Smt. Nanda Dilip Gugale, Pune V. Income-tax Officer,

ITA 2145/PUN/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93769 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 26-05-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 10-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASEEM SHARMA
• Assessee Lawyers: DEEPAK GUNDOCHA
• Keywords: Business income; Rule of consistency; Bonafide belief; Question of law
• Section: 143(3); 260A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO.2145/PN/2013 (ASSESSMENT YEAR : 2010-11) SMT. NANDA DILIP GUGALE, 203, SAUDAMINI APARTMENTS, 402, SHANIWAR PETH, MAHENPURA, PUNE -30 .. APPELLANT PAN NO.AJUPG5513D VS. ITO, WARD-1(1), PUNE .. RESPONDENT APPELLANT BY : SHRI PRAMOD SHINGTE & SHRI DEEPAK GUNDOCHA DEPARTMENT BY : SHRI ASEEM SHARMA DATE OF HEARING : 26-05-2015 DATE OF PRONOUNCEMENT : 29-05-2015 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 30-09-2013 OF THE CIT(A)-I, PUNE RELATING T O ASSESSMENT YEAR 2010-11. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND FILED HER RETURN OF INCOME ON 30-09-2010 DECL ARING TOTAL INCOME AT RS.11,48,860/-. THE ASSESSEE DERIVES INCO ME FROM PROFIT AND GAINS OF BUSINESS/PROFESSION, SHORT TERM C APITAL GAIN. IN THE RETURN OF INCOME FILED, THE SHORT TERM CAPITAL GAIN OF RS.45,72,326/- EARNED DURING THE YEAR UNDER CONSIDERATION WAS SET /OFF AGAINST BROUGHT FORWARD SHORT TERM CAPITAL LOSS O F RS. 34,23,469/- RELATING TO THE EARLIER YEAR. ON BEING CONFRONT ED BY THE AO THE ASSESSEE SUBMITTED THAT THE SHARES AVAILABLE WITH THE ASSESSEE HAVE BEEN HELD AS INVESTMENTS AND SHOWN AS S UCH IN THE BOOKS AND THE HENCE THE GAINS FROM TRANSACTIONS IN SHARES 2 ARE SHOWN AS SHORT TERM CAPITAL GAINS. THE ASSESSING OFFICE R HOWEVER NOTICED THAT THE ASSESSEE HAS BEEN DEALING IN V ARIOUS NUMBERS OF SHARES AND THE FREQUENCY OF PURCHASING AND S ELLING THE SHARES IS REGULAR AND RECURRING. FROM THE VOLUME AND FREQUENCY OF TRANSACTIONS IN SHARES AND SECURITIES, THE AO NOTED THAT THE ONLY BUSINESS CARRIED ON BY THE ASSESSEE DU RING THE RELEVANT YEAR HAS BEEN TO DEAL IN SHARES AND SECURITIES SO AS TO EARN HANDSOME GAINS/ ACCORDING TO THE, AO, THE ASSESSEE HAS BEEN DERIVING PROFIT MAINLY FROM SINGLE ACTIVITY, I.E. SALE AND PURCHASE OF SHARES THROUGH THE STOCK EXCHANGE, BUT IT HAS BEEN ARTIFICIALLY SHOWN AS SHORT TERM CAPITAL GAINS IN THE RETURN OF INCOME. HE OBSERVED THAT THE MANNER IN WHICH SHARES AR E SHOWN, WHETHER AS STOCK IN TRADE OR INVESTMENT IS NOT C ONCLUSIVE PROOF THAT IT IS NOT SHARE TRADING BUSINESS AS PROPOUNDE D IN THE CASE OF INVESTMENT LTD. VS. CIT REPORTED IN 77 ITR 533. 2. 1 REFERRING TO VARIOUS DECISIONS, DEFINITION OF 'BUSINESS ', AS ENVISAGED UNDER SEC. 2(13) OF THE I.T. ACT AND CONSIDERING HIGH VOLUME, FREQUENCY, CONTINUITY AND REGULARITY OF THE TRANSACT IONS IN SHARES AND SECURITIES, THE AO WAS PRIMA FACIE OF THE V IEW THAT TRANSACTIONS WERE BEING CARRIED OUT WITH A PROFIT MOTIVE I N AN ORGANIZED MANNER AND THEREFORE PROFIT ON SALE AND PURCHA SE OF SHARES IN THE INSTANT CASE WAS TAXABLE AS BUSINESS INC OME AND NOT CAPITAL GAINS. HE THEREFORE ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE PROFIT FROM TRANSACTIONS IN SHARES DURING THE YEAR SHOULD NOT BE CONSIDERED AS BUSINESS PROFIT AND TAXED ACCORDINGLY. IN RESPONSE, THE ASSESSEE REFERRED TO THE INSTRUCTION OF CBDT DATED 31.08.1989 AS WELL AS CIRCULAR NO. 4/2007 DA TED 15.06.2007 AND DISTINGUISHED THE CASE LAWS QUOTED IN THE S HOW CAUSE NOTICE OF THE AO. 3 2.2 THE VARIOUS ARGUMENTS ADVANCED BY THE ASSESSEE HO WEVER FAILED TO IMPRESS THE ASSESSING OFFICER. ACCORDING TO THE AO, THE ASSESSEE HAS FAILED TO JUSTIFY HOW THE FACTS OF THE CASE WERE DISTINGUISHABLE. THE BOARD'S CIRCULAR RELIED UPON BY THE AS SESSEE STATES THAT THE TESTS LAID DOWN IN THE DECISIONS ARE NOT CONCLUSIVE BUT IT DEPENDS ON FACTS OF EACH CASE. IT WAS EMPHASIZED BY THE AO THAT THE ACTIVITIES OF THE ASSESSEE ARE NOTHING BUT O NLY 'PURCHASE AND SALE' OF THE SHARES AND UNITS AND WHAT N EEDS TO BE LOOKED INTO IS THAT WHETHER THE ASSESSEE HAS BEEN PURCHASING AN D SELLING SHARES AND UNITS IN A SYSTEMATIC AND ORGANIZED MAN NER WITH A PROFIT MOTIVE AND THE ASSESSEE'S CASE IS A FIT CASE FOR TREATING THE SAID ACTIVITY AS BUSINESS ACTIVITY. IN SUPPORT OF THIS OBSERVATION, THE ASSESSING OFFICER TABULATED THE DETAILS OF TRANSACTIONS IN SHARES AND SECURITIES CARRIED OUT BY THE ASSESSEE DURING THE YEAR WHICH ARE AS UNDER: SR. NO. DETAILS OF TRANSACTIONS A.Y. 2010-11 1. TOTAL NO. OF SHARES PURCHASED DURING THE YEAR 3,14,010 2. TOTAL NO. OF SHARES SOLD DURING THE YEAR 2,32,810 3. TOTAL COST OF SHARES PURCHASED RS.5,61,30,950 4. TOTAL VALUE OF SHARES SOLD RS. 5,52,34,268 5. MAXIMUM NO. OF SHARES SOLD IN A DAY (23.11.09) 25,000 6. TOTAL NO. OF TRANSACTIONS DURING YEAR WHERE SHARES WERE PURCHASED 61 7. TOTAL NO. OF TRANSACTIONS DURING YEAR WHERE SHARES WERE SOLD 47 8. TOTAL NO. OF SCRIPTS DEALT WITH BY THE ASSESSEE 94 2.3 FROM THE ABOVE DATA RELATING TO THE TRANSACTIONS IN SHARES CARRIED OUT DURING THE YEAR, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS SOLD IN ALL 2,32,810 SHARES DURING THE YEAR A ND ON A SINGLE DAY 25,000 SHARES WERE SOLD, WHICH SHOWS THE HIGH FREQUENCY AND THE SUBSTANTIAL NATURE OF THE TRANSACTIONS . IT WAS ALSO POINTED OUT THAT SOON AFTER THE SALE OF SHARES, THE SALE 4 PROCEEDS ARE UTILIZED AGAIN IN PURCHASING SHARES/UNITS. IT WAS OBSERVED THAT IN MOST OF CASES THE ASSESSEE HAS PURCH ASED THE SHARES DURING THE YEAR AND THESE SHARES WERE IMMEDIATE LY SOLD WITHIN A SHORT SPAN OF 10-15 DAYS JUST TO EARN HANDSOM E PROFIT BY TRADING THROUGH SHARES. IT WAS FURTHER NOTED BY THE AO THAT THE RATIO OF SHARES PURCHASED TO SHARES SOLD DURING THE YEAR IS MORE THAN 90%, WHICH FURTHER SUBSTANTIATES THE STAND OF THE DEPARTMENT THAT THE SHARES ARE PURCHASED WITH AN INTE NTION TO TRADE AND NOT TO HOLD AS INVESTMENT AND THEREFORE, THE SAME CANNOT BE TREATED AS AN INVESTMENT ACTIVITY. 2.4 FURTHER, SEEKING TO DIFFERENTIATE THE DECISION OF BOMBAY HIGH COURT IN THE CASE OF CIT VS. GOPAL PUROHIT (228 CTR 5 82), THE ASSESSING OFFICER OBSERVED THAT THE HON'BLE HIGH COUR T HAS UPHELD THE DECISION OF THE TRIBUNAL THAT IT IS OPEN TO AN A SSESSEE TO MAINTAIN TWO SEPARATE PORTFOLIOS, ONE RELATING TO INVESTM ENT IN SHARES AND ANOTHER RELATING TO BUSINESS ACTIVITY INVOLVING DEALING IN SHARES. ACCORDING TO THE A O. THE FACT AND CIRCUMSTANCE S IN THE PRESENT CASE ARE DIFFERENT IN THE SENSE THAT THE ASSESS EE IS ENGAGED IN BUSINESS ACTIVITY DEALING IN SHARES AND THE MAG NITUDE OF TRANSACTIONS IS HIGH AND HOLDING PERIOD IS VERY LOW. THE ASSESSING OFFICER POINTED OUT THAT THE MINIMUM HOLDING PERIOD IN THE PRESENT CASE CLEARLY SUGGESTS THAT THE ASSESSEE HAS NEVER INTENDED TO REAP THE BENEFITS OF THE DIVIDEND AND THE SEC URITIES WERE ACQUIRED FOR THE PURPOSE OF TRADING PRIMARILY AND IN FACT ON HUGE TURNOVER OF MORE THAN FIVE CRORES, THE DIVIDEND INCOM E AS SHOWN IN THE RETURN OF INCOME IS NIL. AS PER THE AO, IN THE INSTANT CASE, THE DOMINATING FACTOR IS THEREFORE CLEARLY EARNING PR OFIT IN SHORT TENURE BY ACTIVELY PARTICIPATING IN SHARE TRADING AND THE ACTIVITY OF THE ASSESSEE IS NEVER AN INVESTMENT ACTIVITY BUT A 5 BUSINESS ACTIVITY AND THE DECISION OF BOMBAY HIGH COURT I S NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. 2.5 REJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASSES SEE AND DISTINGUISHING VARIOUS DECISIONS THE AO TREATED THE SH ORT TERM CAPITAL GAIN OF RS.45,72,326/- DECLARED BY THE ASSESS EE AS BUSINESS INCOME. 3. BEFORE THE CIT(A) IT WAS SUBMITTED THAT FROM DAY ONE T HE ASSESSEE HAS BEEN INVOLVED IN SHARE TRADING ACTIVIT Y AS AN INVESTOR AND EVEN IN EARLIER YEARS WITH SIMILAR KIND OF VOLUM E, THE LOSS WAS TREATED AS SHORT TERM CAPITAL LOSS AND WAS ALLOW ED TO BE CARRIED FORWARD. IT WAS ARGUED THAT ONLY IN THIS YEAR THE ASSESS ING OFFICER TRIED TO CALL THIS ACTIVITY AS BUSINESS ACT IVITY WITH THE INTENTION OF DENYING THE SET OFF AND SUCH AN APPROA CH OF THE ASSESSING OFFICER IS NOT TENABLE IN THE EYES OF LAW AND THE ASSESSING OFFICER HAS TO FOLLOW THE CONSISTENCY, IF SHARES ARE HELD AS INVESTMENTS. FOR THIS PROPOSITION, THE ASSESSEE RELIED U PON THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE O F CIT VS. GOPAL PUROHIT (2011) 336 ITR 287 (BOM) IN WHICH IT H AS BEEN HELD THAT THERE OUGHT TO BE UNIFORMITY AND CONSISTENCY IN VARIOUS YEARS WHEN THE FACTS AND CIRCUMSTANCES ARE IDENTICA L. IT WAS FURTHER CONTENDED THAT THE ASSESSING OFFICER TREATE D THE TRANSACTIONS AS BUSINESS ACTIVITY ON ACCOUNT OF HIG H VOLUME, FREQUENCY, CONTINUITY AND REGULARITY INVOLVED IN TRANSACTIONS AND ALTHOUGH THESE CRITERIA ARE IMPORTANT, BUT THEY ARE 'NOT NECESSARILY DECISIVE AND IT HAS TO BE JUDGED WITH REFERENCE TO FA CTS OF EACH CASE. IT WAS ARGUED THAT EVEN OTHERWISE THE T OTAL NO. OF TRANSACTIONS, WHERE SCRIPS ARE SOLD ARE ONLY 47 AND TOT AL NUMBER OF SCRIPS INVOLVED IS ONLY 24 OUT OF WHICH SOME OF THE SCRIP S WERE BROUGHT FORWARD FROM EARLIER YEARS. IT WAS SUBMITTE D THAT 6 THE ASSESSEE DEPLOYED HER OWN FUNDS FOR MAKING INVESTMEN TS IN SHARES AND SHE WAS NOT HAVING ANY BORROWED FUNDS. REFE RRING TO THE JUDGMENT IN THE CASE OF GOPAL PUROHIT (SUPRA), IT WAS ARGUED THAT IF THE TRANSACTION IS IN THE NATURE OF INVESTMENT TR ANSACTION, THE PROFIT RECEIVED THERE FROM SHOULD BE TREATED AS EITHE R LONG TERM OR SHORT TERM CAPITAL GAINS DEPENDING UPON THE PER IOD OF HOLDING. THE ASSESSEE ALSO REFERRED TO THE DECISION OF MUM BAI BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. SMK SHARES & STOCK BROKING VIDE ITA NO.799/MUM/2009, WHEREIN IT HAS BE EN HELD THAT MERE LARGE VOLUMES OF PURCHASE AND SALES DO NO T PER SE MEANS ACTIVITY IN BUSINESS. FOR THE SAME PROPOSITION, THE ASSESSEE ALSO REFERRED TO DECISION OF ITAT, MUMBAI IN THE CASE OF MANAGEMENT STRUCTURE & SYSTEM VS. ITO IN ITA NO.6966/MUM/2007. THE ASSESSEE URGED THAT IN VIEW OF THE SE FACTS, THE ASSESSING OFFICER MAY BE DIRECTED TO TREAT THE PROFITS AND GAINS FROM TRANSACTIONS IN SHARES AS CAPITAL GAIN AS CLAIMED BY THE ASSESSEE AND ALLOW THE SET OFF OF BROUGHT FORWARD SHORT TERM CAPITAL LOSS OF EARLIER YEARS. 3.1 IN THE ALTERNATIVE, THE ASSESSEE STATED THAT A SSESSING OFFICER HAS TREATED THE INCOME FROM CAPITAL GAINS A S BUSINESS INCOME BUT DID NOT GRANT REDUCTION IN THE VALUE OF SHARES, BY VALUING IT AT MARKET VALUE, HELD ON THE LAST DAY OF THE YEAR AS PER THE BALANCE SHEET FOR THE IMPUGNED YEAR. THE ASSESS EE REQUESTED THAT THE SHARES HELD AS ON THE LAST DAY OF THE IMPUGNED YEAR AS PER BALANCE SHEET MAY BE ALLOWED TO BE VALUED A T MARKET COST IF THE IMPUGNED INCOME IS TREATED AS BUSINESS INCOME. 4. HOWEVER, THE LD.CIT(A) ALSO WAS NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE AND UPHELD THE ACTION OF THE ASSESSING OFFICER IN TREATING THE CAPITAL GAIN ON SALE OF SHA RES AS 7 BUSINESS INCOME. WHILE DOING SO, HE OBSERVED THAT THE MAGNITUDE AND FREQUENCY OF THE TRANSACTIONS IN SHARES OF VARIOUS COMPANIES IN THE LAST THREE YEARS ARE QUITE SUBSTANTIAL. T HE SALE AND PURCHASE OF SHARES OF SUCH MAGNITUDE REGULARLY INDICA TES A SYSTEMATIC ACTIVITY BY THE ASSESSEE WITH A MOTIVE TO MAK E PROFITS FROM DEALING IN SHARES AND SECURITIES. THE ASSESSEE IS NOT A MERE INVESTOR IN SHARES OF A FEW COMPANIES THE ASSESSEE HAS D EALT IN SHARES OF SEVERAL COMPANIES AND THERE WAS A SYSTEMATIC , ORGANIZED ACTIVITY EVERY YEAR WITH A SET PURPOSE OR CON DUCT IN THE MATTER OF ACQUIRING, HOLDING AND SELLING OF SHARES. THE SALE AND PURCHASE OF SHARES HAVE BEEN MADE ON REGULAR BASIS IN A LL THE YEARS. IF THE TRANSACTIONS ARE ADJUDGED FROM THE POINT OF VIEW OF VOLUME, FREQUENCY, CONTINUITY AND REGULARITY, IT LEADS TO AN INFERENCE THAT THE INTENTION OF THE ASSESSEE WAS TO DEAL IN SHARES AND SECURITIES. THE CONDUCT OF THE ASSESSEE ALL ALONG AND THE PATTERN OF PURCHASES AND SALE OF SHARES OF DIFFERENT COMPA NIES CLEARLY INDICATE THAT THIS IS NOT A CASE WHERE THE ASSES SEE CONTENTED HERSELF WITH MERELY MAKING AN INVESTMENT-AND LO OKING FOR DIVIDEND AND MAXIMIZATION OF INVESTMENTS. 4.1 AS REGARDS THE SUBMISSION OF THE ASSESSEE ABOUT THE TREATMENT OF PURCHASE OF SHARES AS INVESTMENTS IN ITS B OOKS, THE LD.CIT(A) OBSERVED THAT ENTRIES IN BOOKS OF ACCOUNTS OF TH E ASSESSEE BY THEMSELVES ARE NOT CONCLUSIVE AND DECISIVE FACTOR IN TREATING THE TRANSACTION OF PURCHASE AND SALE OF SHARES AS AN INVESTMENT AS AN INVESTMENT AS SUCH. TO FIND OUT THE RE AL AND TRUE MOTIVE OF THE ASSESSEE AND THE NATURE OF TRANSACT ION, IT IS NECESSARY TO CONSIDER ALL OTHER ASPECTS OF THE CASE INST EAD OF MERELY RELYING ON THE WAY IN WHICH ACCOUNTS WERE PREPA RED AND PRESENTED BY THE ASSESSEE. 8 4.2 HE NOTED THAT IN THE CASE OF ASSESSEE, IT IS AMPLY DEMONSTRATED FROM THE FREQUENCY AND MAGNITUDE OF THE TRANSACTIONS AND RATIO OF PURCHASES AND SALES TO TOTAL H OLDINGS DURING THE YEAR AND EARLIER YEARS THAT THERE WAS A SYS TEMATIC, CONTINUOUS AND ORGANIZED CARRYING ON OF BUSINESS ACTIVITY OF PURCHASE AND SALE OF SHARES NOT ONLY IN THE YEAR UNDE R APPEAL BUT ALSO IN EARLIER YEARS AND SUCH ACTIVITY CONSTITUTES AN ADV ENTURE IN THE NATURE OF TRADE. IN SUCH A SITUATION, WHERE THE ASS ESSES WAS CARRYING ON BUSINESS OF PURCHASE AND SALE OF SHARES WITH A MOTIVE TO EARN PROFIT, EVEN IF SUCH TRANSACTIONS ARE RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE AS INVESTMENT, THE ASSESSING OFFICER IS JUSTIFIED IN LAW IN COMPUTING INCOME ON SALE OF SUCH SHARES UNDER' THE HEAD 'BUSINESS'. 5. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW LEARNED ASSESSING OFFICER HAS ERRED IN TREATING SHORT TE RM CAPITAL GAIN ON SHARES, A SUM OF RS.45,72,326/- AS BUSINESS INCOME OF THE APPELLANT BY DISREGARDING APPELLANTS CONTENTION IN TH IS REGARD. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW LEARNED ASSESSING OFFICER HAS ERRED IN NOT ALLOWING THE SET OFF OF BROUGHT FORWARD SHORT TERM CAPITAL LOSS OF RS.34,23,46 9/- AND HAS ALSO FURTHER ERRED IN NOT ALLOWING TO CARRY FORWARD OF THE SAID LOSS. WITHOUT PREJUDICE TO ABOVE GROUND YOUR APPELLANT WI SHES TO TAKE FOLLOWING GROUND: 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW LEARNED ASSESSING OFFICER HAS ERRED IN TREATING THE INCO ME FROM CAPITAL GAIN AS BUSINESS INCOME AND CONSEQUENTLY NOT GR ANTING THE REDUCTION IN THE VALUE OF SHARES HELD ON THE LAST DAY BY THE APPELLANT. YOUR APPELLANT PRAYS THAT IF THE INCOME ON ACCOUNT O F SHARES IS TREATED AS BUSINESS INCOME THEN ASSESSING OFFICER MAY BE DI RECTED TO ALLOW BOOKING THE REDUCTION IN THE VALUE OF SHARES ON THE LAST DAY OF THE BALANCE SHEET. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW LEARNED ASSESSING OFFICER HAS ERRED IN CHARGING INTEREST U/S.234B BY DISREGARDING THE FACT THAT APPELLANT WAS NOT LIABLE F OR PAYMENT OF ADVANCE TAX AS SHE HAS BROUGHT FORWARD CAPITAL LOSS AND APPELLANT 9 WAS UNDER THE BONAFIDE BELIEF THAT SHE IS LEGALLY ENTI TLED FOR SET OFF THE LOSS. 6. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY CHALLENGE D THE ORDER OF THE CIT(A). HE SUBMITTED THAT THE ASSESSEE SINC E LAST SO MANY YEARS HAS SHOWN THE GAIN/LOSS REALIZED FROM SALE OF S HARES UNDER THE HEAD CAPITAL GAIN AS PER PROVISIONS OF LAW AND RETURNS HAVE BEEN FILED ACCORDINGLY. THE ASSESSEE HAS BEEN DULY CARRYING OUT THE ACTIVITY OF INVESTMENTS AS AN INVESTOR AND NOT OTHERWISE. THE ASSESSEE HAS NOT UTILIZED ANY BORROWED FUND AND THE SHARES ARE SHOWN IN THE BALANCE SHEET AT COST UNDER THE HEAD INVESTMENT. HE SUBMITTED THAT ALL SHARES ARE DELIVERY BAS ED. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT DURING THE A.Y . 2009- 10 THE ASSESSEE SUFFERED SUBSTANTIAL LOSS DUE TO THE SU DDEN CRASH IN THE MARKET AND SHE SUFFERED THE SHORT TERM CAPITAL LOS S OF RS.34,23,467/- AND THE LOSS SO INCURRED IN THE A.Y. 2009-10 HAS BEEN CARRIED FORWARD TO THE SUBSEQUENT ASSESSMENT YEA R. SINCE THE MARKET CONDITIONS IMPROVED THE ASSESSEE EARNED SHO RT TERM CAPITAL GAIN ON SALE OF SHARES OF A SUM OF RS.45,72,326/- AN D CLAIMED SET OFF OF THE BROUGHT FORWARD SHORT TERM CAPITAL LOSS OF EARLIER YEARS AGAINST THIS GAIN. HE SUBMITTED THAT SINCE T HE ASSESSEE WAS CARRYING OUT THE ACTIVITY OF SHARE AS AN IN VESTOR AND SINCE THE GAINS ARE TAXED UNDER THE HEAD CAPITAL GAIN EV EN WHEN THERE WAS VOLUME AND FREQUENCY, THEREFORE, THE LOWER AUTH ORITIES ARE NOT JUSTIFIED IN TREATING THE SAME BUSINESS INCOME FOR THE IMPUGNED ASSESSMENT YEAR. 6.1 REFERRING TO THE FOLLOWING DECISIONS HE SUBMITTED THAT UN DER IDENTICAL CIRCUMSTANCES VARIOUS JUDICIAL AUTHORITIES HAVE ACC EPTED THE SHORT TERM CAPITAL GAIN AS DECLARED BY THE ASSESSEE AS AGAINST 10 BUSINESS INCOME TREATED BY THE AO EVEN WHEN THERE WAS HIGH VOLUME, FREQUENCY, CONTINUITY AND REGULARITY : 1. CIT VS. GURUCHARANKAUR BALDEVSINGH WAHI ITA NO.1 3/2004 ORDER DATED 05-02-2015 HONBLE BOMBAY HIGH COURT 2. CIT VS. GOPAL PUROHIT REPORTED IN 336 ITR 286 3. GURUCHARANKAUR B. WAHI VS. DCIT VIDE ITA NOS. 82 & 1332/PN/2011 ORDER DATED 22-03-2013 4. ADDL.CIT VS. RDA HOLDING AND TRADING PVT. LTD. ITA NO.2229/PN/2013 ORDER DATED 30-10-2014 5. RAJENDRA BABURAO SHINDE VS. DY.CIT ITA NO.1454/ PN/2011 ORDER DATED 23-05-2013. HE ACCORDINGLY SUBMITTED THAT THE ORDER OF THE CIT(A) BE SET ASIDE AND THE GROUNDS RAISED BY THE ASSESSEE SHOULD BE ALLOWED. 7. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER H AND HEAVILY RELIED ON THE ORDER OF THE CIT(A). HE SUBMITTED TH AT SINCE THE ASSESSEE IS CARRYING OUT THE ACTIVITY IN A VERY SYST EMATIC MANNER AND THERE IS HIGH VOLUME, FREQUENCY, CONTINUITY AND REGULARITY IN SUCH TRANSACTIONS AND THE SHARES WERE HELD FOR A VERY FEW DAYS, THEREFORE, UNDER THE FACTS AND CIRCUMSTANC ES OF THE CASE THE CIT(A) WAS JUSTIFIED IN UPHOLDING THE ACTION OF THE AO IN TREATING SUCH GAIN AS BUSINESS INCOME. 8. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND TH E CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HA VE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND T HE AO IN THE INSTANT CASE CONSIDERED THE SHORT TERM CAPITAL GA IN OF RS.45,72,326/- DECLARED BY THE ASSESSEE AS BUSINESS INCOM E ON THE GROUND THAT THERE IS HIGH VOLUME, FREQUENCY, CONTINUITY AND REGULARITY AND THE TRANSACTIONS ARE BEING DONE WITH A PR OFIT MOTIVE IN AN ORGANISED MANNER AND THE ASSESSEE HAS GIVE N THEM 11 A FLAVOUR OF TRADE. WE FIND THE LD.CIT(A) ALSO UPHELD THE ACT ION OF THE AO. HE ALSO WENT BY THE THEORY OF FREQUENCY AND M AGNITUDE OF THE TRANSACTIONS DURING THE YEAR AND EARLIER YEARS AND HELD THA T THERE WAS A SYSTEMATIC, CONTINUOUS AND ORGANISED CARRYIN G ON BUSINESS ACTIVITY OF PURCHASE AND SALE OF SHARES AND SEC URITIES NOT ONLY IN THE YEAR UNDER APPEAL BUT ALSO IN EARLIER YEA RS AND SUCH ACTIVITY CONSTITUTES AN ADVENTURE IN THE NATURE OF TRADE. 8.1 IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSE E THAT SINCE LAST SO MANY YEARS SUCH PROFIT ON SALE OF SHARES H AS BEEN SHOWN AS SHORT TERM CAPITAL GAIN OR LONG TERM CAPITAL GAIN AS THE CASE MAY BE AND THE REVENUE HAS ACCEPTED THE SAME. THE ASSESSEE HAS NOT UTILISED ANY BORROWED CAPITAL AND THE S HARES ARE SHOWN IN THE BALANCE SHEET UNDER THE HEAD INVESTMENT A T COST PRICE. 8.2 WE FIND UNDER SOMEWHAT IDENTICAL FACTS THE HONBLE BOMBAY HIGH COURT IN THE CASE OF GURUCHARANKAUR BALDEVS INGH VIDE ITA NO.13/2004 AND BATCH OF OTHER APPEALS ORDER DA TED 05- 02-2015 HAD AN OCCASION TO DECIDE THE ISSUE. IN THAT C ASE THE ASSESSEE EARNED PROFIT FROM PURCHASE AND SALE OF SHARES. THIS ACTIVITY WAS QUITE MIXED AND FOR NUMBER OF YEARS THE ASS ESSEES HAVE MADE GOOD PROFIT IN THIS ACTIVITY ALSO. THEY DIVIDED T HE PROFIT MADE IN THIS LINE IN THREE PARTS. THE PROFIT MADE IN NON DE LIVERY BASED TRANSACTIONS OF SHARES WAS CLASSIFIED AS BUSINESS INC OME WHICH WAS SUSCEPTIBLE TO HIGHER RATE OF INCOME TAX. THE SECOND CLASS WAS SHORT TERM CAPITAL GAIN FROM DELIVERY BASED TRANSACTIONS. HERE ALSO HIGHER RATE OF INCOME TAX WAS P AID. THE THIRD CLASS WAS LONG TERM CAPITAL GAIN WHERE THE SHARES W ERE HELD AFTER HOLDING THEM FOR MORE THAN 12 MONTHS. IN A.Y. 2005 -06 THE ASSESSEE SHOWED SHORT TERM CAPITAL GAIN TO THE TUNE OF RS.28 12 LAKHS. THE AO ACCEPTED THIS AS SHORT TERM CAPITAL GAIN A ND NOT BUSINESS PROFIT BUT DURING THE A.Y. 2006-07 THIS INCOME INCREASED TO THE TUNE OF RS.48 LAKHS. IN THE A.Y. 2007-08 THE SHO RT TERM CAPITAL GAIN DECREASED TO RS.22 LAKHS. THE AO IN THE ASSE SSMENT TREATED SUCH SHORT TERM CAPITAL GAIN AS BUSINESS INCOME ON ACCOUNT OF THE FOLLOWING : (1) THE REGULARITY, FREQUENCY, VOLUME AND CONTINUI TY IS QUITE HIGH. (2) THE ASSESSEE PURCHASED SHARES AND ITS DOMINANT INTENT ION WAS TO EARN PROFIT WITHIN MINIMUM TIME. (3) THE INTENTION OF HOLDING THE SHARES FOR LONGER PE RIOD TO EARN DIVIDEND IS MISSING UNLESS THE ASSESSEE HAD TAKEN RECOURSE TO THE BENEFIT OF SECTION 94(7) OF THE I.T. ACT. (4) WHETHER TWO SEPARATE ACCOUNT AND THE ENTRIES ARE MADE IN THE BOOKS OF ACCOUNTS. IT IS FOUND THAT NO SEPARATE AC COUNTS DISTINGUISHING THE INVESTMENT AND STOCK HAVE BEEN MAINT AINED. (5) THE ASSESSEE WAS RIDING VERY HIGH IN THE BOOM PERIOD AND WANTED TO MAKE QUICK BUCKS. 8.3 THE CIT(A) UPHELD THE ACTION OF THE AO. ON FURTHER AP PEAL THE TRIBUNAL ALLOWED THE CLAIM OF SHORT TERM CAPITAL GAIN DEC LARED BY THE ASSESSEE. ON FURTHER APPEAL BY THE REVENUE T HE HONBLE BOMBAY HIGH COURT DISMISSED THE APPEAL FILED BY THE REVENU E BY OBSERVING AS UNDER : 5. IN VIEW OF THIS, WE WOULD ALSO EXAMINE THE FACTS OF THESE CASES TO FIND OUT WHETHER THE TRANSACTIONS WHICH ARE SHOWN BY THE ASSESSEE AS SHORT TERM CAPITAL GAIN OR WERE ADVENTURES IN THE NATURE OF TRADE? WE HOLD THAT THEY WERE SHORT TERM CAPITAL GAIN. THE FIRST REASON IS THAT THE ASSESSEE WERE EARNING SHORT TERM CAPIT AL GAIN BY SALE OF SHARES FOR YEARS TOGETHER. THEY FURTHER KEPT A DMITTING THAT THE TRANSACTIONS IN SHARE, WHICH WERE NOT DELIVERY BA SED, EARNED THEM PROFIT AND THE SAME WAS AN INCOME FROM BUSINESS. S O, FROM TRANSACTIONS IN SHARE, THE ASSESSEES WERE REGULARLY GETTIN G INCOME AS BUSINESS INCOME ON ONE SIDE AND AS CAPITAL GAIN ON OTHER SIDE. THIS PATTERN CONTINUED FOR MORE THAN 25 YEARS AND SO THE A SSESSING OFFICER OUGHT TO HAVE ACCEPTED THIS PATTERN FOR THE ASSESSMENT YEARS ALSO. HAVING REGARD TO THE LAW ON THE SUBJECT THERE WAS POSSIBILITY THAT EVEN THE SHORT TERM CAPITAL GAIN SHOWN IN THE AC COUNT BOOK OF THE ASSESSEES COULD HAVE BEEN CATEGORIZED AS BUSINESS PROFIT BUT THIS WOULD HAVE AMOUNTED TO DISCONTINUING THE EARLIER PRA CTICE. THIS CHANGE WAS POSSIBLE ONLY ON THE BASIS OF STRONG CIRCUMSTAN CES AND EVIDENCE. THERE IS NO EVIDENCE ON RECORD BESIDES THE NUMBER OF TRANSACTIONS AND THE PROFIT EARNED. INDEED, THE NUMB ER OF 13 TRANSACTIONS INCREASED IN THE ASSESSMENT YEAR BUT THE ASSESS ING OFFICER OUGHT TO HAVE COLLECTED EVIDENCE TO AT LEAST SUGGEST THAT THE PATTERN OF BUSINESS ACTIVITY OF THE ASSESSEE CHANGED, THEI R MAIN LINE OF TRANSPORT WAS NO LONGER CONTINUED AS MAIN LINE ETC. IF THIS WAS NOT DONE, WE ARE NOT INCLINED TO GIVEN IMPORTANCE TO TH E CIRCUMSTANCES FOR WHICH THE ASSESSING OFFICER PLACED RELIANCE. SIMIL AR VIEW IS TAKEN BY THE MEMBERS OF TRIBUNAL. WE NEED NOT THINK IT NE CESSARY TO CHANGE SUCH FINDING. WE CONFIRM THE SAME. APPEALS DI SMISSED. 8.4 WE FIND THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. GOPAL PUROHIT REPORTED IN 336 ITR 287 HAS HELD AS UNDER : THE TRIBUNAL HAS ENTERED A PURE FINDING OF FACT THA T THE ASSESSEE WAS ENGAGED IN TWO DIFFERENT TYPES OF TRANSACTIONS. THE FIRST SET OF TRANSACTIONS INVOLVED INVESTMENT IN SHARES. THE SECOND SET OF TRANSACTIONS INVOLVED DEALING IN SHARES FOR THE PURPOSES OF BUSINESS (DESCRIBED IN PARA 8.3 OF THE JUDGMENT OF THE TRIBUN AL AS TRANSACTIONS PURELY OF JOBBING WITHOUT DELIVERY). THE TRIBUNAL HAS CORRECTLY APPLIED THE PRINCIPLE OF LAW IN ACCEPTING THE POSITION THAT IT IS OPEN TO AN ASSESSEE TO MAINTAIN TWO SEPARATE PORTFOLIO S, ONE RELATING TO INVESTMENT IN SHARES AND ANOTHER RELATING TO BUSINESS ACTIVITIES INVOLVING DEALING IN SHARES. THE TRIBUNAL H ELD THAT THE DELIVERY BASED TRANSACTIONS IN THE PRESENT CASE, SHOULD B E TREATED AS THOSE IN THE NATURE OF INVESTMENT TRANSACTIONS AND THE PROFIT RECEIVED THEREFROM SHOULD BE TREATED EITHER AS SHORT- TERM OR, AS THE CASE MAY BE, LONG-TERM CAPITAL GAIN, DEPENDING UPON THE PERIOD OF THE HOLDING. A FINDING OF FACT HAS BEEN ARRIVED AT B Y THE TRIBUNAL AS REGARDS THE EXISTENCE OF TWO DISTINCT TYPES OF TRANSACTI ONS NAMELY, THOSE BY WAY OF INVESTMENT ON ONE HAND AND THOSE FOR T HE PURPOSES OF BUSINESS ON THE OTHER HAND. QUESTION (A) ABOVE, DOES NOT RAISE ANY SUBSTANTIAL QUESTION OF LAW. INSOFAR AS QUESTION (B) IS CONCERNED, THE TRIBUNAL HAS O BSERVED IN PARA 8.1 OF ITS JUDGMENT THAT THE ASSESSEE HAS FOLLOWED A CONSISTENT PRACTICE IN REGARD TO THE NATURE OF THE ACTIVITIES, THE MANNER OF KEEPING RECORDS AND THE PRESENTATION OF SHARES AS INVESTMENT AT THE END OF THE YEAR, IN ALL THE YEARS. THE REVENUE SUBMIT TED THAT A DIFFERENT VIEW SHOULD BE TAKEN FOR THE YEAR UNDER CO NSIDERATION, SINCE THE PRINCIPLE OF RES JUDICATA IS NOT APPLICABLE TO ASSESSMENT PROCEEDINGS. THE TRIBUNAL CORRECTLY ACCEPTED THE POSI TION THAT THE PRINCIPLE OF RES JUDICATA IS NOT ATTRACTED SINCE EACH ASSESSMENT YEAR IS SEPARATE IN ITSELF. THE TRIBUNAL HELD THAT THERE O UGHT TO BE UNIFORMITY IN TREATMENT AND CONSISTENCY WHEN THE FACT S AND CIRCUMSTANCES ARE IDENTICAL, PARTICULARLY IN THE CASE OF THE ASSESSEE. THIS APPROACH OF THE TRIBUNAL CANNOT BE FAULTED. THE REVENUE DID NOT FURNISH ANY JUSTIFICATION FOR ADOPTING A DIVERGEN T APPROACH FOR THE ASSESSMENT YEAR IN QUESTION. QUESTION (B), THEREFORE, DOES NOT ALSO RAISE ANY SUBSTANTIAL QUESTION. INSOFAR AS QUESTION (C) IS CONCERNED, AGAIN THERE CANNO T BE ANY DISPUTE ABOUT THE BASIC PROPOSITION THAT ENTRIES IN THE BOOKS OF ACCOUNT ALONE ARE NOT CONCLUSIVE IN DETERMINING THE NATURE OF INCOME. THE TRIBUNAL HAS APPLIED THE CORRECT PRINCIP LE IN ARRIVING AT THE DECISION IN THE FACTS OF THE PRESENT CASE. THE FIND ING OF FACT DOES NOT CALL FOR INTERFERENCE IN AN APPEAL UNDER S. 260A . NO SUBSTANTIAL QUESTION OF LAW IS RAISED. THE APPEAL IS ACCORDINGLY DI SMISSED. 14 8.5 WE FURTHER FIND THE PUNE BENCH OF THE TRIBUNAL IN THE C ASE OF RAJENDRA BABURAO SHINDE VS. DCIT VIDE ITA NO.1545/PN/ 2011 ORDER DATED 23-05-2013 HAD AN OCCASION TO DECIDE AN ID ENTICAL ISSUE AND THE TRIBUNAL ALLOWED THE CLAIM OF SHORT TERM CAP ITAL GAIN AS DECLARED BY THE ASSESSEE BY OBSERVING AS UNDER : 12. ON THIS ASPECT, THE PRELIMINARY POINT MADE OUT BY THE LEARNED COUNSEL FOR THE ASSESSEE IS THAT THE LOWER AUTHORITIES HAV E ERRED IN TREATING THE GAIN ON SALE OF SHARES AS BUSINESS INCOME IN THIS YEAR, WHICH IS INCONSISTENT WITH THE STAND ACCEPTED BY THE DE PARTMENT FOR THE PRECEDING ASSESSMENT YEARS 2004-05 AND 2005-06. IN THIS REGARD, THE LEARNED COUNSEL FOR THE ASSESSEE HAS REFERRED TO THE PAPER BOOK IN WHICH THE COPY OF THE INCOME TAX RETURN ALO NG WITH THE FINANCIAL STATEMENTS FOR THE ASSESSMENT YEARS 2004-05 AND 2005-06 HAVE BEEN PLACED AT PAGES 36 TO 26 AND 16 TO 31 RESPE CTIVELY TO POINT OUT THAT THE GAIN/LOSS ON SALE OF SHARES/UNITS WAS ACCEPT ED ASRAJENDRA BABURAO SHINDE A.Y. 2006-07 ASSESSABLE UNDER THE HEAD CAPITAL GAINS. THE ASSESSMENT ORDERS PASSED UNDER SECTION 143(3) DATED 10.10.2006 AND 26.12.2007 FOR THE ASSESSMENT YEA RS 2004-05 AND 2005-06 RESPECTIVELY HAVE ALSO BEEN PLACED IN THE PAPER BOOK IN THIS REGARD. IT IS POINTED OUT THAT EVEN IN THE INSTAN T ASSESSMENT YEAR, THE GAIN ON THE SALE OF SHARES/UNITS IS LIABLE TO BE CON SIDERED IN THE SAME LIGHT AS IN THE TWO PRECEDING ASSESSMENT YEARS AND TH ERE IS NO CHANGE IN FACTS AND CIRCUMSTANCES. IN SUPPORT, THE LEAR NED COUNSEL HAS RELIED UPON THE JUDGEMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. GOPAL PUROHIT (2011) 336 ITR 287 (BOM.). THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF GOPAL PUROH IT (SUPRA) WAS CONSIDERING AN ISSUE AS TO WHETHER THE INCOME FROM TRA DING IN SHARES WAS TO BE CONSTRUED AS BUSINESS INCOME OR CAPITAL GAINS. IN THE CASE BEFORE THE HON'BLE BOMBAY HIGH COURT, IN THE PRECED ING YEARS THE ACTIVITY FROM THE TRADING IN SHARES WAS CONSIDERED AS AN INVESTMENT ACTIVITY LIABLE FOR CAPITAL GAINS. THE HON'BLE HIGH COURT UPHELD THE VIEW OF THE TRIBUNAL HOLDING THAT THE PRINCIPLE OF CONSISTENCY MUST BE APPLIED AND DID NOT APPROVE OF TREATING THE TRAD ING IN SHARES AS BUSINESS INCOME ACTIVITY. IN VIEW OF THE PROPOSITION L AID DOWN BY THE HON'BLE JURISDICTIONAL HIGH COURT, THE PRELIMINARY P LEA OF THE ASSESSEE IS RELEVANT. IN THIS BACKGROUND, THE LEARNED DEP ARTMENTAL REPRESENTATIVE WAS REQUIRED TO EXPLAIN THE POSITION IN THE LIGHT OF THE MATERIAL REFERRED TO BY THE ASSESSEE, WHICH IS PLACE D ON RECORD. OSTENSIBLY, IN THE EARLIER ASSESSMENT YEARS ASSESSEE HAS CARRI ED OUT SIMILAR TRANSACTIONS AND THEIR CHARACTERIZATION AS INVE STMENT ACTIVITY GIVING RISE TO THE INCOME UNDER THE HEAD CAPITAL GAI NS, HAS BEEN ACCEPTED THE ASSESSING OFFICER IN ASSESSMENTS MADE UNDER SEC TION 143(3) OF THE ACT. THEREFORE, IN THE LIGHT OF THE P RINCIPLE OF CONSISTENCY, IN THIS YEAR ALSO, THE INCOME FROM THE SALE OF SHARES IS LIABLE TO BE TREATED AS INCOME FROM CAPITAL GAINS AS D ECLARED BY THE ASSESSEE IN ITS RETURN OF INCOME. NOTABLY, THE DEPARTMEN T HAS NOT SHOWN ANY CHANGE IN RAJENDRA BABURAO SHINDE A.Y. 200 6-07 FACTS AND CIRCUMSTANCES IN THIS YEAR, SO AS TO WARRANT ANY DEP ARTURE FROM THE POSITION ACCEPTED IN THE PAST YEARS. CONSEQUENTLY, ON THIS PRELIMINARY ISSUE, THE ORDER OF THE CIT(A) IS SET-ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO TREAT THE INCOME FROM T HE SALE OF SHARES AND UNITS AS ASSESSABLE UNDER THE HEAD 'CAPITAL GAIN S' AND NOT AS BUSINESS INCOME. THE ASSESSEE SUCCEEDS ON THIS GROUND. 15 8.6 SINCE THE ASSESSEE IN THE INSTANT CASE IS CONSISTENTL Y SHOWING THE GAIN ON SALE OF SHARES AS SHORT TERM CAPITAL GAIN OR LONG TERM CAPITAL GAIN AS THE CASE MAY BE, ALL THE SHARES ARE DELIVERY BASED, THE VALUE OF SHARES IS SHOWN IN THE BALANCE SHEET UNDER THE HEAD INVESTMENT AT COST PRICE AND THERE IS N O BORROWED FUND UTILISED FOR PURCHASE OF THE SHARES, THEREFORE, FOLLOWING T HE ABOVE DECISIONS CITED (SUPRA) WE HOLD THAT THE PROFIT ON SA LE OF THE SHARES HAVE TO BE TREATED AS SHORT TERM CAPITAL GAIN. WE ACCORDINGLY SET ASIDE THE ORDER OF THE CIT(A) AND THE G ROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 29-05-2015. SD/- SD/- (VIKAS AWASTHY) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER SATISH PUNE DATED: 29 TH MAY, 2015 COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. CIT(A)-I, PUNE 4. CIT-I, PUNE 5. THE D.R, A PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY ITAT, PUNE BENCHES, PUNE