Asstt.Commissioner of Income Tax, Circle,-1, Nagpur V. Shri. Sanjay Ishwarlal Ranka, Nagpur

ITA 216/NAG/2009

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9658 (ITAT-NAGPUR)
• Duration Of Justice: 3 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 09-10-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 01-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR MILIND BHUSARI
• Keywords: Business income; Salary income; Question of law
• Section: 14A

Judgement Text

ITA NO. 216 &218 /NAG/2009 SANJAY ISHWARLAL RANKA, NAGPUR & KU. SHRADDHA SANJAY RANKA, NAGPUR IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH , NAGPUR BEFORE: SHRI P.K. BANSAL , ACCOUNTANT MEMBER AND SHRI D.T. GARASIA , JUDICIAL MEMBER ITA NO. 216 / NAGPUR / 20 09 ASSESSMENT YEAR : 2006 - 07 ACIT CIRCLE - 1 NAGPUR VS. SANJAY ISHW ARLAL RANKA NAGPUR (APPELLANT) (RESPONDENT) PAN NO.ABWPR 8236N ITA NO.218/NAGPUR/2009 ASSESSMENT YEAR : 2006 - 07 ACIT CIRCLE - 1 NAGPUR VS. KU. SHRADDHA SANJAY RANKA NAGPUR (APPELLANT) (RESPONDENT) PAN NO.ADWPR 3362B APPELLANT BY: DR. MILIND BHUSARI, CIT(DR) RESPONDENT BY: SHRI K.P. DEWANI, ADVOCATE DATE OF HEARING: 09.10.2012 DATE OF PRONOUNCEMENT: 16.10.2012 ORDER PER P.K. BANSAL, ACCOUNTANT MEMBER: - THESE APPEALS HAVE BEEN FILED AGAINST THE TWO SEPARATE ORDERS OF THE CIT(A) BOTH DATED 7.7. 2009. IN THE CASES OF THE ASSESSES SANJAY ISHWARLAL RANKA & KUMARI SHRADDHA SANJAY RANKA. 2. SINCE THE ISSUE INVOLVED IN THESE APPEALS ARE COMMON, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO.216 &218 /NAG/2009 SANJAY ISHWARLAL RANKA, NAGPUR & KU. SHRADDHA SANJAY RANKA, NAGPUR 2 IT A NO.216/ NAG /200 9 BY REVENUE: 3 . IN THIS APPEAL, THE FOLLOWING EFFECTIVE GROUNDS HAVE BEEN TAKEN. 1. THE CIT(A) OUGHT TO HAVE GATHERED PARTICULARS EITHER THROUGH THE ASSESSING OFFICER BY REMAND REPORT OR OTHERWISE AND APPLIED CIRCULAR NO.4 OF 2007 BEFORE AD JUDICATING ON THE MATTER WITH REGARD TO SHARE TRANSACTIONS. 2. THE CIT(A) OUGHT TO HAVE NOTICED THAT ASSESSEE TRADED IN 351 NUMBER OF SCRIPS INVOLVING A HUGE TURNOVER OF RS.9,22,09,885/ - AND PURCHASES OF RS.8,37,27,757/ - AND ACCORDINGLY LOOKING AT SUCH HIGH VOLUME OF TRANSACTIONS UPHELD THE ORDER OF A.O. 3. THE CIT(A) ERRED IN HOLDING THAT THE A.O. GAVE A FINDING THAT THE TRANSACTIONS IN SHARES ARE IN THE NATURE OF ADVENTURE OR TRADE IGNORING THE FACT THAT THE AO MERELY TAXED THE IMPUGNED INCOME UNDER THE HEAD BUSINESS INCOME. 4. THE CIT(A) OUGHT TO HAVE APPLIED THE JUDGEMENT OF THE SPECIAL BENCH ITAT, MUMBAI IN THE CASE OF M/S. DAGA CAPITAL MANAGEMENT (P) LTD., VS. ITO IN RELATION TO TRANSACTION IN SHARES AND ACCORDINGLY, APPLIED SECTION 14A DISALLOWING THE EXPE NDITURE TOWARDS EXEMPTED DIVIDEND INCOME. 4 . WHILE DISPOSING OF THIS APPEAL, WE ARE TAKING THE BRIEF FACTS IN THE CASE OF SANJAY ISHWARLAL RANKA AS BOTH LD. A.R. & D.R. ALSO AGREED THAT THE FACTS INVOLVED IN BOTH THESE APPEALS ARE SIMILAR. SIMILAR GROUND S HAVE BEEN TAKEN EXCEPT CHANGE IN THE FIGURES IN GROUND NO.2 IN PLACE OF TURNOVER OF RS.9,22,09,885/ - TURNOVER OF RS.2,32,61,213/ - AND IN PLACE OF PURCHASE OF RS.8,37,27,757/ - PURCHASE OF RS.2,21,98,527/ - AND IN PLACE OF 351 NUMBER OF SCRIPS , 101 N UMBER O F SCRIPS HAS BEEN TAKEN. 5 . THE ASSESSEE SUBMITTED RETURN AT AN INCOME OF RS.1,31,04,560/ - WHICH HAS BEEN ASSESSED AT RS.1,35,13,632/ - . THE ASSESSEE HAS RETURNED LONG TERM/SHORT TERM CAPITAL GAIN ON SHARES AND MUTUAL FUNDS AS UNDER: ITA NO.216 &218 /NAG/2009 SANJAY ISHWARLAL RANKA, NAGPUR & KU. SHRADDHA SANJAY RANKA, NAGPUR 3 LONG TERM CAPITAL G AIN ON SHARES RS.4,09,074 [CLAIMED AS EXEMPT U/S 10(38)] SHORT TERM CAPITAL GAIN ON SHARES ON SHARES RS.82,77,578 ON MUTUAL FUNDS (EQUITY) RS. 14,457 ON MUTUAL FUNDS (DEBTS) RS . (2,775) RS. 82,89,260 TOTAL RS.86,98,334 6 . THE A SSESSING OFFICER TREATED THE WHOLE CAPITAL GAIN RETURNED BY THE ASSESSEE AS BUSINESS INCOME AND LE VIED NORMAL TAX AS AGAINST THE CONCESSIONAL TREATMENT ALLOWABLE TO SHORT TERM CAPITAL GAIN ON SALE OF SHARES AND MUTUAL FUND UNITS AND LONG TERM CAPITAL GAIN BEING TOTALLY EXEMPT. THE ASSESSING OFFICER OBSERVED THAT THE ABOVE INCOME IS BUSINESS INCOME ON THE GROUND THAT THE ASSESSEE HAS MADE SEVERAL TRANSACTIONS IN THE SECURITY MARKET WHICH INDICATE THAT THE ASSESSEE IS FULL - FLEDGED INVOLVED IN TRADING IN SHAR E MARKET. THEREFORE, THE INCOME SHOWN UNDER THE HEAD CAPITAL GAINS IS REQUIRED TO BE CONSIDERED AS BUSINESS INCOME. 7 . SIMILARLY, IN THE CASE OF KUMARI SHRADDHA RANKA, THE SAME FACTS WERE FOUND BY THE ASSESSING OFFICER STATING THAT IN OUR CASE ALSO THE I NCOME HAS BEEN TREATED AS BUSINESS INCOME. THUS THE ASSESSING OFFICER HELD INSTEAD OF LONG TERM CAPITAL GAINS, THE PROFIT FROM SALE OF SHARES AND INSTEAD OF SHORT TERM CAPITAL GAIN S , THE PROFIT FROM SALE OF SHARES AND WORKED OUT THE PROFIT ON SALE OF SHAR ES DURING THE YEAR. 8 . WHEN THE MATTER WENT BEFORE THE CIT(A), THE CIT(A) ACCEPTED THE ASSESSEE S CLAIM OF LONG TERM CAPITAL GAIN AT RS.4,09,074/ - AND SHORT TERM CAPITAL GAIN AT RS.82,89,260/ - , FOLLOWING THE DECISION OF NAGPUR BENCH OF THE ITAT IN THE CAS E OF DINESH B HAI C. PATEL (HUF) NAGPUR, ASSESSMENT YEAR 2005 - 06 DATED 5.6.2009 IN ITA NO.616/NAGPUR/2008 AND ALSO THE CASE OF MUMBAI BENCH OF THE ITAT IN THE CASE OF ITA NO.216 &218 /NAG/2009 SANJAY ISHWARLAL RANKA, NAGPUR & KU. SHRADDHA SANJAY RANKA, NAGPUR 4 GOPAL PUROHIT VS. JCIT 20 DTR (MUM) (TRIB.) 99 (ORDER DT. 10.2.2009) BY OBSERVING AS UNDER: I HOLD THAT THE AO HAS BUILT HIS CASE ON A COMPLETELY WRONG PREMISE, I.E. ON THE BASIS OF PERIOD OF HOLDING, COMING TO A CONCLUSION THAT THE SHARES HELD FOR SHORT PERIOD OR FOR A FEW NUMBER OF DAYS WOULD NOT QUALIFY AS SHORT TERM CAPITAL GAIN. IT HAS A LREADY BEEN HELD THAT THERE ARE CERTAIN TRANSACTIONS WHICH QUALIFY AS TRADING TRANSACTIONS OR INVESTMENT PORTFOLIOS ON THE BASIS OF CERTAIN INHERENT CHARACTERISTICS. THE SCRIPS SOLD BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION ARE FROM HIS INVESTME NT PORTFOLIO AND ANY GAIN ARISING ON SUCH SALES HAS TO BE ACCEPTED AS SHORT TERM OR LONG TERM CAPITAL GAIN DEPENDING ON THE PERIOD OF HOLDING AS PRESCRIBED IN THE IT ACT, 1961, AND FOR ALL THE TRANSACTIONS OUT OF INVESTMENT PORTFOLIO, APPELLANT S CLAIM OF LONG TERM CAPITAL GAIN AT RS.4,09,074/ - AND SHORT TERM CAPITAL GAIN AT RS.82,89,260/ - IS ACCEPTED. 9 . THE LD. D.R. CONTENDED THAT IT IS APPARENT THAT THE NUMBER OF TRANSACTIONS INVOLVE D IN THIS CASE AND THE ASSESSEE HAS CONTINUOUSLY PURCHASED AND SOLD TH E SHARES. IT IS NOT A CASE WHERE HE HAS ENTERED INTO 2 OR 3 TRANSACTIONS. INTEN T ION IS A MATTER WHICH IS KNOWN TO THE ASSESSEE AND THE ONUS IS ON THE ASSESSEE TO PROVE THAT HE HAS THE INTENTION FOR INVESTMENT . RE FERRING TO THE DECISION OF THE MUMBAI HIGH COURT IN THE CASE OF CIT VS. GOPAL PUROHIT 228 CTR 582 , H E POINTED OUT THAT THE APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE TRIBUNAL IN THAT CASE WAS DISMISS ED NOT ON MERIT BUT AS HIGH COURT FOUND THAT NO SUBSTANTIAL POSITION OF LAW IS INVOLVED. 10 . THE LD. A.R. BEFORE US CONTENDED THAT IN THE CASE OF THE ASSESSEE IN THE ASSESSMENT YEAR 2005 - 06 ALSO , THE ASSESSEE HAD DERIVED THE PROFIT ON THE SALE OF THE SHARES AND THE SAID SURPLUS WAS TREATED AS CAPITAL GAIN AND DULY ACCEPTED BY THE REVENUE. FO R THIS , HE HAS DRAWN OUR ATTENTION TOWARDS PAGE 1 TO 4 OF THE PAPER BOOK. HE POINTED OUT THAT THE SHARES ARE HELD AS INVESTMENT AND THE UNITS OF MUTUAL FUNDS HAS DULY BEEN SHOWN AS INVESTMENT IN THE BALANCE SHEET IN THE EARLIER YEAR AS WELL AS DURING THE YEAR. THE INVESTMENT IN THE SHARES AND MUTUAL FUNDS IS OUT OF OWN CAPITAL AND NO BORROWING IS MADE BY THE ASSESSEE FOR INVESTMENT. FOR THIS , ATTENTION WAS DRAWN TOWARDS THE BALANCE SHEET OF THE ASSESSEE AVAILABLE AT PG.7. IT WAS POINTED OUT THAT THE ASS ESSEE HAS DERIVED DIVIDEND INCOME AS UNDER: ITA NO.216 &218 /NAG/2009 SANJAY ISHWARLAL RANKA, NAGPUR & KU. SHRADDHA SANJAY RANKA, NAGPUR 5 1 1 . THERE IS NO EVIDENCE ON RECORD THAT THE ASSESSEE IS A DEALER IN SHARES. MANY SHARES SOLD DURING THE YE AR RELATE TO THE SHARES ACQUIRED IN THE EARLIER YEAR AND SHOWN IN THE BALANCE SHEET AS INVESTMENT. THE ASSESSEE HAS DERIVED INCOME MAINLY FROM SALARY BEING THE EMPLOYEE OF M/S. RAN CHEMICALS PVT. LTD. HE CANNOT DEVOTE THE TIME FOR CARRYING OUT THE REGULA R BUSINESS. NO OFFICE OR ADMINISTRATIVE SET UP FOR CARRYING OUT PURCHASE AND SALE OF THE SHARES ACTIVITIES IS BEING RUN BY THE ASSESSEE. THE ONUS IS ON THE REVENUE TO SHOW THAT THE PURCHASE OF THE SHARES IS WITH A VIEW TO CARRY ON THE TRADE. THE ASSESSI NG OFFICER H AS NOT BROUGHT OUT ANY EVIDENCE ON RECORD TO SHOW THAT THE ASSESSEE IS HAVING TRADING ACTIVITY IN RESPECT OF SHARES. HE RELIED ON TH E DECISION OF CIT VS. V.A. TRIVEDI 172 ITR 95 (MUMBAI) FOR THE PROPOSITION OF THE LAW THAT THE ONUS OF ESTABLIS HING THAT A PURCHASE IS MADE WITH AN INTENTION TO TRADE IS ON THE REVENUE. RELIANCE WAS ALSO PLACED ON THE DECISION OF THE MUMBAI BENCH IN THE CASE OF GOPAL PUROHIT VS. JCIT 20 DTR 99 (MUMBAI). IT WAS POINTED OUT THAT THE APPEAL FILED BY THE REVENUE AGAI NST THIS DECISION IS DISMISSED BY THE HON BLE HIGH COURT. THE COPY OF THE ORDER OF THE HIGH COURT WAS PLACED AT PG.22 OF THE PAPER BOOK IN THE CASE OF CIT VS. GOPAL PUROHIT 228 CTR 582. IT WAS ALSO POINTED OUT THAT SPECIAL LEAVE PETITION FILED BEFORE THE SUPREME COURT WAS ALSO DISMISSED VIDE ORDER DATED 15.11.2010. RELIANCE WAS ALSO PLACED ON THE DECISION OF ACIT VS. DINESH B HAI C. PATEL (HUF) NAGPUR BENCH OF THIS TRIBUNAL ITA NO.616/2008, IT WAS POINTED OUT THAT THE APPEAL FILED AGAINST THE ORDER OF THE NAGPUR BENCH WAS DISMISSED IN THE HIGH COURT VIDE ORDER DATED 28.10.2010 IN ITA NO.37/2009. IT WAS AGAIN STRESSED THAT SIMILAR VIEW HAS COME BEFORE THE MUMBAI BENCH IN THE FOLLOWING CASES NAGINDAS P. S H ETH (HUF) VS. ACIT ITA NO.961/MUM/2010 AND ACIT VS. N AI SHADH V. VACHHARAJANI ITA 6429/MUM/2009. THUS , IT WAS CONTENDED THAT THE ORDER OF THE CIT(A) BE CONFIRMED. ASSESSMENT YEAR AMOUNT (RS.) 2005 - 06 35,54,752/ - 2006 - 07 18,07,028/ - 2007 - 08 66,52,110/ - ITA NO.216 &218 /NAG/2009 SANJAY ISHWARLAL RANKA, NAGPUR & KU. SHRADDHA SANJAY RANKA, NAGPUR 6 12. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS AND, PERUSED THE MATERIAL ON RECORD ALONG WITH THE ORDER OF THE TAX AUTHORITIES BELOW. WE HAVE ALSO GONE THROUGH THE CASE LAW AS HAS BEEN CITED BEFORE US. WE FIND THAT IN THE CASE OF CIT (CENTRAL), CALCUTTA VS ASSOCIATED INDUSTRIAL DEVELOPMENT COMPANY (P) LTD. (82 - ITR - 586) , THE HON'BLE SUPREME COURT HAS HELD AS UNDER: WHETHER A PARTICULAR HO LDING OF SHARES IS BY WAY OF INVESTMENT OR FORMS PART OF THE STOCK - IN - TRADE IS A MATTER WHICH IS WITHIN THE KNOWLEDGE OF THE ASSESSEE WHO HOLDS THE SHARES AND HE SHOULD, IN NORMAL CIRCUMSTANCES, BE IN A POSITION TO PRODUCE EVIDENCE FROM HIS RECORDS AS TO W HETHER HE HAS MAINTAINED ANY DISTINCTION BETWEEN THOSE SHARES WHICH ARE HIS STOCK - IN - TRADE AND THOSE WHICH ARE HELD BY WAY OF INVESTMENT . 12.1 IN THE CASE OF CIT, BOMBAY VS H HOLCK LARSEN (160 - ITR - 67) , THE HON'BLE SUPREME COURT HAS HELD AS UNDER: IN OR DER TO DETERMINE WHETHER ONE WAS A DEALER IN SHARES OR AN INVESTOR, THE REAL QUESTION WAS NOT WHETHER THE TRANSACTION OF BUYING AND SELLING THE SHARES LACKS THE ELEMENT OF TRADING, BUT WHETHER THE LATER STAGES OF THE WHOLE OPERATION SHOW THAT THE FIRST STE P THE PURCHASE OF THE SHARES WAS NOT TAKEN AS, OR IN THE COURSE OF, A TRADING TRANSACTION. THE TOTALITY OF ALL THE FACTS WILL HAVE TO BE BORNE IN MIND AND THE CORRECT LEGAL PRINCIPLES APPLIED TO THESE. IF ALL THE RELEVANT FACTORS HAVE BEEN TAKEN INTO C ONSIDERATION AND THERE HAS BEEN NO MISAPPLICATION OF THE PRINCIPLES OF LAW, THEN THE CONCLUSION ARRIVED AT BY THE TRIBUNAL CANNOT BE INTERFERED WITH BECAUSE THE INFERENCE IS A QUESTION OF LAW, IF SUCH AN INFERENCE WAS A POSSIBLE ONE, SUBJECT, HOWEVER, THAT ALL THE RELEVANT FACTORS HAVE BEEN DULY WEIGHED AND CONSIDERED BY THE TRIBUNAL, THE INFERENCE REACHED BY THE TRIBUNAL SHOULD NOT BE INTERFERED WITH. 13. IN VIEW OF THE AFORESAID DECISIONS, WE ARE OF THE VIEW THAT WHETHER THE PROFIT FROM THE SHARES IS A CAPITAL GAIN OR BUSINESS INCOME WILL DEPEND ON THE FOLLOWING FACTORS: - WHETHER THE SHARES ARE HELD BY THE ASSESSEE AS INVESTMENTS OR STOCK - IN - TRADE; - WHETHER THE SHARES ARE PURCHASED WITH AN INTENTION TO KEEP THEM AS INVESTMENTS; - WHETHER THE SHARES PURCH ASED WITH AN INTENTION TO SELL; ITA NO.216 &218 /NAG/2009 SANJAY ISHWARLAL RANKA, NAGPUR & KU. SHRADDHA SANJAY RANKA, NAGPUR 7 - WHETHER THE SHARES WERE PURCHASED WITH AN INTENTION TO EARN THE PROFIT IN THE SHORT TERM; - WHETHER THE SHARES ARE HELD TO MAXIMIZE THE RETURN; - WHETHER THE SHARES HAVE BEEN PURCHASED FROM THE PRIMARY MARKET; - WHETHER THE SH ARES HAVE BEEN PURCHASED FROM THE SECONDARY MARKET; - WHETHER THE SHARES HAVE BEEN PURCHASED BY SUBSCRIPTION TO PUBLIC ISSUE; - WHETHER THE SHARES HAVE BEEN HELD FOR FAIRLY LONG PERIOD; AND - WHETHER THE SHARES ONCE SOLD HAVE NEVER BEEN RE - PURCHASED. 14. WE NOTED THAT IN THE CASE OF CIT VS. V A TRIVEDI 172 ITR 95 (BOM) HON BLE JURISDICTION HIGH COURT HAS CLEARLY LAID DOWN UNDER PARA 12 OF THE ORDER THAT THE ONUS OF ESTABLISHING THAT A PURCHASE IS MADE WITH THE INTENTION TO TRADE IS ON THE REVENUE. 15. WE NO TED THAT THE MAIN CONTENTION OF THE REVENUE IN TR EATING THE GAIN TO BE THE INCOME FROM BUSINESS IS THE NUMBER OF TRANSACTIONS AND THE PERIOD OF THE HOLDING BY THE ASSESSEE. THE PERIOD OF THE HOLDING AND NUMBER OF TRANSACTIONS CANNOT BE THE ONLY BASIS TO D ETERMINE WHETHER THE ASSESSEE HAS CARRIED OUT THE BUSINESS IN SHARE TRANSACTIONS. IT MAY BE ONE OF THE RELEVANT CONSIDERATION BUT CANNOT BE THE MAIN CONSIDERATION FOR DECIDING WHETHER THE ASSESSEE IS ENGAGED IN A BUSINESS OR NOT. WE HAVE TO LOOK INTO ALL THE SURROUNDING CIRCUMSTANCES. THIS IS A FACT ON RECORD THAT THE ASSESSEE IN THIS CASE IS ENGAGED IN THE EMPLOYMENT AND HAS DERIVED THE SALARY INCOME . O UT OF THE SURPLUS FUND , H E INVESTED INTO THE SHARES AND THE UNITS AND THOSE SHARES AND UNITS HAS DULY BEEN SHOWN BY THE ASSESSEE AS INVESTMENT IN HIS BALANCE SHEET IN THE EARLIER YEAR AS WELL AS DURING THE YEAR. IN THE EARLIER YEAR ALSO, THE ASSESSEE DERIVED THE INCOME ON THE SALE OF THE SHARES, WHICH HAS BEEN RETURNED BY THE ASSESSEE AS CAPITAL GAIN AND REVENUE HAS DULY ACCEPTED THE SAME. THE ASSESSEE WAS NOT HOLDING THE SHARES OR THE UNITS AS A STOCK IN TRADE. THIS FACT IS ALSO NOT DENIED BY THE REVENUE. THE PERIOD OF HOLDING ITSELF HAS BEEN ITA NO.216 &218 /NAG/2009 SANJAY ISHWARLAL RANKA, NAGPUR & KU. SHRADDHA SANJAY RANKA, NAGPUR 8 TREATED BY THE LEGISLATURE TO BE A RELEVANT CONSIDERATION FO R DETERMINING WHETHER THE CAPITAL GAIN DERIVED IS A LONG TERM CAPITAL GAIN OR A SHORT TERM CAPITAL GAIN. THERE IS NO PROVISION UNDER THE INCOME - TAX ACT WHICH H AS PROVIDED THAT IN CASE THE ASSESSEE IS HOLDING THE SHARES FOR A LESSER PERIOD THAN THE ONE PRE SCRIBED, IT WILL BE REGARDED TO BE THE BUSINESS INCOME. DIVIDING THE CAPITAL GAIN INTO TWO PARTS I.E. THE SHORT TERM GAIN OR THE LONG TERM GAIN ITSELF PROVE THAT THE PERIOD OF THE HOLDING CANNOT BE THE CRITERIA FOR DETERMINING WHETHER THE PROFIT DERIVED B Y THE ASSESSEE IS A LONG TERM CAPITAL GAIN OR SHORT TERM CAPITAL GAIN. 16. THE CIT(A), WE NOTED IN THIS CASE WHILE ALLOWING THE APPEAL OF THE ASSESSEE HAS RELIED ON THE DECISION OF THE ITAT NAGPUR BENCH IN THE CASE OF DINESHBHAI C. PAT EL (HUF) IN ITA NO .616/2008 , WHICH CONFIRMED THE DECISION OF THE CIT(A), THE COPY OF THE DECISION WAS FILED BEFORE US. THE APPEAL AGAINST THE DECISION OF THE NAGPUR BENCH IN THE CASE OF DINESHBHAI C. PATIL (SUPRA) HAS BEEN DISMISSED BY THE HIGH COURT VIDE ORDER DATED 28.10 .2010 HOLDING THAT NO SUBSTANTIAL POSITION ARISE AND THE TRIBUNAL , ON THE BASIS OF THE MATERIAL ON RECORD , HOLD THAT THE SHARES WERE PURCHASED BY THE ASSESSEE AS INVESTMENT AND THE GAIN ARISING ON SALE OF THOSE SHARES WERE ALLOWABLE TO BE TAXED AS CAPITAL GAIN. IT IS NOT DENIED THAT IN THIS CASE ALSO , THE ASSESSEE WAS HOLDING THE SHARES AS INVESTMENT. HOLDING OF THE SHARES AS INVESTMENT ITSELF PROVE THE INTENTION OF THE ASSESSEE AS REGARDS TO THE NATURE OF THE TRANSACTION. HAD THE SHARES BEEN THE BUSINES S ASSETS, IT WOULD HAVE SHOWN BY THE ASSESSEE AS A STOCK IN TRADE. APPARENT IS REAL , IF THE REVENUE FEELS THAT THE INTENTION OF THE ASSESSEE WAS NOT TO HOLD THE SHARES AS INVESTMENT. THE ONUS IN OUR OPINION IS ON THE REVENUE TO PROVE THAT APPARENT IS NOT REAL. NO EVIDENCE WAS BEING PLACED OR BROUGHT TO OUR KNOWLEDGE BY THE LD. D.R. WHICH MAY PROVE THAT THE INTENTION OF THE ASSESSEE WAS NOT TO HOLD THE SHARES AS INVESTMENT. IT IS ALSO A FACT THAT THE ASSESSEE DERIVED THE DIVIDEND INCOME AND HAS ALSO MADE THE INVESTMENT IN THE SHARES NOT OUT OF THE BORROWED FUNDS, BUT OUT OF ITS OWN SURPLUS FUNDS. THE CIT(A) WHILE ALLOWING THE APPEAL OF THE ASSESSEE HAS EXTENSIVELY DEALT WITH THE VARIOUS FACTORS AS WELL AS VARIOUS CASE LAWS TO ARRIVE AT A FINDING THAT THE SHARES WERE HELD BY THE ASSESSEE AS A CAPITAL INVESTMENT AND NOT AS STOCK IN TRADE. HE HAS ALSO RELIED ON THE DECISION OF THIS TRIBUNAL IN THE CASE OF CIT VS. DINESHBHAI C. PATEL (SUPRA). ITA NO.216 &218 /NAG/2009 SANJAY ISHWARLAL RANKA, NAGPUR & KU. SHRADDHA SANJAY RANKA, NAGPUR 9 IT IS NOT DENIED THAT THE FACTS INVOLVED IN THIS CASE IN THE CAS E OF DINESHBHAI C. PATEL (SUPRA) ARE SIMILAR TO THE FACTS IN THE CASE OF THE ASSESSEE. SIMILARLY, THE FACTS INVOLVED IN THE CASE OF GOPAL PUROHIT VS. JCIT 20 DTR 99 (MUMBAI) WERE ALSO THE SAME AS IN THE CASE OF THE ASSESSEE. IN ALL THOSE CASES, THE TRIBU NAL TOOK THE VIEW THAT PERIOD OF HOLDING CANNOT BE THE BASIS TO DETERMINE WHETHER THE SHARE TRANSACTION ENTERED INTO BY THE ASSESSEE IS A BUSINESS INCOME OR CAPITAL GAIN. IN THIS CASE ALSO, WE NOTED THAT THE ASSESSING OFFICER HAS BUILT UP HIS CASE MAINLY ON THE BASIS OF PERIOD OF HOLDING AND ON THAT BASIS, HE TOOK THE VIEW THAT THE SHARES HELD FOR A SHORT PERIOD OR FOR A NUMBER OF DAYS WOULD NOT BE CAPITAL GAIN. IN OUR OPINION, NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE CIT(A). THE CIT(A) HAS RIGH TLY TAKEN THE VIEW THAT THE DECISION OF THIS TRIBUNAL IN ITA NO.616/2008 IN THE CASE OF ACIT VS. DINESHBHAI C. PATEL (HUF) IS CLEARLY APPLICABLE IN THE CASE OF THE ASSESSEE. THE DECISION OF THE COORDINATE BENCH WHICH HAS BEEN APPROVED BY THE HON BLE JURIS DICTIONAL HIGH COURT IS BINDING ON US. WE CANNOT TAKE A DIFFERENT VIEW. WE NOTED THAT THE NAGPUR BENCH OF THIS TRIBUNAL IN THE CASE OF DINESHBHAI C. PATEL (SUPRA) HAS FOLLOWED THE DECISION OF GOPAL PUROHIT VS. JCIT (SUPRA), THAT DECISION HAS ALSO BEEN AP PROVED BY THE HON BLE JURISDICTIONAL HIGH COURT AND SLP AGAINST THAT DECISION HAS BEEN DISMISSED BY THE SUPREME COURT. WE ACCORDINGLY, CONFIRM THE ORDER OF THE CIT(A) AND DISMISS BOTH THE APPEALS. 17. IN THE RESULT, THE APPEALS FILED BY THE REVENUE STAND S DISMISSED. PRONOUNCED IN THE OPEN COURT ON 16.10 .20 1 2 SD/ - SD/ - ( D.T. GARASIA ) (P.K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER VG/SPS NAGPUR DATED 16 TH OCTOBER , 20 1 2 ITA NO.216 &218 /NAG/2009 SANJAY ISHWARLAL RANKA, NAGPUR & KU. SHRADDHA SANJAY RANKA, NAGPUR 10 COPY TO 1 SHRI SANJAY ISHWARILAL RANKA, RANKA BHAWAN, 110, DHANTOLI, NAGPUR 2 KU. SHRADDHA SANJAY RANKA, RANKA BHAWAN, 110, DHANTOLI, NAGPUR 3 THE ACIT, CIRCLE - 1, NAGPUR 4 THE CIT (A) , NAGPUR 5 THE DR, ITAT, NAGPUR 6 GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL NAGPUR