Shri Nirmal Kumar Patodi, Indore V. The ACIT Circle 5(1), Indore

ITA 264/IND/2013

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6037 (ITAT-INDORE)
• Duration Of Justice: 4 year(s) 11 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 06-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V J BORICHA
• Keywords: Business income
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE , , BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER . . /. I.T.A. NO.264/IND/2013 [[ / ASSESSMENT YEAR : 2008 - 09 SHRI NIRMAL KUMAR PATODI, 45, VIDHYA NILAY, SHANTI NIKETAN, INDORE. VS. ACIT, CIRCLE 5(1), INDORE. / APPELLANT / RESPONDENT . . ./ PAN: AGPPP3243B / APPELLANT BY : SHRI PRAKASH JAIN, C. A. / RESPONDENT BY : SHRI V.J. BORICHA, SR. DR / DATE OF HEARING : 01.05.2018. / DATE OF PRONOUNCEMENT : 03 .05.2018 / O R D E R PER KUL BHARAT, J.M. : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A) - II, INDORE, DATED 21.12.2012, PERTAINING TO ASSESSMENT YEAR 2008 - 09. - : 2 : - 2 . THE ASSESSEE HAS RAISED THE FOLLOWING THE GROUNDS OF APPEAL : - 1 . THAT THE HON'BLE CIT(A) - 2 HAS ERRED IN UPHOLDING THE DECISION OF AO IN TREATING THE SHORT TERM CAPITAL GAIN AS BUSINESS INCOME IN SPITE OF THE FACTS ASSESSEE HAS EARNED SHORT TERM CAPITAL GAIN. 2 . THAT NO PROPER AND REASONABLE OPPORTUNITY WAS GIVEN TO THE APPELLANT TO PROVE HIS CASE AND LEAD EVIDENCE IN SUPPORT OF HIS CLAIM. 3 . THE ONLY EFFECTIVE GROUND IN THIS APPEAL IS AGAINST TREATING THE SHORT TERM CAPITAL GAIN AS BUSINESS INCOME. 4 . BRIEFLY STATED, FACTS ARE THAT THE ASSESSEE IS AN INDIVIDUAL, WHO FILED ITS RETURN OF INCOME DECLARING INCOME AT RS. 31,37,718/ - ON 17.07.2008. SUBSEQUENTLY, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT AND ASSESSMENT U/S 143(3) OF THE INCO ME - TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 06.12.2010. THE AO DISALLOWED THE CLAIM OF THE ASSESSEE IN RESPECT OF INVESTMENT IN SHARES AND TREATED THE SURPLUS ARISING OUT OF SALE OF SHARES AS THE BUSINESS INCOME OF THE ASSESSEE. THUS, THE AO COMPUTED TOTAL INCOME AT RS. 31,91,750/ - AGAINST THE INCOME OF RS. 31,37,718/ - DECLARED BY THE ASSESSEE. AGGRIEVED BY THIS, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO - : 3 : - AFTER CONSIDERING THE SUBMISSIONS PARTLY ALLO WED THE CLAIM, THEREBY CLAIM OF STT OF RS. 26,995/ - WAS ALLOWED AND REST OF THE ADDITIONS WERE UPHELD. 5 . LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CASE OF THE ASSESSEE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE AS THROUGH OUT THE ASSESSEE HAS BEEN D ECLARING SUCH INVESTMENT NOT TREATING THEM AS BUSINESS INCOME. HE SUBMITTED THAT IN ASSESSMENT YEAR 2006 - 07, THE TRIBUNAL HELD THE ASSESSEE AS INVESTOR. HE DREW OUR ATTENTION TO PAPER BOOK PAGE NOS. 13 TO 27. 6 . ON THE CONTRARY, THE LD. DR OPPOSED THE SUBM ISSIONS AND SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 7 . WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. THE TRIBUNAL IN I.T.A.NO. 486/IND/2015 IN ASSESSEES OWN CASE PERTAINING TO ASSESSMENT YEAR 2006 - 07 HAS HELD AS UNDER : - 15. THE FACTS IN THE INSTANT CASE ARE IDENTICAL TO THE ABOVE CASE. IT IS PERTINENT TO NOTE IN THE CASE OF SMT. INDIRA PATODI FOR A.Y. 2008 - 09 THE CIT (A) - II, INDORE [APPEAL NO. IT - 443/10 - 11ORDER DTD. 31.01.2004] HAS ON IDENTICAL FACTS AC CEPTED THE SHORT TERM CAPITAL GAINS SHOWN AT RS. - : 4 : - 36,17,409/ - BY THE ASSESSEE, WHICH WERE TREATED BY THE AO AS BUSINESS INCOME. SIMILARLY IN THE CASE OF SHRI NIRMAL KUMAR PATODI, HUF WHERE SHORT TERM CAPITAL GAINS OF RS. 54,27,425/ - WAS HELD TO BE BUSINESS INCOME WAS HELD BY THE LD. CIT (A) - II AS SHORT TERM CAPITAL GAINS [APPEAL NO. IT - 443/10 - 11] ORDER DTD. 31.01.2004. THIS ORDER OF CIT (A), WAS ALSO UPHELD BY ITAT, INDORE BENCH IN I. T. A. NO. 45/IND/ 2013 FOR THE ASSESSMENT YEAR 2008 - 09. IN THE CASE OF SM T. ARPITA SOGANI FOR A.Y.2008 - 09, THE SHORT TERM CAPITAL GAINS SHOWN BY THE ASSESSEE AT RS. 25,88,454/ - WHICH WAS TREATED AS BUSINESS INCOME BY THE AO, HOWEVER, THE LD. CIT (A) II , INDORE, VIDE HIS ORDER DTD. 31.01.2014 IN APPEAL NO. 259/10 - 11, ALLOWED THE APPEAL OF THE ASSESSEE BY HOLDING THAT SHORT TERM CAPITAL GAINS OF RS. 25,88,454/ - SHOULD BE TREATED AS SHORT TERM CAPITAL GAINS ONLY, BY FOLLOWING THE ORDER OF HONBLE TRIBUNAL INDORE BENCH, IN THE CASE OF SHRI NIRMAL KUMAR PATODI HUF IN I. T. A. NO. 45/IND/2013 FOR THE ASSESSMENT YEAR 2008 - 09. AND JAWAHAR LAL AGARWAL IN I. T. A. NO. 204 & 205/IND/2011 FOR THE ASSESSMENT YEAR 2006 - 07. - : 5 : - 16 . IN THE LIGHT OF ABOVE DISCUSSION, AND CONSIDERING THE VARIOUS CASE LAWS RELIED BY THE ASSESSEE AND RESPECTFULLY FOLLOW ING THE DECISION OF JURISDICTIONAL TRIBUNAL AS WELL AS JURISDICTIONAL HIGH COURT, AS CITED ABOVE JUDICIAL DECISIONS MORE PARTICULARLY SHRI SHANTILAL M JAIN VS. ACIT 12(3) MUMBAI IN I. T. A. NO. 2690/MUM/2010 (AY2006 - 07) DTD. 27.04.2011 (SUPRA), SHRI NIRMAL KUMAR PATODI HUF IN [I. T. A. NO. 45/IND/2013] FOR THE A.Y. 2008 - 09, AND JAWAHAR LAL AGARWAL, IN I. T. A. NO. 204 & 205/IND/2011 FOR THE ASSESSMENT YEAR 2006 - 07, W E ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE CANNOT BE TREATED AS TRADER IN SHARE AND S HOULD BE TREATED AS INVESTMENT. THEREFORE, WE SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE AO TO ACCEPT THE STCG AS DECLARED BY THE ASSESSEE. WE HOLD AND DIRECT ACCORDINGLY. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED. 17 . IN THE RESULT, T HE APPEAL OF THE ASSESSEE IS, ALLOWED. - : 6 : - 15 . THE FACTS ARE IDENTICAL . THE REVENUE HAS NOT POINTED OUT ANY CHANGE IN TO FACTS AND CIRCUMSTANCES. THEREFORE, TAKING A CONSISTENT VIEW, WE DIRECT THE AO TO TREAT THE TRANSACTION IN SHARES AS AN INVESTMENT OF THE ASSESSEE AND COMPUTE THE CAPITAL GAINS ACCORDINGLY IN RESPECT OF THE SURPLUS ARISING THEREFROM. 16 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 0 3 . 05.2018. S D / - ( ) (MANISH BORAD) ACCOUNTANT MEMBER S D / - ( ) (KUL BHARAT) JUDICIAL MEMBER INDORE; DATED : 0 3 /05/2018 CPU/SPS COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUARD FILE. BY ORDER PRIVATE SECRETARY/DDO, INDORE - : 7 : -