HONBLE BOMBAY HIGH COURT AND THE SAME WAS DISMISSED VIDE ORDER DATED 23 RD OF JANUARY 2013. FURTHER FOR ASSESSMENT YEAR 2009- 10 ASSESSING OFFICER ASSESSED CAPITAL GAIN ON SALE OF SHARES AS BUSINESS INCOME. ON APPEAL BEFORE COMMISSIONER (APPEALS) THE STAND O F THE ASSESSEE WAS ACCEPTED. ON REVENUES APPEAL BEFORE TRIBUNAL FOR AS SESSMENT YEAR 2009-10 THE TRIBUNAL DECIDED THE ISSUE IN FAVOUR OF ASSESSE E VIDE ORDER DATED 28 TH MARCH 2014. THE LEARNED AR FOR THE ASSESSEE SUBMITS THAT THE ORDERS FOR EARLIER YEARS ARE PLACED ON RECORD. 5. THE LEARNED AR FURTHER SUBMITS THAT ASSESSEE IS A H IGH NET WORTH INDIVIDUALS HAVING OWN CAPITAL OF RS. 42.87 CRORE A S ON 31 ST MARCH 2010, THE BOOKS VALUE OF INVESTMENT IN SHARE WAS OF RS. 3 3.12 CRORE. DURING THE RELEVANT YEAR THE ASSESSEE RECEIVED DIVIDEND INCOME OF RS. 72.72 LAKHS THAT SHOWS THAT ASSESSEE HOLD ON TO ITS INVESTMENT. THE ASSESSEE HAS ALWAYS DEMONSTRATED HIS INTENTION AS INVESTORS AT THE TIME OF PURCHASE OF SHARE, WHICH IS EVIDENT FROM THE PROPER PRESENTATION OF SH ARE AS INVESTMENT IN HIS BOOKS OF ACCOUNT. DURING THE RELEVANT ASSESSMENT YE AR THE ASSESSEE AND ITA NO. 4094/MUM/2016 SHRI MILIND PANKAJ PATEL & SI X ORS. 6 LONG-TERM CAPITAL GAIN OF RS. 3.54 CRORE THAT SHOWE D THAT HE HOLDS SHARE FOR FAIRLY LONG TIME. THE COST OF SHARES SOLD DURING TH E YEAR IS RS. 1 9.54 CRORE, WHICH IS ABOUT 53% OF THE AVERAGE COST OF SHARES HE LD AS INVESTMENT. THIS MOVEMENT IN THE INVESTMENT SHOWS THAT ASSESSEE HOLD THESE SHARES AS INVESTMENT. THE TOTAL SHORT-TERM CAPITAL GAIN OF RS . 1.93 CRORE, ONLY 16% CAME FROM SHARES HELD FOR LESS THAN 30 DAYS, WHILE ABOUT 72% CAME FROM SHARE HELD FOR MORE THAN 90 DAYS. SOME SHARES WERE SOLD WITHIN LESS THAN 30 DAYS BECAUSE THE EXPECTED RETURN WAS UTILISED IN THESE SHARE FROM 25% TO 67%. 50% OF THE SHORT-TERM CAPITAL GAIN FROM THE SE SHARES WHERE THE ASSESSEE AND HIGH RETURN RAISING FROM 102% TO 305%. IN THE CATEGORY OF SHORT-TERM CAPITAL GAIN, THERE IS ONLY 75 SALES TRA NSACTIONS IN 43 SCRIPTS, ON AN AVERAGE SIX TRANSACTION PER MONTH. THE TOTAL COS T OF SHARES SOLD IS RS. 10.21 CRORE WHICH IS ABOUT 30% OF AVERAGE SIZE OF P ORTFOLIO OF RS. 36.50 CRORE. THEREFORE, THERE ARE NO VOLUMINOUS TRANSACTI ONS. ONLY IN TWO CASES, SHARES WERE REPURCHASED AFTER SALE; IT SHOULD NOT B E VIEWED AS TRADING IN SHARE. THE ASSESSEE IS CLAIM THAT HES AN INVESTOR AND NOT A TRADER CANNOT BE NEGATED ON THE BASIS OF LESS FREQUENCY OF TRANSA CTION AS BROUGHT ON RECORD. THE LEARNED AR OF THE ASSESSEE FURTHER SUBM ITS THAT IN LONG-TERM CAPITAL GAIN CATEGORY, THE ASSESSEE SOLD 46 SCRIPTS , WHICH WERE HELD FOR SUBSTANTIAL PERIOD BEFORE SALE. SOME OF THE SHARES WERE HELD FOR MORE THAN THREE YEARS, RESULTING IN LONG-TERM CAPITAL GAIN OF RS. 1.42 CRORE. THE AVERAGE RATE OF RETURN OF INVESTMENT WAS 47%, WHERE AS IN SOME ESCAPES THE ITA NO. 4094/MUM/2016 SHRI MILIND PANKAJ PATEL & SI X ORS. 7 RETURN HAS BEEN 132% TO 1746%. THE ALLEGATION OF MI SMATCH IN SHARE IN D- MAT ACCOUNT VIZ-A-VIZ SALES AND PURCHASE OF SHARES DURING THE YEAR AS RECORDED BY ASSESSING OFFICER IS INCORRECT. THE ASS ESSEE HAS DULY EXPLAINED THE REGIONS FOR APPARENT MISMATCH, WHICH AROSE BECA USE THE ASSESSING OFFICER DID NOT, CONSIDERED THE SHARES HELD BY BROK ER IN DEMAT ACCOUNTS, WHICH WERE KEPT BY THE ASSESSEE FOR MARGIN MONEY. T HE RECONCILIATION WAS PLACED BEFORE ASSESSING OFFICER TO EXPLAIN THAT THE RE WAS NO MISMATCH. THE SHARES HELD AS MARGIN BY THE BROKER CANNOT BE A FAC TOR TO TREAT THE ASSESSEE AS A TRADER, BECAUSE AS PER REGULATORY REQUIREMENT BROKERS HAVE TO TAKE MARGIN MONEY FROM THEIR CLIENTS TO MITIGATE RISK AN D SUCH MARGIN CAN BE PROVIDED IN THE FORM OF LISTED SECURITY IN INSTEAD OF FUNDS. IN SUPPORT OF HIS SUBMISSION THE LEARNED AR OF THE ASSESSEE RELIED UP ON THE FOLLOWING DECISIONS; (I) KORADIA CONSTRUCTION P. LTD VERSUS DCIT [2013] 39 T AXMANN.COM 20 (MUMBAI TRIBUNAL) (II) KARAMCHAND THAPER & BROS PRIVATE LTD (82 ITR 899) (III) CIT VS GOPAL PUROHIT ( 336 ITR 287 BOM) 122 TTJ, (IV) ASSOCIATED INDUSTRIAL DEVELOPMENT (82 ITR 586), (V) S.K. KANKAL HUF VS ITO [ITA NO. 4606/MUM/ 2013] DA TED 15.12.2016, (VI) DCIT VS RAMESH KUMAR GUPTA (ITA NO. 5254/MUM/2014). 6. THE LEARNED AR OF THE ASSESSEE FURTHER SUBMITS THAT IN VIEW OF THE CENTRAL BOARD OF DIRECT TAXES (CBDT) CIRCULAR NO.6/2016, DA TED 29 TH OF MAY 2016, THE APPEAL FILED BY THE REVENUE SHOULD BE DIS MISSED. THE CIRCULAR WAS ISSUED BY THE BOARD WITH A VIEW TO REDUCING LITIGAT ION, WHEREIN IT IS CLEARLY PROVIDED THAT IN CASE LISTED SHARES AND SECURITIES HELD FOR A PERIOD OF MORE ITA NO. 4094/MUM/2016 SHRI MILIND PANKAJ PATEL & SI X ORS. 8 THAN 12 MONTHS IMMEDIATELY PRECEDING THE DATE OF IT S TRANSFER, IF THE ASSESSEE DESIRE TO TREAT THE INCOME ARISING FROM TR ANSFER THEREOF AS A CAPITAL GAIN, THE SAME SHALL NOT BE PUT TO DISPUTE BY ASSES SING OFFICER. THE CONSISTENCY OF THE STAND ADOPTED BY ASSESSEE IN THI S REGARD HAS BEEN GIVEN DUE IMPORTANCE IN THIS SAID CIRCULAR. IN SUPPORT OF HIS SUBMISSION THE LEARNED AR OF THE ASSESSEE RELIED UPON THE FOLLOWIN G DECISION; (A) PCIT VS BHANUPRASD T TRIVEDI (HUF) [2017] 87 TAXM ANN.COM 137(GUJARAT) (B) S.K. KANKAL(HUF) VS ITO [ITA NO. 4606/MUM/2013, (C) DHIREM V MEHTA VS ACIT [ITA 2044 & 2045 /AHD/ 2008, (D) RAGHUVALIKA TRADING PVT LTD VS DCIT [ ITA NO. 849 T O 850/KOL/2014] AND (E) CIT VS INDIAN SYSTANS INVESTMENT PVT LTD. (TAX APPE AL NO. 500 &501 OF 2016. 7. THE LEARNED AR OF THE ASSESSEE SUBMITS THAT IN ALL ABOVE REFERRED CASES, ON THE BASIS OF BOARD CIRCULAR, NOT ONLY LONG-TERM CAP ITAL GAIN WAS ACCEPTED; EVEN SHORT-TERM CAPITAL GAIN WAS ALSO UPHELD. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE LEA RNED REPRESENTATIVES OF THE PARTIES AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE HAVE ALSO DELIBERATED ON VARIOUS CASE LAWS RELIED B Y THE LOWER AUTHORITIES. IN THE RETURN OF INCOME, THE ASSESSEE HAS SHOWN STCG OF RS. 2.89 CRORE AND LTCG OF RS. 3.59 CRORE O N SALE OF SHARE AND CLAIMED EXEMPTION UNDER SECTION 10(13) ON THE ENTIR E LTCG. THE ASSESSING OFFICER TREATED STCG AND LTCG AS BUSINESS INCOME, ON HIS OBSERVATION THAT ASSESSEE DEALT IN 74 SCRIPS AND TH E TOTAL QUANTITIES OF ALL THE SCRIPS WERE ABOVE RS. 23 LAKHS. THERE WERE 300 TRAN SACTIONS. THE TOTAL SALE ITA NO. 4094/MUM/2016 SHRI MILIND PANKAJ PATEL & SI X ORS. 9 VALUE OF SHARE WAS RS. 25.97 CRORE. THE HOLDING PER IOD OF DIFFERENT SCRIPS IS RAISING FROM 1 TO 365 DAYS. THE ASSESSEE CLAIMED STCG FOR 130 TRANSACTIONS, OUT OF WHICH IN 50 TRANSACTIONS, THE HOLDING PERIOD IS LESS THAN TWO MONTHS AND IN 90 TRANSACTIONS THE HOLDING PERIO D IS BELOW SIX MONTH. THE ASSESSEE HAS TENDENCY TO BOOK PROFIT/LOSS EVEN ON SLIGHT MOVEMENT OF PRICE OF SHARES. THE ASSESSEE EARNED 40% OF PROFIT WITHIN SPAN OF THREE MONTH AND 45% IN JUST SIX MONTH. THE ASSESSEE IS IN VOLVED IN TRADING AND RE-TRADING IN MAJORITY OF THE SCRIPS. THE ASSESSEE HAS ALSO TAKEN UNSECURED LOAN OF RS. 12.12 CRORE. THE ASSESSEES CAPITAL IS AROUND RS. 34 CRORE AND INVESTMENT IN SHARE IS RS. 33 CRORE AND BALANCE OF RS. 15 CRORE IS LYING WITH DIFFERENT BROKERS. THE ASSESSING OFFICER TOOK THE VIEW THAT ASSESSEE UTILIZED BORROWED FUND DIRECTLY OR INDIRECTLY. THE ASSESSEE ALSO EARNED SUBSTANTIAL PROFIT FROM F&O ACTIVITIES. FOR LTCG TH E ASSESSING OFFICER TOOK THE VIEW THAT IN SOME OF THE CASES, THE ASSESS EE HAS ZERO OPENING BALANCE IN THE D-MAT ACCOUNT BUT SHOWN LTCG ON THOS E SCRIPS. THE ASSESSEE WHEN ASKED TO PROVE THE LTCG THE ASSESSEE FURNISHED EVASIVE REPLY WITHOUT GIVING A PROPER RECONCILIATION. MAJOR ITY OF THE SHARE AT ONE POINT OF TIME OR OTHER ARE HELD AS MARGINAL/COLLATE RAL WITH BROKERS. AND NO INVESTOR WOULD TAKE SUCH STAND. THE ASSESSEE HAS SH OWN 14 SCRIPS RESULTING IN LTCG, THEREFORE, ON THE BASIS OF HIS OBSERVATION ABOUT NUMBER OF TRANSACTION IN SHORT TIME, THE ASSESSEE WAS TREATED AS TRADER. IN THE BOOKS OF ACCOUNT, THE ASSESSEE HAS SHOWN THE SHARES AS INVES TMENT ONLY. ITA NO. 4094/MUM/2016 SHRI MILIND PANKAJ PATEL & SI X ORS. 10 9. THE LD. CIT(A) WHILE CONSIDERING THE CONTENTION OF ASSESSEE OBSERVED THAT THE ASSESSEE HAS NOT UTILISED ANY BORROWED FUND FOR PURCHASE OF SHARES. IN THE BOOKS OF ACCOUNT, THE ASSESSEE HAS SHOWN THE SH ARES ARE HELD AS INVESTMENT AND NOT A TRADING STOCK. THE ASSESSEES INTENTION IS CONSISTENT AS A INVESTOR WHICH IS REFLECTED IN HER INCOME-TAX RET URN. THE LD. CIT(A) FURTHER OBSERVED THAT THE ASSESSEE FURNISHED A FACT UAL CHARGE-SHEET ABOUT THE PAST ASSESSMENT FROM A.Y. 2003-04 TO 2009-10 ALONG WITH THE COPY OF RELEVANT ORDERS. THE LD. CIT(A) FURTHER CONCLUDED T HAT ASSESSEES STATUS OF INVESTOR WAS ACCEPTED AT ASSESSMENT STAGE, EXCEPT T HREE A.YS I.E. 2003-04, 2004-05 & 2009-10. IN A.Y. 2003-04 & 2004-05, THE C LAIM OF ASSESSEE WAS ACCEPTED BY LD. CIT(A) AND CONFIRMED BY TRIBUNAL. T HE APPEAL FILED BY DEPARTMENT BEFORE THE HONBLE COURT WAS DISMISSED V IDE ORDER DATED 23.01.2013. THE LD. CIT(A) ALSO QUOTED THE RELEVANT PART OF ORDER OF HONBLE BOMBAY HIGH COURT. THE LD. CIT(A) ON THE BA SIS OF PAST HISTORY CONCLUDED THAT THE INVESTMENT ACTIVITIES OF ASSESSE E IS ALSO SIMILAR WITH A.Y. 2010-11. MOREOVER, THE CLAIM OF ASSESSEE FROM A.Y. 2005-06 TO A.Y. 2008-09 WAS ACCEPTED AT THE STAGE OF ASSESSMENT ITS ELF. FOR A.Y. 2009-10, WHEREIN SIMILAR CAPITAL GAIN WAS TREATED AS BUSINES S INCOME AND ON APPEAL BEFORE THE LD. CIT(A), THE ISSUE WAS DECIDED IN FAV OUR OF ASSESSEE VIDE ORDER DATED 07.07.2012. THE ORDER OF LD. CIT(A) WAS CONFIRMED BY TRIBUNAL VIDE ORDER DATED 28.03.2014. FURTHER, FOR A.Y. 2012-13, THE ITA NO. 4094/MUM/2016 SHRI MILIND PANKAJ PATEL & SI X ORS. 11 ASSESSING OFFICER HIMSELF ACCEPTED THE CLAIM OF ASS ESSEE UNDER SECTION 143(3) DATED 25.05.2015. 10. WE HAVE NOTED THAT THE CLAIM OF ASSESSEE IS CONSIST ENTLY ACCEPTED EITHER AT THE ASSESSMENT STAGE OR AT THE STAGE OF FIRST APPEA L BY LD. CIT(A), WHICH IS CONFIRMED BY TRIBUNAL AND ON APPEAL BEFORE HONBLE JURISDICTIONAL HIGH COURT, THE ORDER OF TRIBUNAL WAS UPHELD. WE HAVE FU RTHER NOTED FROM THE CHART FURNISHED BY LD. AR OF THE ASSESSEE FROM A.Y. 2001-02 TO A.Y. 2015- 16, AND EXCEPT FOR THE YEAR UNDER CONSIDERATION, TH E STATUS OF ASSESSEE IS ACCEPTED IN A.Y. 2001-02, 2002-03, 2005-06, 2006-07 , 2007-08, 2008-09, 2012-13, 2013-14, 2014-15 AND 2015-16 AT ASSESSMENT STAGE ONLY. FOR A.Y. 2003-04 AND 2004-05, 2009-10, 2010-11, THE STATUS O F ASSESSEE AS INVESTOR WAS ACCEPTED BY LD. CIT(A), WHICH WAS CONFIRMED BY TRIBUNAL. FURTHER, THE APPEAL OF REVENUE FOR A.Y. 2003-04 & 2004-05 HAS BE EN DISMISSED BY HONBLE BOMBAY HIGH COURT. THEREFORE, KEEPING IN VI EW, THE PRINCIPLE OF CONSISTENCY IN ABSENCE OF CHANGE OF MATERIAL FACT V IS-A-VIS THE FACTS OF THE PREVAILING YEAR UNDER CONSIDERATION, THE REVENUE SH OULD ACCEPT THE TREATMENT OF CLAIM OF ASSESSEE IN THE SIMILAR WAY A S TREATED IN EARLIER YEARS. 11. THE HONBLE SUPREME COURT IN RADHA SOAMI SATSANG VS . CIT [193 ITR 321(SC)] HELD, THAT STRICTLY SPEAKING RES JUDICATA DOES NOT APPLY TO INCOME- TAX PROCEEDINGS. EACH ASSESSMENT YEAR BEING A UNIT, WHAT IS DECIDED IN ONE YEAR MAY NOT APPLY IN THE FOLLOWING YEAR BUT WHERE A FUNDAMENTAL ASPECT PERMEATING THROUGH THE DIFFERENT ASSESSMENT YEARS H AS BEEN FOUND AS A FACT ITA NO. 4094/MUM/2016 SHRI MILIND PANKAJ PATEL & SI X ORS. 12 ONE WAY OR THE OTHER AND PARTIES HAVE ALLOWED THAT POSITION TO BE SUSTAINED BY NOT CHALLENGING THE ORDER, IT WOULD NOT BE AT AL L APPROPRIATE TO ALLOW THE POSITION TO BE CHANGED IN A SUBSEQUENT YEAR. 12. THE HONBLE BOMBAY HIGH COURT IN CIT VS. GOPAL PURO HIT [336 ITR 287 (BOM)] ALSO HELD THAT RES JUDICATA IS NOT APPLICABL E TO ASSESSMENT PROCEEDINGS, YET THERE SHOULD BE UNIFORMITY IN TREA TMENT AND CONSISTENCY WHEN FACTS AND CIRCUMSTANCES ARE IDENTICAL. THEREFO RE, IN VIEW OF THE ABOVE FACTUAL AND LEGAL DISCUSSION, WE DO NOT FIND ANY IL LEGALITY OR INFIRMITY IN THE ORDER PASSED BY LD. CIT(A), WHICH WE AFFIRM. SINCE WE HAVE ACCEPTED THE CONTENTION OF ASSESSEE ON THE PRINCIPLE OF CONSISTE NCY, THEREFORE, THE DISCUSSION ON THE OTHER CONTENTION OF ASSESSEE HAVE BECOME ACADEMIC. 13. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ITA NO. 4093/MUM/2016 BY REVENUE FOR A.Y. 2010-11 ( MILIND PANKAJ PATEL). 14. THE REVENUE HAS RAISED IDENTICAL GROUND OF APPEAL A S RAISED IN ITA NO. 4094/MUM/2016. AS WE HAVE ALREADY NOTED THAT THERE IS NO MATERIAL CHANGE IN THE FACTS IN THE APPEAL UNDER CONSIDERATION. THE REFORE, KEEPING IN VIEW, THE PRINCIPLE OF CONSISTENCY, THE APPEAL OF THE REV ENUE IS DISMISSED WITH SIMILAR OBSERVATIONS. ITA NO. 4095/MUM/2016 BY REVENUE FOR A.Y. 2011-12 ( MRS. MINAL BHARAT PATEL) ITA NO. 4094/MUM/2016 SHRI MILIND PANKAJ PATEL & SI X ORS. 13 15. THE REVENUE HAS RAISED IDENTICAL GROUND OF APPEAL A S RAISED IN ITA NO. 4094/MUM/2016. AS WE HAVE ALREADY NOTED THAT THERE IS NO MATERIAL CHANGE IN THE FACTS IN THE APPEAL UNDER CONSIDERATION. THE REFORE, KEEPING IN VIEW, THE PRINCIPLE OF CONSISTENCY, THE APPEALS OF THE RE VENUE ARE DISMISSED WITH SIMILAR OBSERVATIONS. ITA NO. 4100/MUM/2016 BY REVENUE FOR A.Y. 2011-12 ( MILIND P. PATEL) 16. THE REVENUE HAS RAISED IDENTICAL GROUND OF APPEAL A S RAISED IN ITA NO. 4094/MUM/2016. AS WE HAVE ALREADY NOTED THAT THERE IS NO MATERIAL CHANGE IN THE FACTS IN THE APPEAL UNDER CONSIDERATION. THE REFORE, KEEPING IN VIEW, THE PRINCIPLE OF CONSISTENCY, THE APPEAL OF THE REV ENUE IS DISMISSED WITH SIMILAR OBSERVATIONS. ITA NO. 4887/MUM/2016 BY REVENUE FOR A.Y. 2010-11 ( SWATI P. PATEL) 17. THE REVENUE HAS RAISED IDENTICAL GROUND OF APPEAL A S RAISED IN ITA NO. 4094/MUM/2016. AS WE HAVE ALREADY NOTED THAT THERE IS NO MATERIAL CHANGE IN THE FACTS IN THE APPEAL UNDER CONSIDERATION. THE REFORE, KEEPING IN VIEW, THE PRINCIPLE OF CONSISTENCY, THE APPEAL OF THE REV ENUE IS DISMISSED WITH SIMILAR OBSERVATIONS. ITA NO. 723/MUM/2014 BY REVENUE & ITA NO. 204/MUM/2 014 BY ASSESSEE FOR A.Y. 2010-11 (MRS. MINAL BHARAT PATEL) 18. THE REVENUE IN ITS APPEAL IN ITA NO. 723/MUM/2014 HAS RAISED IDENTICAL GROUND OF APPEAL AS RAISED IN ITA NO. 4094/MUM/2016 . AS WE HAVE ITA NO. 4094/MUM/2016 SHRI MILIND PANKAJ PATEL & SI X ORS. 14 ALREADY NOTED THAT THERE IS NO MATERIAL CHANGE IN T HE FACTS IN THE APPEAL UNDER CONSIDERATION. THEREFORE, KEEPING IN VIEW, TH E PRINCIPLE OF CONSISTENCY, THE APPEAL OF THE REVENUE IS DISMISSED WITH SIMILAR OBSERVATIONS. 19. IN CROSS APPEAL, THE ASSESSEE HAS RAISED THE GROUND S THAT CIT(A) DIRECTED THE ASSESSING OFFICER TO TREAT THE INCOME OF CAPITA L GAIN UNDER THE BUSINESS INCOME WHEREIN THE HOLDING PERIOD IS EQUAL OR LESS THAN 30 DAYS AND SHARES ARE SUBJECT TO SECURITY TRANSACTION CHARGES. THE AS SESSEE ALSO RAISED THE ISSUE IN TREATING THE ASSESSEE AS A SHARE TRADER IN STEAD OF INVESTOR. CONSIDERING THE FACT THAT ON IDENTICAL FACTS, WE HA VE DISMISSED THE APPEAL OF REVENUE IN ASSESSEES GROUP CASE, WHEREIN THE ASSES SEE WAS HELD AS A TRADER. WE HAVE NOTED THAT FACTS OF THE APPEAL IN OUR HAND ARE ALMOST SIMILAR AS IN ASSESSEES GROUP CASE. THEREFORE, KEEPING IN VIEW T HE PRINCIPLE OF CONSISTENCY, THE GROUNDS OF APPEAL RAISED BY ASSESS EE ARE ALLOWED. 20. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED A ND CROSS APPEAL RAISED BY ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28/ 12/2018. SD/ SD/- G.S. PANNU PAWAN SINGH VICE-PRESIDENT JUDICIAL MEMBER MUMBAI, DATE: 28.12.2018 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) ITA NO. 4094/MUM/2016 SHRI MILIND PANKAJ PATEL & SI X ORS. 15 4. THE CONCERNED CIT 5. DR F BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI