ACIT CIR 13(3), MUMBAI V. ANILKUMAR R, BANSAL, MUMBAI

ITA 209/MUM/2011

• Counselvise Citation: 20919914 RSA 2011
• Duration Of Justice: 4 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 03-06-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 10-01-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: C TRIPURA SUNDARI
• Assessee Lawyers: G IRISH DAVE
• Keywords: Business income; Question of law
• Section: 143(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A MUMBAI . . , , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI RAJENDRA, ACCOUNTANT MEMBER . / ITA NO.209/MUM/2011 / ASSESSMENT YEAR 2007-08 THE ACIT 13(3), ROOM NO.430, 4 TH FLOOR, AAYKAR BHAVAN, MK ROAD, NEW MARINELINES, MUMBAI 40020 / VS. SHRI ANILKUMAR R. BANSAL, BANSAL STEEL AGENCY, 515, GIRIRAJ BUILDING, S.T.ROAD, CARNAC BUNDER, MUMBAI 400 009 ./ ./ PAN/GIR NO. : AABPB 7358M ( / APPELLANT ) .. ( / RESPONDENT ) APPELLANT BY MS. C. TRIPURA SUNDARI RESPONDENT BY SHRI G IRISH DAVE ! ' / DATE OF HEARING : 03/06/2015 ! ' / DATE OF PRONOUNCEMENT : 03/06/2015 / O R D E R PER I.P.BANSAL, J.M: THIS IS AN APPEAL FILED BY THE REVENUE AND IT IS D IRECTED AGAINST ORDER PASSED BY LD. CIT(A)-24 MUMBAI DATED 28/10/2010 FOR ASSESSMENT YEAR 2007- 08. GROUNDS OF APPEAL READ AS UNDER: 1.(I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DIRECTING THE AO TO ASSESS AN AMOUNT OF RS.27,32,403/- AS SHORT TERM CAPITAL GAINS AND RS.5 1,293/- AS SPECULATION PROFIT AS AGAINST THE AO ASSESSING THE SUM OF RS.27,83,696/- (RS.27,32,403 + RS.51,293/-) AS BUSI NESS INCOME. (II) WHILE DOING SO THE LD. CIT(A) HAS ERRED IN NOT APPRECIATION THE FACTORS LIKE VOLUME, FREQUENCY, PERIOD OF HOLDING AS CRITER ION TO DETERMINE THE NATURE OF TRANSACTIONS. . / ITA NO.209/MUM/2011 / ASSESSMENT YEAR 2007-08 2 (III) LD. CIT(A) HAS FURTHER ERRED IN NOT APPRECIAT ING THE FACT THAT THE ASSESSEE IS A REGISTERED SUB-BROKER AND THUS HAS US ED HIS PROFESSIONAL SKILLS TO EXPLOIT THE MARKET AKIN TO A TRADER AND N OT AS AN INVESTOR.? 2. AT THE OUTSET, IT WAS FAIRLY STATED BY LD. AR AP PEARING ON BEHALF OF THE ASSESSEE THAT THE ISSUE RAISED BY THE REVENUE IN T HE PRESENT APPEAL IS COVERED AGAINST THE ASSESSEE BY THE DECISION OF THE TRIBUNA L IN ASSESSEES OWN CASE IN RESPECT OF ASSESSMENT YEAR 2006-07. REFERENCE IN T HIS REGARD WAS MADE TO THE ORDER OF THE TRIBUNAL DATED 2//5/2012 PASSED IN ITA NO.930/MUM/2010, COPY OF THE ORDER WAS PLACED ON OUR RECORD AND WAS ALSO GIVEN TO LD. DR. REFERENCE WAS MADE TO PARA-17 OF THE ORDER, THE SAME IS REPRO DUCED FOR THE SAKE OF CONVENIENCE. 17. IN THIS BACKDROP, LET US ANALYSE THE FACTS IN THE INSTANT CASE. THERE IS NOTHING ON RECORD TO SUGGEST THAT IN THE IMMEDI ATELY PROCEEDING YEAR THE ASSESSING OFFICER HAD AN OCCASION TO CONSIDER THE I SSUE IN GREAT DETAILS. IN OTHER WORDS, IT IS NOT THE CASE OF THE ASSESSEE THAT ASSE SSING OFFICER WAS AWARE OF THE FACT THAT THERE WERE REPEATED TRANSACTIONS OF THE SAME SCRIPS; IT IS NOT STATED THAT BORROWED FUNDS WERE UTILIZED FOR PURCHASE OF S HARES AND DESPITE SUCH FACTUAL MATRIX THE ASSESSING OFFICER HAS ACCEPTED T HE PURCHASE AS INVESTMENT AND NOT AS STOCK-IN-TRADE. IT APPEARS THAT FOR T HE IMMEDIATELY PRECEDING ASSESSMENT YEAR RETURN OF INCOME WAS PROCESSED U/S. 143(1) OF THE ACT AND HENCE THE ASSESSING OFFICER APPEARS TO HAVE NOT APP LIED HIS MIND. IN RESPECT OF THE A.Y 2007-08, LEARNED CIT(A) VIDE ORDER DATED 28 .10.2010 ACCEPTED THE PLEA OF THE ASSESSEE BY FOLLOWING HIS OWN ORDER FOR A.Y 200 6-07 WHICH IS IN APPEAL BEFORE US AND, IT IS MYSTERIOUS AS TO WHY THE REVEN UE HAS NOT PREFERRED ANY APPEAL FOR THE NEXT ASSESSMENT YEAR. IN RESPECT OF A.Y. 2009-10, THOUGH AN ORDER WAS PASSED U/S. 143(3) OF THE ACT, THE ASSESSING O FFICER HAS NOT INDICATED AS TO WHETHER THERE WERE REPETITIVE TRANSACTIONS OF SAME SCRIPS/SIMILAR SCRIPS. AT ANY RATE, IF PRINCIPLE OF RES-JUDICATA HAS TO BE APPLIE D, THE SAME PRINCIPLE SHOULD EQUALLY APPLY TO THE ASSESSEE SINCE THE ASSESSEE H AS ADMITTED THAT PART OF THE TRANSACTION ARE SPECULATIVE/BUSINESS IN NATURE AND NO APPEAL WAS PREFERRED BEFORE THE APPELLATE TRIBUNAL BY THE ASSESSEE. IN FACT, LEARNED CIT(A) HAS GIVEN CATEGORICAL FINDING THAT 74% OF THE TRANSACTIONS AR E SPECULATIVE IN NATURE AND 17% TRANSACTIONS GIVE RISE TO BUSINESS INCOME AND THUS OUT OF THE TOTAL VOLUME OF TRANSACTIONS, 91% ARE IN THE NATURE OF BUSINESS TR ANSACTIONS. WHEN THIS FINDING WAS ACCEPTED BY THE ASSESSEE, JUST BECAUSE FEW SHAR ES WERE HELD FOR MORE THAN TWO MONTHS THE SAME TRANSACTION WOULD NOT BECOME IN VESTMENT IN NATURE. IN OTHER WORDS, IF THE ASSESSEE IS HELD TO BE CARRYING ON BUSINESS IN SHARES, THE MODE OF RECORDING TRANSACTIONS IN THE BOOKS OR ITS HOLDING PERIOD ARE NOT DETERMINATIVE FACTORS TO UNDERSTAND THE NATURE OF TRANSACTIONS. WE THEREFORE ACCEPT THE PLEA OF THE REVENUE BY HOLDING THAT THE INCOME EARNED ON SALE OF SHARES SHOULD BE TAXED UNDER THE HEAD PROFITS AND GAINS OF BUSINESS/PROFESSION. IN THE RESULT, ORDER OF CIT( A) ON THIS ISSUE IS SET ASIDE AND WE UPHOLD THE ORDER OF THE AO. . / ITA NO.209/MUM/2011 / ASSESSMENT YEAR 2007-08 3 2.1 IT WAS FURTHER SUBMITTED BY LD. AR THAT THE ASS ESSEE HAS ALREADY FILED AN APPEAL AGAINST THE AFOREMENTIONED ORDER OF THE TRIB UNAL AND QUESTION OF LAW HAS ALREADY BEEN ADMITTED. HOWEVER, HE SUBMITTED T HAT AS PER RULE OF PRECEDENCE THE TRIBUNAL HAS TO FOLLOW ITS OWN ORDER . IN THIS MANNER THE APPEAL WAS ARGUED BY LD. AR. 3. ON THE OTHER HAND, LD. DR SUBMITTED THAT THE ISS UE IS COVERED IN FAVOUR OF REVENUE BY THE AFORESAID ORDER OF THE TRIBUNAL. 4. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY BEEN CONSIDERED. THE ISSUE IS COVERED AGAINST THE ASSES SEE BY THE AFOREMENTIONED DECISION OF THE TRIBUNAL. THE RELEVANT OBSERVATION S HAVE ALREADY BEEN REPRODUCED. THEREFORE, RESPECTFULLY FOLLOWING THE AFOREMENTIONED ORDER OF THE TRIBUNAL WE PASS SIMILAR ORDER AND ORDER PASSED BY LD. CIT(A) ON THIS ISSUE IS SET ASIDE AND ORDER PASSED BY AO IS UPHELD. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 03/06/2015 () * + 03/06/2015 SD/- SD/- ( , / RAJENDRA) ( . . / I.P. BANSAL) / ACCOUNTANT MEMBER / JUDICIAL MEMBER ( MUMBAI; * DATED 03/06/2015 . / ITA NO.209/MUM/2011 / ASSESSMENT YEAR 2007-08 4 ! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. .! ( ) / THE CIT(A)- 4. .! / CIT 5. /0 !12 , ' 12 , ( / DR, ITAT, MUMBAI 6. 3 / GUARD FILE. / BY ORDER, /! ! //TRUE COPY// / (DY./ASSTT. REGISTRAR) , ( / ITAT, MUMBAI . . ./ VM , SR. PS