Smt. Neelam Shukla, Mumbai V. The DCIT.,Circle-6, Surat

ITA 2273/AHD/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1113 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 06-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ADITYA SHUKLA
• Keywords: Business income; Principle of natural justice; Question of law

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER ./ ././ ./ ITA NO. 2273/AHD/2013 / // / ASSESSMENT YEAR : 2008-09 SMT. NEELAM SHUKLA, C/O. SOMNA SHUKLA, TYPE III B, BUILDING NO.52/499, RCF COLONY, CHEMBUR, MUMBAI PAN : AUNPS 3417 Q VS DCIT, CIRCLE-6, SURAT / // / (APPELLANT) / // / (RESPONDENT) ASSESSEE BY : SMT. URVASHI SODHAN, AR REVENUE BY : SHRI ADITYA SHUKLA, SR DR / // / DATE OF HEARING : 12/07/2016 / // / DATE OF PRONOUNCEMENT: 14/07/2016 / // / O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-IV, SU RAT DATED 24.10.2011 FOR ASSESSMENT YEAR 2008-09. 2. THE EFFECTIVE GROUNDS RAISED IN THIS APPEAL ARE TO THE EFFECT THAT THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN :- I) PASSING THE IMPUGNED APPELLATE ORDER EX-PARTE, ALTHOUGH ASSESSEE HAD DULY INFORMED THE CHANGE IN ADDRESS. II) CONFIRMING THE ACTION OF ASSESSING OFFICER, TREATIN G THE INCOME FROM SALE OF SHARES AS BUSINESS INCOME; III) NOT FOLLOWING THE PRINCIPLES OF NATURAL JUSTICE. 3. LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT THE EX-PARTE ORDER HAS BEEN PASSED WITHOUT PROPER NOTICE TO THE ASSESSEE, HOLDI NG THAT THE ASSESSEE HAS LEFT THE PREMISES. THE FACT OF MATTER IS CHANGE IN ADDRESS WHICH WAS DULY INTIMATED TO THE IT DEPTT. THE LD. COUNSEL FOR TH E ASSESSEE FURTHER CONTENDS THAT THE ASSESSEE IS A LADY WHO INVESTS IN SHARES A ND IN ALL EARLIER YEARS THE INCOME FROM SALE OF SHARES HAS BEEN HELD AS INVESTM ENT AND NOT BUSINESS SMC-ITA NO. 2273/AHD/2013 SMT. NEELAM SHUKLA VS. DCIT AY : 2008-09 2 INCOME. THE ASSESSEE NEVER DOES ANY BUSINESS NOR I NTO ADVENTURE IN THE NATURE OF TRADE. THE ISSUE IN QUESTION IS COVERED BY ITATS ORDER IN ASSESSEES OWN CASE FOR AY 2005-06 AND 2006-07 IN I TA NOS.2974/AHD/2008 AND 132/AHD/2010 RESPECTIVELY. THE RELEVANT OBSERV ATIONS ARE AS UNDER:- 10. FOR THE AFORESAID REASONS, WE ARE OF THE CONSI DERED OPINION THAT THE INCOME EARNED BY THE ASSESSEE FROM TRADING IN THE S HARES UNDER THE HEAD LONG TERM CAPITAL GAIN / SHORT TERM CAPITAL GAIN WAS COR RECTLY SHOWN. WE DO NOT FIND THAT IN THE ASSESSMENT YEAR 2005-2006 AND 2006 -2007, THE TRANSACTION OF SALE OF SHARES AND VOLUME WERE SUBSTANTIAL. WE D O NOT FIND ANY ERROR OR IRREGULARITY IN THE IMPUGNED ORDER PASSED BY THE TR IBUNAL. THE SUBSTANTIAL QUESTION OF LAW FRAMED BY THIS COURT AS MENTIONED A BOVE IS ANSWERED IN THE AFFIRMATIVE AND AGAINST THE REVENUE. BOTH THESE TAX APPEALS ARE ACCORDINGLY DISMISSED. 12. FROM GOING THROUGH THE DECISIONS OF HON. JURISDI CTIONAL HIGH COURT AND CO-ORDINATE BENCH AS REFERRED ABOVE IN PARA 9 & 10 AND THE CBDT CIRCULAR DATED 29/2/2016 BEARING NO. 6/2016 WE FIND THAT THE ASSESSEE HAS NOT OPTED TO TREAT ITS HOLDING OF LISTED SHARES AND SECURITIES A S STOCK IN TRADE AND NOR ANY INCOME ARISING FROM TRANSFER OF SUCH SHARES/SECURIT IES HAS BEEN TREATED AS ITS BUSINESS INCOME RATHER ASSESSEE HAS BEEN DISCLOSING INCOME FROM SALE/PURCHASE OF SHARES AS LONG TERM AND SHORT TERM CAPITAL GAIN CONSISTENTLY IN ITS INCOME TAX RETURN AND ALSO RELYING ON THE DE CISION OF HON. JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. VAI BHAV J. SHAH HUF (SUPRA) AND THAT OF CO-ORDINATE BENCH ITAT, MUMBAI IN THE CASE OF DEV ASHOK KARVAT VS. DCIT (SUPRA), WE ARE OF THE VIEW TH AT LD. ASSESSING OFFICER WAS NOT CORRECT IN TREATING THE INCOME FROM CAPITAL GAINS AS BUSINESS INCOME. FURTHER NOTHING HAS BEEN DOUBTED IN REGARD TO THE G ENUINENESS OF THE TRANSACTIONS OF PURCHASE/SALE OF SHARES ENTERED INT O BY THE ASSESSEE DURING THE YEAR AS WELL AS IN THE FOLLOWING YEARS WHEREIN CLAI M OF LONG TERM CAPITAL GAINS AND SHORT TERM CAPITAL GAIN HAS BEEN ACCEPTED BY THE ASSESSING OFFICER AS FILED IN THE RETURN OF INCOME BY THE ASSESSEE. I N THESE CIRCUMSTANCES AND IN VIEW OF ABOVE JUDICIAL PRONOUNCEMENTS AND BOARD CIR CULAR, WE ARE OF THE VIEW THAT INCOME OF THE ASSESSEE SHOWN FROM SHORT T ERM CAPITAL GAIN FROM SALE OF SHARES SHOULD NOT BE TREATED AS BUSINESS INCOME. WE HOLD SO. THE APPEAL OF ASSESSEE IS ALLOWED. SINCE THE ISSUE IN QUESTION IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY ASSESSEES OWN CASE (SUPRA), THE ADDITI ON MAY BE DELETED. 4. THE LD. DR RELIED ON THE ORDERS OF THE AUTHORITI ES BELOW. SMC-ITA NO. 2273/AHD/2013 SMT. NEELAM SHUKLA VS. DCIT AY : 2008-09 3 5. I HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE LOWER AUT HORITIES. I FIND MERIT IN THE CONTENTIONS OF THE LD. COUNSEL FOR THE ASSESSEE THAT IN ALL THE PRECEDING YEARS THE ASSESSEE HAS BEEN HELD TO BE HOLDING THE SHARES AS INVESTMENT AND NOT CARRYING ON ANY BUSINESS AND THE SAME PORTFOLIO CONTINUES IN THIS YEAR. CONSEQUENTLY, THERE IS NO REASON TO MAKE AN INFEREN CE THAT THE ASSESSEE IS INTO BUSINESS OF SHARES MERELY BECAUSE THE LD. CIT( A) MISTAKENLY HELD THAT ASSESSEE HAS NOT APPEARED AND THERE IS NO MATERIAL ON RECORD. IN MY CONSIDERED VIEW, THE ITAT IN TWO ASSESSMENT YEARS I .E. AYS 2005-06 AND 2006-07 AND DEPARTMENT ITSELF IN AY 2007-08 HAVE HE LD THAT THE ASSESSEES HOLDING OF SHARES IS BY WAY OF INVESTMENT AND THE S ALE PROCEEDS ARE LIABLE TO BE TREATED UNDER THE HEAD CAPITAL GAIN AND NOT BU SINESS INCOME. IN VIEW THEREOF, I REVERSE THE ORDERS OF THE LOWER AUTHORIT IES. THUS, ASSESSEES APPEAL IS ALLOWED. 6. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH JULY, 2016 AT AHMEDABAD. SD/- R.P. TOLANI (JUDICIAL MEMBER) AHMEDABAD; DATED 14/07/2016 *BIJU T. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE. / BY ORDER, TRUE COPY / // / ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD