Shri Ganeshmal Bothra, Surat V. The Income tax Officer,Ward-2(2), Surat

ITA 229/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0293 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 8 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-10-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 19-07-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 24-01-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: O P MEENA
• Assessee Lawyers: S K KABRA
• Keywords: Business income

Judgement Text

I.T.A. NO . 2 29 /AHD/201 3 A SSESSMENT Y EAR: 200 8 - 09 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH, SMC , AHMEDABAD [CORAM: PRAMOD KUMAR AM] I.T.A. NO. 229 /A HD/ 20 1 3 ASSESSMENT Y EAR : 200 8 - 09 GANESH MAL BOTHRA , .... . ...... . ... . APPELLANT 641, AJANTA SHOPPING CENTRE, RING ROAD, SURAT. [ PAN: A A MPB 8600 K ] VS. INCOME TAX OFFICER, WARD 2 ( 2 ), SURAT. ... ............ . RESPONDENT APPEARANCES BY: S.K. KABRA , FOR THE APPELLANT O.P. MEENA , FOR THE RESPONDENT D ATE OF CONCLUDING THE HEARING : 19 .0 7 .2016 DATE OF PRONOUNCING THE ORDER : 18 .10.2016 O R D E R 1. THIS APPEAL, FILED BY THE ASSESSEE, CHALLENGES CORRECTNESS OF THE ORDER DATED 3 RD AUGUST, 201 2, PASSED BY THE LEARNED CIT(A), FOR THE ASSESSMENT YEAR 200 8 - 09 . 2. GRIEVANCES A S RAISE D BY THE ASSESS E E ARE AS FOLLOWS : - 1. AS REG A RDS CONSIDERING STCG AS BUSINESS INCOME (RS.4,47,661/ - ). 1.1 THE LD . CIT ( A ) WA S NO T JUST AND PROPER ON THE FACTS OF THE C A SE A N D IN LAW IN CONFIRMING THE ACTION OF THE LD . ASSES S ING OFFICER IN TRE A TING THE S TCG A S BUSINESS INCOME IN DISREGARD TO THE SUBMISSION MADE BY THE APPELLANT. 2. AS REGARDS CONSIDERING LTCG A S B USINESS INCOME (RS.18,55,073/ - ). 2.1 THE LD . CIT(A) WAS NOT JUST AND PROPER ON THE FACTS OF THE CASE AND IN LAW IN CONFIRMING THE ACTION OF TH E LD . ASSESSING OFFICER IN TREATING THE LTCG AS BUSINESS INCOME IN DISREGARD T O THE SUBMISSION MADE BY THE APPELLANT . I.T.A. NO . 2 29 /AHD/201 3 A SSESSMENT Y EAR: 200 8 - 09 PAGE 2 OF 4 3. BRIEFLY STATED, THE RELEVANT MATERIAL FACTS , AS NECESSARY FOR ADJUDICATION ON THIS APPEAL , ARE LIKE THIS. DURING THE COURSE OF ASSE SSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE H A S DISCLOSED SHOR T TERM CAPITAL GAINS, ON SALE OF SHARES, AT RS.4,47,661/ - AND LONG T ERM CAPITAL GAIN , ON SALE OF SHARES, AT RS.18,55,073/ - . HOWEVER , THE ASSESSING OFFICER WAS OF THE VI EW, PARTICULARLY LOOKING TO THE FREQUENCY AND MAGNITUDE OF TRANSACTION AND HOLDING PERIOD OF SHARES, THAT THE ASSESSEE IS ENGAGED IN SHARE TRADING AND THE GAINS, THEREFORE SHOULD BE TREATED A S BUSINESS PROFITS. AGGRIEVED, ASSESSEE CARRIED THE MAT T ER IN AP PEAL BEFORE THE LEARNED CIT(A) BUT WITHOUT ANY SUCCESS. NOT SATISFIED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE ME. 4. I HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF APPLICABLE LEG AL POSITION. 5. I FIND THAT SO FAR AS LONG TERM CAPI TA L GAINS SHARES ARE CONCERNED, THE HOLDING PERIODS IS AROUND 1000 DAYS, AND THAT, IN A NY EVENT, THE ISSUE IS NOW COVERED, IN F A VOUR OF THE ASSESSEE, BY THE C IRCULAR NO.6/2016 DATED 29 TH FEBRUARY, 2016 W HICH, INTER ALIA, PROVIDES AS FOLLOWS : - IN RESPECT OF LISTED SHARES AND SECURITIES HELD FOR A PERIOD OF MORE THAN 12 MONTHS IMMEDIATELY PRECEDING THE DATE OF ITS TRANSFER, IF THE ASSESSEE DESIRES TO TREAT THE INCOME ARISING FROM THE TRANSFER THEREOF AS CAPITAL GAIN, THE SAME SHALL NOT BE PUT TO DISPUTE BY THE ASSESSING OFFICER. HOWEVER, THIS STAND, ONCE TAKEN BY THE ASSESSEE IN A PARTICULAR ASSESSMENT YEAR, SHALL REMAIN APPLICABLE IN SUBSEQUENT ASSESSMENT YEARS ALSO AND THE TAXPAYERS SHALL NOT BE ALLOWED TO ADOPT A DIFFERENT/CONTRARY STAND IN THIS REGARD IN SUBSEQUENT YEARS 6. UN DOUBTEDLY, THIS IS A RATHER RECENT CIRCULAR ISSUED MUCH AFTER THE ASSESSMENT WAS COMPLETED, BUT I SEE NO REASONS AS TO WHY SHOULD THIS NOT BE APPLIED TO THE CASE BEFORE ME AS WE LL. GOING BY THE TEST L A ID DOWN IN THIS CIRCULAR, THE CLAIM OF THE A SSESSEE, FOR TREATING GAINS ON SALE OF THESE SHARES, WHICH WERE HELD FOR MORE THAN 12 I.T.A. NO . 2 29 /AHD/201 3 A SSESSMENT Y EAR: 200 8 - 09 PAGE 3 OF 4 MONTHS, IS INDEED REQUIRED TO BE TREATED AS LONG TERM CAPITAL GAINS. I, ACCORDINGLY, UPHOLD THE PLEA OF THE ASSESSEE AND DIRECT THE ASSESSING OFFICER TO GRANT THE RELIEF IN THIS ISSUE. 7. COMING TO THE SHORT TERM CAPITAL GAINS OF RS.4,47,661/ - , I FIND THAT BARRING SIX INSTANCE S , AS PER STATEMENT IN PAGES 17 TO 23 OF THE PAPER BOOK WHICH SHOW HOLDING PERIOD AT 45, 39, 34, 40, 12 AND 14 DAYS, THE HOLDING PERIOD OF SCRIP IS WELL ABOVE 45 DAYS AND MOSTLY O V ER 125 DAYS. 8. IN THIS VIEW OF THE MATTER, AND HAVING REGARD TO THE FACT THAT THE ASSESSEE HAS BEEN A REGULAR INVESTOR , THE OTHER SHARES, HELD OVER 45 DAYS AT LEAST, THE GAINS SHOULD INDEED BE TREATED AS CAPITAL GAINS RATHER THAN BUSINESS PROFITS. 9. AS THE ASSESSEE HAS NOT PRESSED THE GRIEVANCE WITH RESPECT TO SALE OF THE FOLLOWING SHARES, TO THAT EXTENT, T HE ACTION OF THE A SSESSING OFFICER MUST BE HELD. THIS COMPUTATION IS A S FOLLOWS : - 03.08.2007 45 DAYS 2,001.78 02.11.2007 39 DAYS 1,440.75 09.11.2007 34 DAYS 2,420.82 17.08.2007 40 DAYS 1,426.98 17.08.2007 12 DAYS 1,437.23 19.12.2007 14 DAYS 2,060.19 10,787.75 10. IN VIEW OF THE ABOVE, EX CEPT FOR THE ABOVE AMOUNT OF RS.10,787.75 WHICH IS HELD TO BE BUSINESS PROFIT, THE BALANCE MOUNT OF RS.4,36,873/ - IS INDEED REQUIRED T O BE HELD A S SHORT TERM CAPITAL GAIN. I.T.A. NO . 2 29 /AHD/201 3 A SSESSMENT Y EAR: 200 8 - 09 PAGE 4 OF 4 11. ACCORDINGLY, GRIEVANCE AGAINST SHORT TERM CAPITAL GAIN, ON SALE OF SHARES, BEIN G TREATED AS BUSINESS PROFITS I S PARTLY ALLOWED. 12. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. P RONOUNCED IN THE OPEN COURT TODAY ON 18 TH DAY OF OCTOBER , 2016. SD/ - PRAMOD KUMAR (ACCOUNTANT MEMBER) DATED: THE 18 TH DAY OF OCTOBER , 2016. PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD