KARISHMA V SHAH, MUMBAI V. ADDL CIT RG 16(1), MUMBAI

ITA 2735/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1030 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 29-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PITAMBAR DAS
• Keywords: Business income; Futures and options; Speculative transactions; Capital Gains
• Section: 143(3); 143(1); 195; 191; 192; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, A, MUMBAI BEFORE SHRI R V EASWAR, PRESIDENT AND SHRI B RAMAKOTAIAH, ACCOUNTANT MEMBER I T A NO: 2735/MUM/2009 (ASSESSMENT YEAR: 2005-06) MS KARISHMA V SHAH, MUMBAI APPELLANT (PAN: AAOPS6115L) VS ADDITIONAL COMMISSIONER OF INCOME TAX RESPONDEN T RANGE 16(1), MUMBAI APPELLANT BY: SHRI PARESH SHAPARIA RESPONDENT BY: SHRI PITAMBAR DAS O R D E R R V EASWAR, PRESIDENT: THIS IS AN APPEAL BY THE ASSESSEE PERTAINING TO TH E ASSESSMENT YEAR 2005-06. THE ASSESSEE IS AN INDIVI DUAL. SHE IS A WORKING PARTNER IN A PARTNERSHIP FIRM BY NAME M/S Z EN CLOTHING COMPANY WHICH IS ENGAGED IN THE MANUFACTURE AND EXP ORT OF GARMENTS, GARMENT PANELS AND ACCESSORIES. SHE IS A LSO A DIRECTOR OF CHANAKYA INTERNATIONAL PVT. LTD. WHICH IS ALSO E NGAGED IN A SIMILAR BUSINESS. 2. THE ASSESSEE FILED A RETURN OF INCOME DECLARING TOTAL INCOME OF RS.4,53,68,420/-. AFTER PROCESSING THE RETURN U NDER SECTION 143(1) OF THE INCOME TAX ACT, 1961, IT WAS SELECTED FOR SCRUTINY. IN THE COURSE OF THE ASSESSMENT PROCEEDINGS THE ASSESS ING OFFICER NOTED THAT THE ASSESSEE HAD SHOWN SHORT TERM AND LO NG TERM CAPITAL GAINS FROM SALE OF SHARES. THE SHORT TERM CAPITAL GAINS AMOUNTED TO RS.2,25,47,992/- AND THE LONG TERM CAPITAL GAINS AMOUNTED TO RS.2,26,60,995/-. THE AO WAS PRIMA FACIE OF THE VI EW THAT THE SHORT ITA NO: 2735/MUM/2009 2 TERM CAPITAL GAINS DECLARED IN THE RETURN SHOULD BE ASSESSED AS INCOME FROM THE BUSINESS IN SHARES AND ACCORDINGLY CALLED UPON THE ASSESSEE TO EXPLAIN WHY IT SHOULD NOT BE SO ASSESSE D. THE ASSESSEE EXPLAINED HER RETURN AND CONTENDED THAT (A) SHE WAS ONLY AN INVESTOR AND DID NOT CARRY ON ANY BUSINESS IN SHARES; (B) THE DETAILS OF THE SHARE TRANSACTIONS WOULD MAKE IT CLE AR THAT THEY WERE HELD AS INVESTMENTS; (C) THE ASSESSEE DID NOT BORRO W ANY MONEY FOR THE PURPOSE OF INVESTING IN SHARES; (D) THE ASSESSE E DID NOT HAVE THE NECESSARY EXPERIENCE AND EXPERTISE IN INVESTMEN T IN SHARES AND ENGAGED THE SERVICES OF PORTFOLIO MANAGEMENT SE RVICE PROVIDERS; (E) THE ASSESSEE EARNED DIVIDENDS OUT OF THE INVESTMENTS, MOST OF WHICH WERE HELD FOR MORE THAN ONE YEAR. IT WAS THUS CONTENDED THAT THE SHARES WERE HELD AS INV ESTMENT AND THEIR SALE GAVE RISE ONLY TO SHORT TERM CAPITAL GAI NS. 3. THE AO WAS NOT CONVINCED BY THE ASSESSEES EXPLA NATION AND HE NOTICED THE FOLLOWING FEATURES OF THE CASE: - (A) THERE WERE FREQUENT TRANSACTIONS IN SHARES INCL UDING SPECULATIVE TRANSACTIONS. THERE WERE 138 PURCHASES AND 107 SALES. (B) THE ASSESSEE HAS ON AN AVERAGE MADE ATLEAST ONE TRANSACTION OF PURCHASE OR SALE EVERY DAY WHICH INDICATES AN INTENTION TO SELL FOR PROFIT. (C) IN SOME INSTANCES THE ASSESSEE HAS SOLD THE SHA RES WITHOUT EVEN TAKING DELIVERY. (D) THE ASSESSEE IN SOME CASES HAS PURCHASED THE SHARES AND SOLD THEM IMMEDIATELY WHICH INDICATES TH E ITA NO: 2735/MUM/2009 3 ANXIETY TO UTILIZE THE AVAILABLE CAPITAL IN AN OPTI MUM MANNER BY QUICKLY DISPOSING OF THE STOCK. (E) OUT OF THE TOTAL SALES OF RS.40,26,10,567/-, TH E PURCHASES OF RS.31,64,68,336/- CONSTITUTES 88%. (F) THERE IS A HUGE FREQUENCY OF TURNING OVER THE C APITAL IN ORDER TO MAXIMIZE THE TURNOVER AND PROFIT. THE TURNOVER IS ALMOST 50 TIMES THE CAPITAL AVAILABLE. THE TURNOVER TO CAPITAL RATIO IS 1 : 6.66. THIS RATIO IS TOO HIGH FOR AN INVESTMENT ACTIVITY. (G) BARRING THREE TRANSACTIONS IN THE BEGINNING OF THE YEAR, ALMOST ALL THE SALES OF SHARES WHICH HAVE GIVEN RIS E TO SHORT TERM CAPITAL GAINS WERE PURCHASED DURING THE YEAR. THIS SHOWS AN INTENTION TO MAKE PROFIT, NOT TO HOLD ON TO THE SHARES AS INVESTMENT. (H) THE PERIOD OF HOLDING OF THE SHARES RANGES FROM ONE DAY TO THREE MONTHS, AND THE AVERAGE PERIOD OF HOLDING IS LESS THAN A MONTH. (I) THE ASSESSEE HAS SEPARATELY SHOWN SPECULATION P ROFIT ON SPECULATIVE TRANSACTIONS. 4. AFTER NOTICING THE ABOVE FACTS THE AO PROCEEDED TO GIVE CERTAIN REASONS AS TO WHY HE THOUGHT THAT THE SURPL US RECEIVED ON THE SALE OF SHARES SHOULD BE ASSESSED AS PROFITS OF A BUSINESS IN SHARES. HE HELD THAT THE MERE FACT THE ASSESSEE IS FULLY ENGAGED IN OTHER BUSINESSES DOES NOT MEAN THAT HE CANNOT TAKE UP SHARE BUSINESS. ACCORDING TO THE AO THERE IS NO LIMIT TO HUMAN INGENUITY AND MENTAL CAPACITY. THE AO FURTHER HELD THAT IT I S NOT CORRECT TO ITA NO: 2735/MUM/2009 4 SAY THAT ONLY INTRA DAY TRADING IN SHARES AMOUNTS T O BUSINESS. ACCORDING TO THE AO INTRA DAY TRADING WITHOUT TAKIN G DELIVERY AMOUNTS TO SPECULATIVE TRADE WHICH IS DIFFERENT FRO M NON SPECULATIVE TRANSACTIONS WHERE DELIVERY IS GIVEN AND TAKEN AND THE GAINS OF WHICH ARE ASSESSED AS BUSINESS INCOME. AS REGARDS THE ASSESSEES CLAIM THAT SHE MADE THE INVESTMENTS IN S HARES OUT OF HER OWN FUNDS AND DID NOT RESORT TO ANY BORROWINGS, THE AO HELD THAT THIS IS NOT A DECISIVE FACT. THE AO FURTHER N OTED THAT THE ASSESSEES CLAIM THAT INVESTMENTS CAN BE DONE THROU GH PORTFOLIO MANAGEMENT SERVICES AND THAT IT WAS NOT NECESSARY T HAT THE ASSESSEE HERSELF SHOULD BE MANAGING THE INVESTMENTS WAS NOT RELEVANT BECAUSE DURING THE YEAR NO INVESTMENTS WER E MADE THROUGH PORTFOLIO MANAGEMENT SERVICES. AS REGARDS THE ASSESSEES CLAIM THAT THE INVESTMENTS WERE EARNING DIVIDENDS AND MOST OF THEM WERE HELD FOR MORE THAN A YEAR, THE AO OBSERVED THAT ALMOST ALL THE SHARES WHICH GAVE RISE TO SHORT TERM CAPITAL GAINS WERE PURCHASED DURING THE YEAR EXCEPT THREE SHARES WHICH WERE SOLD PRIOR TO 30 TH SEPTEMBER 2004. HE OBSERVED THAT JUST BECAUSE THE ASSESSEE HAD SOME SHARE HOLDING AS OPENING BALA NCE, IT DOES NOT MAKE ALL HER ACTIVITY DURING THE YEAR AS INVEST MENT ACTIVITY. 5. IN THE COURSE OF THE ASSESSMENT PROCEEDINGS THE ASSESSEE AGAIN WROTE A LETTER TO THE AO IN WHICH THE FOLLOWI NG FACTS WERE BROUGHT TO THE NOTICE OF THE AO: - (1) THE SERVICES OF WELL KNOWN PROFESSIONALS SUCH A S ENAM GROUP, KOTAK SECURITIES AND FALCON SECURITIES WERE EMPLOYED FOR THE PURPOSE OF MAKING THE ITA NO: 2735/MUM/2009 5 INVESTMENTS AND FOR SUCH SERVICES SEPARATE FEES WER E PAID IN ADDITION TO THE NORMAL BROKERAGE. THE DECISION TO BUY OR SELL SHARES WAS TAKEN STRICTLY A S PER THEIR ADVICE. (2) ALL THE INVESTMENTS WERE CATEGORIZED AS INVESTM ENTS AND NOT AS STOCK-IN-TRADE IN THE BOOKS OF ACCOUNTS. (3) THERE IS NO STAFF OR OTHER INFRASTRUCTURE TO CA RRY OUT THE ACTIVITY AS A REGULAR BUSINESS ACTIVITY. (4) THE INVESTMENTS IN THE PAST TEN YEARS HAVE BEEN TREATED AS SUCH AND NOT AS BUSINESS ACTIVITY. (5) SUBSTANTIAL AMOUNTS OF DIVIDEND WERE EARNED. (6) THE INSTANCES OF INTRA DAY TRANSACTIONS WERE OF SQUARING UP OF THE TRANSACTIONS EITHER DUE TO THE MISTAKE OF THE BROKER OR NON DELIVERY BY THE SELLER . (7) THE ASSESSEE NEVER BORROWED MONEY FOR INVESTING IN SHARES AND USES HER SURPLUS FUNDS HELD BY HER. THESE POINTS RAISED BY THE ASSESSEE WERE ALSO NEGAT IVED BY THE AO. HE REITERATED HIS EARLIER OBSERVATIONS REGARDI NG THE FACTS NOTICED BY HIM IN THE COURSE OF THE ASSESSMENT PROC EEDINGS. HE ALSO REFERRED TO THE CIRCULAR NO.4/2007 ISSUED BY T HE CBDT ON 15 TH JUNE 2007 WHERE THE TESTS FOR MAKING A DISTINCTION BETWEEN SHARES HELD AS STOCK-IN-TRADE AND THOSE HELD AS INVESTMENT WERE LAID DOWN. THE AO ALSO REFERRED TO THE DECISION OF THE SUPREME COURT IN THE FOLLOWING CASES: - (A) G VENKATASWAMI NAIDU & CO. VS. CIT (1959) 35 ITR 594 (SC) (B) DALMIA CEMENT LTD. VS. CIT (1976) 105 ITR 633 ( SC) (C) SAROJ KUMAR MAZUMDAR VS. CIT (1959) 37 ITR 242 (S C) ITA NO: 2735/MUM/2009 6 ULTIMATELY HE HELD THAT THE GAINS ARISING TO THE AS SESSEE FROM SALE OF SHARES CANNOT BE REGARDED AS SHORT TERM CAPITAL GAINS BUT SHOULD BE TREATED AS PROFITS AND GAINS FROM BUSINESS. ACC ORDINGLY HE BROUGHT THE INCOME OF RS.2,25,47,992/- AS PROFITS F ROM THE BUSINESS OF TRADING IN SHARES. THE LONG TERM CAPITAL GAINS OF RS.2,26,60,995/- WAS ACCEPTED AND THE HEAD OF INCOM E WAS NOT CHANGED. 6. THE ASSESSEE APPEALED TO THE CIT(A) AND RAISED S EVERAL GROUNDS IN SUPPORT OF HER CLAIM THAT THE SURPLUS ON THE SALE OF SHARES WAS RIGHTLY DECLARED AS SHORT TERM CAPITAL G AINS AND THAT THE AO WAS IN ERROR IN HOLDING THAT THE SURPLUS SHOULD BE ASSESSED AS PROFITS OF SHARE BUSINESS. THE CIT(A) EXAMINED THE FACTS OF THE CASE AND THE SUBMISSIONS OF THE ASSESSEE IN DETAIL AND ULTIMATELY UPHELD THE VIEW OF THE AO. HE SOUGHT TO SUPPORT HI S DECISION BY THE FOLLOWING FINDINGS RECORDED BY HIM: - (I) THE SUBSTANTIAL NATURE OF THE TRANSACTIONS, THE MANNER IN WHICH THE BOOKS OF ACCOUNTS WERE MAINTAINED, THE MAGNITUDE OF PURCHASES AND SALES AND THE RATIO BETWEEN PURCHASES AND SALES AND THE PERIOD OF HOLDING ALL FURNISH A GOOD GUIDE TO DETERMINE THE NATURE OF THE TRANSACTIONS. (II) THE MOTIVE OR INTENTION OF THE ASSESSEE IS REL EVANT AND ORDINARILY A PROFIT MOTIVE WOULD INDICATE A BUSINESS IN THE SHARES WHEREAS AN INTENTION TO INVE ST AND DERIVE INCOME THEREFROM WOULD INDICATE THAT THE ITA NO: 2735/MUM/2009 7 SURPLUS ARISING ON THE SALE OF THE SHARES IS A CAPI TAL RECEIPT. (III) AS RECOGNIZED IN THE CIRCULAR OF THE CBDT (SU PRA) IT IS POSSIBLE FOR A TAXPAYER TO HAVE TWO PORTFOLIOS, I.E . AN INVESTMENT PORTFOLIO AND A TRADING PORTFOLIO AND NO SINGLE PRINCIPLE CAN BE DECISIVE TO DECIDE WHETHER THE SURPLUS SHOULD BE CONSIDERED AS BUSINESS INCOME OR CAPITAL GAINS AND IT IS THE TOTAL EFFECT OF ALL PRI NCIPLES THAT SHOULD BE CONSIDERED. (IV) ALL THE SHARES, SECURITIES AND MUTUAL FUNDS AR E REFLECTED IN THE BALANCE SHEET OF THE ASSESSEE UNDE R THE HEAD INVESTMENTS. (V) THE ASSESSEE HAD TWO PORTFOLIOS, ONE IN INVESTM ENT PORTFOLIO AND ANOTHER A TRADE PORTFOLIO. ALL THE PURCHASES WERE CLASSIFIED AS INVESTMENTS IN THE BALANCE SHEET. HOWEVER, THE ASSESSEE WAS NOT SATISFIED BY MERELY INVESTING IN THE SHARE MARKET, SHE WAS ALSO DICTATED BY THE UPWARD TRENDS IN THE MARKE T AND WANTED TO REAP THE PROFITS WITH THE RESULT THAT SHE FREQUENTLY BOUGHT AND SOLD SHARES. (VI) THE ASSESSEE PURCHASED 38 SCRIPS DURING THE YE AR AND SOLD 41 SCRIPS DURING THE YEAR, OUT OF WHICH 31 WERE SCRIPS INCLUDED UNDER THE HEAD SHORT TERM CAPITAL GAINS. OVER A PERIOD OF TWO YEARS INCLUDI NG THE CURRENT YEAR, THE ASSESSEE HAS DEALT IN ONLY 56 SCRIPS. THE TOTAL NUMBER OF TRANSACTIONS TREATED A S ITA NO: 2735/MUM/2009 8 SHORT TERM CAPITAL GAINS WAS 49 DURING THE YEAR AND THE SALES WERE 43 IN NUMBER. (VII) THOUGH THE NUMBER OF SCRIPS DEALT IN BY THE A SSESSEE IS SMALL, THE NUMBER OF ACTUAL TRANSACTIONS ARE SUBSTANTIAL. THE PERUSAL OF DETAILS INDICATES THAT THE INTENTION OF THE ASSESSEE WAS TO BUY AND SELL SHARE S WITH A VIEW TO MAXIMIZING THE PROFIT. THEREFORE, E VEN THE TRANSACTIONS WHICH WERE CONSIDERED TO GIVE RISE TO SHORT TERM CAPITAL GAINS HAVE BEEN DONE WITH AN INTENTION TO MAXIMIZE PROFIT BY EXPLOITING THE MARK ET CONDITIONS AND, THEREFORE, THE SURPLUS HAS TO BE TREATED AS BUSINESS PROFITS. MORE SO WHEN THE INTENTION OF THE ASSESSEE AND THE FREQUENCY OF THE TRANSACTIONS ARE CONSIDERED. AN INVESTOR WOULD ALS O BE GUIDED BY UPWARD TRENDS IN THE MARKET BUT NOT T O THE EXTENT THAT HE WOULD ENTER THE MARKET TO SELL T HE SCRIPS AT EVERY FAVOURABLE TURN IN THE MARKET. (VIII) THAT THE ASSESSEE WAS ALL ALONG ASSESSED UND ER THE HEAD CAPITAL GAINS WHEN SHE REALIZED THE SHARES HELD AS INVESTMENTS IS A STRONG POINT IN HER FAVOUR BUT IN THE PRESENT YEAR THE ASSESSEE MADE USE OF THE MARKET CONDITIONS MORE INTENSELY THAN IN THE EARLIE R YEARS WHICH JUSTIFIES A DIFFERENT TREATMENT TO THE SURPLUS. IN THE LIGHT OF THE ABOVE FINDINGS THE CIT(A) UPHEL D THE AOS VIEW THAT THE SURPLUS DECLARED AS SHORT TERM CAPITAL GAI NS WAS RIGHTLY ITA NO: 2735/MUM/2009 9 ASSESSED AS BUSINESS PROFITS. HE HOWEVER DIRECTED THAT THE AO SHOULD ALLOW THE REBATE FOR PAYMENT OF SECURITIES T RANSACTION TAX UNDER SECTION 88E OF THE ACT, AFTER DUE VERIFICATIO N. THE APPEAL OF THE ASSESSEE WAS THUS PARTLY ALLOWED. 7. IT IS AGAINST THE AFORESAID DECISION OF THE CIT( A) THAT THE ASSESSEE HAS FILED THE FURTHER APPEAL BEFORE THE TR IBUNAL. ALL THE FOUR GROUNDS RAISED BEFORE US RELATE TO THE SINGLE ISSUE, NAMELY, WHETHER THE SURPLUS OF RS.2,25,47,992/- WAS RIGHTLY ASSESSED AS PROFITS OF SHARE BUSINESS. 8. IN SUPPORT OF THE APPEAL THE LEARNED REPRESENTAT IVE FOR THE ASSESSEE DREW OUR ATTENTION TO PAGES 6, 17 AND 30 O F THE PAPER BOOK TO SHOW THAT THE ASSESSEES INVESTMENT PORTFOL IO IS HUGE IN TERMS OF VALUE BUT THE SCRIPS HELD NUMBERED ONLY TO 26 AND THUS THE AVERAGE HOLDING IN EACH SCRIP IS APPROXIMATELY RS.4 5.00 LAKHS. ACCORDING TO HIM SUCH A HUGE PORTFOLIO AMOUNTING TO RS.12,59,85,603/- CONSISTING OF ONLY 26 SCRIPS CLEA RLY SHOWS THAT IT IS AN INVESTMENT PORTFOLIO ONLY AND THE ASSESSEE NE VER ACQUIRED THESE SHARES WITH A VIEW TO TURNING THEM INTO PROFI T. OUR ATTENTION WAS ALSO DRAWN TO THE OTHER INVESTMENTS IN VARIOUS TAX SAVING BONDS AND EQUITY MUTUAL FUNDS WHICH TOTALLED TO ONL Y RS.3,79,80,707/-. THE CONTENTION WAS THAT IF THE I NVESTMENTS IN TAX SAVING BONDS AND MUTUAL FUNDS AMOUNTING TO A MUCH L ESSER FIGURE CAN BE CONSIDERED AS INVESTMENTS IN THE PROPER SENS E, IT IS ALL THE MORE REASON THAT THE PORTFOLIO OF 26 SCRIPS AGGREGA TING TO RS.12,59,85,603/- SHOULD BE CONSIDERED ONLY AS INVE STMENT AND NOT AS STOCK-IN-TRADE. DRAWING OUR ATTENTION TO PAGE 1 7 READ WITH PAGE ITA NO: 2735/MUM/2009 10 30 OF THE PAPER BOOK, IT WAS THE CONTENTION OF THE LEARNED REPRESENTATIVE FOR THE ASSESSEE THAT IN ALL THERE W ERE 49 TRANSACTIONS OF PURCHASES DURING THE YEAR AGGREGATI NG TO RS.24,55,92,694/- AND THE TRANSACTIONS OF SALES DUR ING THE YEAR AMOUNTED TO 43 IN NUMBER AND THE AMOUNT OF SALES WA S RS.28,01,36,986/-. OUR ATTENTION WAS DRAWN TO PAGE S 17 TO 19 OF THE PAPER BOOK, WHICH CONTAIN THE DETAILS OF SHORT TERM CAPITAL GAINS SCRIP-WISE. IT WAS POINTED OUT THAT THERE WERE IN ALL ONLY 30 SCRIPS AND EVEN WHERE THE SAME SCRIPS WERE PURCHASED IN DI FFERENT LOTS ON THE SAME DAY, THE AO HAS TAKEN THEM TO BE DIFFERENT TRANSACTIONS, WHICH IS NOT PROPER. HE ALSO DREW OUR ATTENTION TO PAGES 74 TO 79 OF THE PAPER BOOK IN AN ATTEMPT TO SHOW THAT EACH ORDE R PLACED BY THE ASSESSEE TO THE BROKER ON THE SAME DAY BUT AT DIFFE RENT TIMES AND DIFFERENT LOTS WAS TAKEN AS A SEPARATE TRANSACTION OF PURCHASE AND COUNTED AS SUCH BY THE AO, WHICH WAS WRONG. IT WAS EXPLAINED THAT IN THE CASE OF MAN INDUSTRIES LIMITED THE ASSE SSEE HAD PURCHASED 25000 SHARES ON THE SAME DAY BUT AT DIFFE RENT TIMES DURING THE DAY AND THE BROKER M/S FALCON BROKERAGE PVT. LTD. HAD RAISED THE CONTRACT NOTE SHOWING THE DETAILS OF THE LOT ORDERS ITEM- WISE AND LOT-WISE SEPARATELY, BUT THAT DOES NOT MEA N THAT THE ASSESSEE ENTERED INTO AS MANY TRANSACTIONS ON THE S AME DAY. IT WAS SUBMITTED THAT THE ASSESSEES INTENTION WAS TO ACQUIRE 25000 SHARES OF MAN INDUSTRIES LIMITED AND THE BROKER WAS ABLE TO OBTAIN THOSE SHARES IN THE STOCK MARKET AT DIFFERENT TIMES DURING THE SAME DAY AND IN DIFFERENT NUMBERS AND ALL THESE DETAILS WERE SHOWN IN THE CONTRACT NOTE, BUT THE TRANSACTION WAS ONLY A S INGLE TRANSACTION ITA NO: 2735/MUM/2009 11 IN RESPECT OF A SHARE OF THE SAME COMPANY SPREAD TH ROUGHOUT THE DAY. IT WAS ARGUED THAT THE AO WAS INFLUENCED BY T HE NUMBER OF TRANSACTIONS SHOWN IN THE CONTRACT NOTE AND HE TOOK A DECISION THAT THE ASSESSEES TRANSACTIONS WERE OF HIGH FREQUENCY WITHOUT APPRECIATING THAT THE INTENTION OF THE ASSESSEE WAS TO ACQUIRE 25000 SHARES IN THE SAME COMPANY WHICH COULD BE OBT AINED ONLY IN DIFFERENT LOTS BUT ON THE SAME DAY. ACCORDING TO T HE LEARNED REPRESENTATIVE FOR THE ASSESSEE THIS SHOULD BE CONS IDERED ONLY AS A SINGLE TRANSACTION AND IF IT IS SO CONSIDERED THEN THERE WOULD BE NO BASIS FOR THE AOS VIEW THAT THE FREQUENCY OF THE P URCHASES OF THE SHARES WAS VERY HIGH. BESIDES THE ABOVE SUBMISSION , THE LEARNED REPRESENTATIVE FOR THE ASSESSEE ALSO PUT FORTH THE FOLLOWING SUBMISSIONS: - (1) THERE ARE ONLY TWO SCRIPS IN WHICH NO DELIVERY WAS TAKEN BUT THE LOSS IN THESE TRANSACTIONS WAS ONLY A PALTRY SUM OF RS.474/-. THIS SHOULD NOT HAVE INFLUENCED THE AO TO COME TO THE CONCLUSION THAT TH E ASSESSEE IS INDULGING IN SPECULATIVE TRANSACTIONS. (2) THE ASSESSEE HAS NOT ENGAGED HERSELF IN ANY FUT URES AND OPTIONS TRANSACTIONS DURING THE YEAR. (3) IN THE ASSESSMENT YEAR 2004-05 (PRECEDING YEAR) AND IN THE ASSESSMENT YEAR 2007-08 (A LATER YEAR) THE A O HAS ACCEPTED THE ASSESSEES CLAIM THAT THE SALE OF SHARES HELD IN THE INVESTMENT PORTFOLIO HAS GIVEN R ISE TO SHORT TERM CAPITAL GAINS OR LONG TERM CAPITAL GA INS AS THE CASE MAY BE AND THESE ASSESSMENTS WERE ITA NO: 2735/MUM/2009 12 COMPLETED AFTER SCRUTINY UNDER SECTION 143(3) OF TH E ACT. OUR ATTENTION WAS DRAWN TO PAGE 192 OF THE PAPER BOOK WHICH CONTAINS A COMPARATIVE STATEMENT OF FACTS BETWEEN THE YEAR UNDER APPEAL ON THE ONE HAND AND THE ASSESSMENT YEARS 2004-05 AND 2007- 08. THE ATTEMPT IS TO SHOW THAT THE FACTS IN ALL T HE THREE YEARS ARE THE SAME AND, THEREFORE, A DIFFEREN T TREATMENT FOR THE YEAR UNDER APPEAL IS NOT JUSTIFIE D. (4) THE CIT TOOK ACTION UNDER SECTION 263 FOR THE Y EAR UNDER APPEAL TO TREAT THE LONG TERM CAPITAL GAINS DERIVED BY THE ASSESSEE ON SALE OF SHARES ALSO AS BUSINESS INCOME, BUT AFTER CONSIDERING THE ASSESSEE S EXPLANATION THE PROCEEDINGS WERE DROPPED. THE NOTICE OF THE CIT DATED 26 TH NOVEMBER 2009 AND THE ORDER DATED 19 TH MARCH 2010 DROPPING THE PROCEEDINGS ARE PLACED AT PAGES 193 TO 195 OF THE PAPER BOOK. (5) THE ASSESSEES BACKGROUND HAS TO BE TAKEN INTO ACCOUNT. SHE IS NOT ENGAGED IN ANY BUSINESS IN SHARES AND DOES NOT HAVE THE EXPERTISE AT ALL. SHE IS A PARTNER IN A FIRM EXPORTING GARMENTS AND ACCESSORIES AND A DIRECTOR IN A COMPANY CARRYING ON A SIMILAR BUSINESS. THE PROBABILITY OF THE ASSESSE E INDULGING IN BUSINESS IN SHARES IN THIS BACKGROUND IS ALMOST NIL. ITA NO: 2735/MUM/2009 13 (6) THE AO, HAVING ACCEPTED THE ASSESSEES CLAIM IN AN EARLIER AND LATER ASSESSMENT YEAR AFTER SCRUTINY UN DER SECTION 143(3), CANNOT TAKE A DIFFERENT VIEW ON SIM ILAR FACTS FOR THE YEAR UNDER APPEAL JUST BECAUSE THE TA X RATE ON CAPITAL GAINS WAS REDUCED COMPARED TO THE NORMAL RATES OF TAX, OVERLOOKING THAT THE REDUCTION OF THE TAX RATE ON CAPITAL GAINS WAS BECAUSE OF THE INTRODUCTION OF THE SECURITIES TRANSACTION TAX WITH EFFECT FROM 01.10.2004. (7) ON SIMILAR FACTS IN THE ASSESSEES FATHERS CAS E THE TRIBUNAL HAS HELD IN THE CASE OF VINOD M SHAH (ITA NO: 2731/MUM/2009 ASSESSMENT YEAR 2005-06) DATED 26.02.2010, THAT THE SURPLUS ARISING ON THE S ALE OF SHARES REPRESENTED SHORT TERM CAPITAL GAINS SINC E THOSE SHARES WERE HELD BY THE ASSESSEES FATHER AS INVESTMENTS. THE FACTS OF THE ASSESSEES CASE ARE SAME. IN COMING TO THE ABOVE CONCLUSION IN THE FATHERS CASE THE TRIBUNAL HAS REFERRED TO THE JUDG MENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF GOPAL PUROHIT (INCOME TAX APPEAL NO: 1121 OF 2009 DATED 06.01.2010). THE FACTS OF THE ASSESSEES CAS E ARE SIMILAR TO THE FACTS IN THE CASE OF GOPAL PUROH IT AND THIS IS EXPLAINED IN PAGES 189 TO 191 OF THE PA PER BOOK. ITA NO: 2735/MUM/2009 14 9. ON THE OTHER HAND THE LEARNED CIT DEPARTMENTAL REPRESENTATIVE HAS STRONGLY SUPPORTED THE CONCLUSIO N OF THE CIT(A) AND URGED THE FOLLOWING POINTS: - (1) THE MOTIVE OF THE ASSESSEE IS TO DO BUSINESS IN SHARES AS SEEN FROM THE FACTS BROUGHT OUT BY THE DEPARTMENTAL AUTHORITIES. SHE HAS BEEN ABLE TO DEVOTE SUFFICIENT TIME TO BUY AND SELL THE SHARES A ND THE FACT THAT SHE WAS A PARTNER IN A FIRM AND A DIR ECTOR IN A COMPANY DOES NOT APPEAR TO HAVE COME IN THE WAY OF HER DEVOTING HER TIME AND ENERGY TO THE SHAR E DEALINGS. (2) THE SHARE DEALINGS ARE MARKED BY HUGE VOLUMES, CONTINUITY AND REGULARITY WHICH ARE INDICES OF BUSINESS. (3) AS POINTED OUT BY THE AO, THE CAPITAL TO TURNOV ER RATIO IS 1 : 6.66 AND THIS IS TOO HIGH TO CONTEND THAT THE ACTIVITY IS AN INVESTMENT ACTIVITY. ON THE CONTRAR Y SUCH A HIGH RATIO IS INDICATIVE OF BUSINESS. (4) THE ABSENCE OF BORROWED FUNDS FOR INVESTMENT MA Y BE A RELEVANT FACTOR IN DECIDING THE NATURE OF THE ACTIVITY BUT IS NOT CONCLUSIVE. (5) THERE IS NO FINALITY ATTACHED TO THE EARLIER OR LATER YEARS ASSESSMENT THOUGH THEY WERE COMPLETED UNDER SECTION 143(3) BECAUSE IT IS ESSENTIALLY A QUESTION OF FACT AS TO WHETHER THE ASSESSEE, GOING BY THE FACTS ITA NO: 2735/MUM/2009 15 OBTAINING IN THE YEAR OF APPEAL, IS AN INVESTOR OR DEALER IN SHARES. (6) IN CASE THE ASSESSEES ACTIVITY IS HELD TO BE B USINESS ACTIVITY, APPROPRIATE DIRECTIONS MAY BE GIVEN TO TH E AO TO CONSIDER THE EXPENSES TO BE ALLOWED AGAINST THE PROFITS. IN SUPPORT OF THE AFORESAID SUBMISSIONS, THE LEARNE D CIT DR CITED THE FOLLOWING AUTHORITIES: - (1) SIR KIKABHAI PREMCHAND VS. CIT (1953) 24 ITR 506 (SC) (2) G VENKATASWAMI NAIDU & CO. VS. CIT (1959) 35 ITR 594 (SC) (3) RAJA BAHADUR VISHESHWARA SINGH (DECEASED) VS. CIT (1961) 41 ITR 685 (SC) (4) CIT VS. PRABHU DAYAL (1971) 82 ITR 804 (SC) (5) KEDARNATH JUTE MFG. CO. LTD. VS. CIT (1971) 82 I TR 363 (SC) (6) CIT VS. SUTLEJ COTTON MILLS SUPPLY AGENCY LTD. (1 975) 100 ITR 706 (SC) (7) DALHOUSIE INVESTMENT TRUST CO. LTD. VS. CIT (1968) 6 8 ITR 486 (SC) (8) BARENDRA PROSAD RAY VS. ITO (1981) 129 ITR 295 (S C) (9) DCIT VS. SMT DEEPABEN AMITBHAI SHAH (2006) 99 ITD 219 (AHD) 10. IN HIS BRIEF REPLY THE LEARNED REPRESENTATIVE F OR THE ASSESSEE POINTED OUT THAT THE FACTS OF THE CASE SHOW THAT TH E ASSESSEE HAD ENGAGED BROKERS TO ACQUIRE AND DISPOSE OF THE SHARE S AND THIS CAN BE DONE WITHOUT IN ANY WAY DISTURBING THE ASSESSEE S FULL TIME OCCUPATION AS PARTNER IN A FIRM AND DIRECTOR IN A C OMPANY. HE SUBMITTED THAT JUST BECAUSE THE ASSESSEE WAS ABLE T O PUT THROUGH THE TRANSACTIONS THROUGH BROKERS IT CANNOT BE SAID THAT THE ACTIVITY AMOUNTS TO BUSINESS AND THE SHARES WERE HELD AS STO CK-IN-TRADE. 11. WE HAVE CAREFULLY CONSIDERED THE FACTS AND THE RIVAL CONTENTIONS. IT SEEMS TO US THAT ON THE FACTS OF T HE CASE IT IS DIFFICULT TO HOLD THAT THE ASSESSEE WAS CARRYING ON A BUSINES S IN SHARES, WITH THE SHARES AS HER STOCK-IN-TRADE. AS ALREADY NOTED, THE ASSESSEES BACKGROUND DOES NOT INDICATE THAT SHE WA S FAMILIAR WITH THE SHARE BUSINESS. SHE WAS A WORKING PARTNER IN A PARTNERSHIP ITA NO: 2735/MUM/2009 16 FIRM WHICH WAS ENGAGED IN THE GARMENT BUSINESS AND WAS A DIRECTOR IN A COMPANY WHICH WAS ALSO ENGAGED IN A S IMILAR BUSINESS. IT WOULD APPEAR THEREFORE THAT SHE HARDL Y HAD ANY KNOWLEDGE ABOUT THE NUANCES OF SHARE TRADING. SHE ALSO DID NOT BORROW ANY MONIES FOR THE PURPOSE OF ACQUIRING THE SHARES AND THIS FACT IS NOT DISPUTED ON BEHALF OF THE REVENUE. THE SHARES HAVE BEEN ACQUIRED OUT OF THE SURPLUS FUNDS LEFT WITH TH E ASSESSEE. SHE HAS DISCLOSED THE SHARES IN THE BALANCE SHEET AS SH ARES ONLY AND NOT AS STOCK-IN-TRADE. THIS FACT HAS ALSO BEEN REC OGNIZED BY THE DEPARTMENTAL AUTHORITIES. IN PARAGRAPH 15 OF HIS O RDER THE CIT(A) HAS OBSERVED THAT THE ASSESSEE HAS CONSIDERED ALL T HE PURCHASE OF SHARES ONLY AS INVESTMENTS AND THAT THEY WERE CLASS IFIED AS SUCH IN THE BALANCE SHEET. HE HAS ALSO GONE ON TO OBSERVE THAT THE ASSESSEE HAD TWO PORTFOLIOS, A TRADE PORTFOLIO AND AN INVESTMENT PORTFOLIO. FROM THE BALANCE SHEET AS ON 31.03.2005 IT IS DIFFICULT TO FIND ANY SHARES HELD IN THE TRADE PORTFOLIO AND TO THIS EXTENT THE CIT(A) APPEARS TO BE WRONG I.E., IN SAYING THAT T HE ASSESSEE HAD TWO PORTFOLIOS. ACCORDING TO THE BALANCE SHEET AS ON 31.03.2005 THE SHARES COSTING RS.12,59,85,603/- WERE SHOWN AS SHARES AND THE BALANCE SHEET ALSO CONTAINED THE LIST OF THE SH ARES OF THE 26 COMPANIES HELD BY THE ASSESSEE. THE BALANCE SHEET ALSO DISCLOSED RS.3,79,80,707/- AS OTHER INVESTMENTS W HICH CONSISTED MAINLY OF BONDS AND MUTUAL FUNDS. THERE WERE NO SH ARES WHICH WERE SHOWN IN THE BALANCE SHEET OR THE PROFIT AND L OSS ACCOUNT AS STOCK-IN-TRADE. SURPLUS RECEIVED ON THE SHARES SOL D DURING THE YEAR WERE SHOWN AS EITHER SHORT TERM CAPITAL GAINS OR AS LONG TERM ITA NO: 2735/MUM/2009 17 CAPITAL GAINS. SO FAR AS THE LONG TERM CAPITAL GAI NS IS CONCERNED, WE HAVE ALREADY SEEN THAT THE AO DID NOT DISPUTE TH E NATURE OF THE GAINS AND MADE NO ATTEMPT TO TREAT THEM AS BUSINESS PROFITS. IT IS ONLY WITH REGARD TO THE SHORT TERM CAPITAL GAINS TH AT HE HAS TAKEN A VIEW THAT THEY REPRESENT BUSINESS PROFITS APPARENTL Y BECAUSE OF THE PERIOD OF HOLDING. IF THE AVERAGE INVESTMENT MADE BY THE ASSESSEE IN ONE SCRIP IS TAKEN, IT COMES TO AROUND RS.45.00 LAKHS AS POINTED OUT BY THE ASSESSEE, WHICH APPEARS TO BE TOO HIGH F OR AN INDIVIDUAL TO HOLD AS STOCK-IN-TRADE. THE PORTFOLIO OF THE SH ARES SHOWS THAT MANY OF THE SCRIPS ARE OF BLUE CHIP COMPANIES, THEI R SHARES IN WHICH ARE NORMALLY CONSIDERED TO BE SAFE AND SOUND INVEST MENTS. THE LIST IS ATTACHED TO THE BALANCE SHEET AS ON 31.03.2005 A ND IT INCLUDES THE SHARES OF MADRAS CEMENTS LTD., COLGATE LTD., LU MAX INDUSTRIES, BHARAT ELECTRONICS, RELIANCE INDUSTRIES, FINOLEX, M AHINDRA & MAHINDRA, APPOLO TYRE, TCS LTD., NTPC, TISCO, POLAR IS, ETC. THE DETAILS OF THE SHORT TERM CAPITAL GAINS ALSO ATTACH ED TO THE BALANCE SHEET SHOWS SALE OF SHARES OF SEVERAL BLUE CHIP COM PANIES BESIDES THE AFORESAID COMPANIES. THE ASSESSEE HAS NOT INDU LGED IN ANY DEALINGS IN FUTURES AND OPTIONS AND THE INSTANCES O F SHARE TRANSACTIONS INVOLVING NO DELIVERY ARE ONLY TWO AND THE LOSS THEREIN WAS ONLY RS.474/-. THE AO APPEARS TO HAVE BEEN INF LUENCED MORE BY THE FREQUENCY OF THE TRANSACTIONS AND HE HAS CIT ED THE BROKERS CONTRACT NOTES WHICH SHOW A NUMBER OF ORDERS PLACED FOR PURCHASE OF THE SHARES ON THE SAME DAY AT DIFFERENT RATES. WE HAVE ALREADY REFERRED TO THE ARGUMENT OF THE LEARNED REPRESENTAT IVE FOR THE ASSESSEE AS TO HOW THE CONTRACT NOTES ARE ISSUED BY THE SHARE ITA NO: 2735/MUM/2009 18 BROKER. HE HAS ALSO REFERRED TO PAGES 74 TO 79 OF THE PAPER BOOK WHICH CONTAINS THE CONTRACT NOTES ISSUED BY FALCON BROKERAGE PVT. LTD. ON 1 ST FEBRUARY 2005. THOUGH THERE ARE SEVERAL ORDERS FO R PURCHASE OF THE SHARES OF MAN INDUSTRIES LTD. ON TH E SAME DAY, THE ASSESSEE APPEARS TO HAVE INTENDED TO ACQUIRE 25000 SHARES IN THIS COMPANY AND THE CONTRACT NOTE MERELY EXHIBITED THE DIFFERENT TIMES ON THE SAME DAY AT WHICH THE BROKER ACQUIRED THE SH ARES IN THE STOCK EXCHANGE AT DIFFERENT RATES. ULTIMATELY THE BROKER HAD ACQUIRED 25000 SHARES OF THE COMPANY ON BEHALF OF T HE ASSESSEE FOR A TOTAL PRICE OF RS.26,80,890/-. THUS IT IS AC TUALLY A SINGLE TRANSACTION FOR ACQUIRING 25000 SHARES IN A COMPANY AND NOT SEVERAL TRANSACTIONS OF ACQUIRING THE SAME COMPANY S SHARES ON A SINGLE DAY AS ASSUMED BY THE AO. THE ASSESSEE HAS ALSO EXPLAINED IN SIMILAR FASHION THE DETAILS OF THE SHO RT TERM CAPITAL GAINS FURNISHED IN PAGES 17 TO 19 OF THE PAPER BOOK , WHICH HAS BEEN EXPLAINED ALONG WITH THE DETAILS CONTAINED AT PAGE 30 OF THE PAPER BOOK. THESE DETAILS SHOW THAT THE ASSESSEE S OLD 30 SCRIPS DURING THE YEAR, WHICH GAVE RISE TO THE SHORT TERM CAPITAL GAINS OF RS.2,25,47,992/-. THE SALES ON THE SAME DAY BUT IN DIFFERENT LOTS OF THE SHARES OF THE SAME COMPANY CANNOT BE TREATED, I N OUR OPINION, AS SEPARATE TRANSACTIONS OF SALE IN ORDER TO JUDGE THE FREQUENCY OF THE SALES. WE HAVE ALREADY REFERRED TO THE ARGUMEN T OF THE LEARNED REPRESENTATIVE FOR THE ASSESSEE THAT WHEN THE SHARE S OF AUTOMO COR WERE PURCHASED ON 25.11.2004 IN THREE LOTS, THE Y HAVE TO BE TREATED AS A SINGLE PURCHASE TRANSACTION AND SIMILA RLY WHEN THE SHARES OF THE SAID COMPANY WERE SOLD ON 29.11.2004 IN THREE ITA NO: 2735/MUM/2009 19 SEPARATE LOTS, THEY HAVE TO BE TAKEN AS A SINGLE SA LE. IT SEEMS TO US THAT THIS IS A REASONABLE WAY OF ASCERTAINING THE F REQUENCY OF THE TRANSACTIONS. THIS IS THE WAY IN WHICH THE STATEME NT AT PAGE 30 OF THE PAPER BOOK HAS BEEN PREPARED FROM WHICH IT IS S EEN THAT THE TRANSACTIONS OF PURCHASES, COUNTED MONTH-WISE, CAME TO 49 IN NUMBER DURING THE YEAR AND TRANSACTIONS OF SALES RE CKONED IN A SIMILAR MANNER CAME TO 43 IN NUMBER DURING THE YEAR . 12. IT SEEMS TO US FROM THE FACTS NOTED ABOVE THAT IT IS DIFFICULT TO UPHOLD THE CONCLUSION OF THE DEPARTMENTAL AUTHORITI ES THAT THE ASSESSEE HELD THE SHARES AS HER STOCK-IN-TRADE. IN THE ASSESSMENT YEAR 2004-05 THE ASSESSEE SOLD 30 SCRIPS AND EARNED CAPITAL GAINS OF RS.1.05 CRORES, WHICH WAS ACCEPTED BY THE AO AS SHORT TERM CAPITAL GAINS UNDER SECTION 143(3) OF THE ACT. SIM ILARLY IN THE ASSESSMENT YEAR 2007-08 ALSO THE CAPITAL GAINS OF R S.0.08 CRORES ON SALE OF 24 SCRIPS WAS TREATED AS SHORT TERM CAPI TAL GAINS BY THE AO IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3) OF THE ACT. THE CONDUCT OF THE AO ATTRACTS THE RULE OF CONSISTE NCY AND THIS PRINCIPLE CONSIDERED ALONG WITH THE OTHER FACTS FOU ND IN THE PRECEDING PARAGRAPH, PERSUADE US TO HOLD THAT THE S URPLUS ON THE SALE OF SHARES WAS RIGHTLY DECLARED BY THE ASSESSEE AS SHORT TERM CAPITAL GAINS. IN ADDITION TO THE SAME WE FIND THA T THE ATTEMPT OF THE CIT TO ASSESS THE LONG TERM CAPITAL GAINS FOR THE S AME YEAR AS BUSINESS PROFITS UNDER SECTION 263 OF THE ACT, ON T HE FOOTING THAT THE ASSESSEE IS A REGULAR TRADER IN SHARES AND SECURITI ES WAS ULTIMATELY DROPPED BY ORDER DATED 19.03.2010. IN THE NOTICE I SSUED ON 26.11.2009, THE CIT EXPRESSED THE VIEW THAT IF THE ASSESSEE IS TO BE ITA NO: 2735/MUM/2009 20 TREATED AS A REGULAR TRADER IN SHARES AND SECURITIE S, THE HOLDING PERIOD OF THE SHARES DOES NOT ALTER THE CHARACTER O F THE INCOME. IN OUR OPINION, THE APPROACH OF THE CIT, WITH RESPECT, REFLECTS THE CORRECT APPROACH TO BE ADOPTED IN SUCH CASES AND IT IS OF FUNDAMENTAL IMPORTANCE TO FIRST ASCERTAIN WHETHER T HE ASSESSEE IS A DEALER IN SHARES OR INVESTOR IN SHARES. THE CHARAC TER OR THE HEAD OF INCOME UNDER WHICH THE SURPLUS IS TO BE ASSESSED FO R PURPOSES OF THE INCOME TAX ACT GETS DETERMINED BY THE ANSWER TO THIS FUNDAMENTAL QUESTION. AS WE HAVE ALREADY NOTED THE RE ARE NO STRONG MATERIALS TO HOLD THAT THE ASSESSEE TRADED I N SHARES, WHEREAS THERE IS SUFFICIENT MATERIAL TO HOLD THAT S HE INVESTED IN SHARES AS INVESTOR AND NEVER INTENDED TO CARRY ON A BUSINESS IN SHARES. 13. FOR THE ABOVE REASONS WE ACCEPT THE CONTENTIONS OF THE ASSESSEE AND HOLD ON THE FACTS OF THE PRESENT CASE THAT THE SHORT TERM CAPITAL GAINS OF RS.2,25,47,992/- ON THE SALE OF SHARES AND MUTUAL FUND UNITS SHOULD BE ASSESSED AS SHORT TERM CAPITAL GAINS AS DECLARED BY THE ASSESSEE. THE APPEAL OF THE ASSESS EE IS ALLOWED WITH NO ORDER AS TO COSTS. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD JULY 2010. SD/- SD/- (B RAMAKOTAIAH) (R V EASWAR) ACCOUNTANT MEMBER PRESIDENT MUMBAI, DATED 23 RD JULY 2010 SALDANHA ITA NO: 2735/MUM/2009 21 COPY TO: 1. MS KARISHMA V SHAH CHANAKYA INTERNATIONAL PVT. LTD. 218/220, JAYWANT INDUSTRIAL ESTATE 63, TARDEO ROAD, MUMBAI 400 034 2. ADDITIONAL CIT, RANGE 16(1) 3. CIT-XVI 4. CIT(A)-XVI 5. DR A BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI