The ACIT, Circle-1, Bhavnagar V. Shri Kevat Jayantkumar Vanani, Bhavnagar

ITA 2914/AHD/2009

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9176 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2016
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 08-01-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 23-10-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Business income; Transactions in derivatives; Question of law
• Section: 234B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD , , BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER SL. NO(S) ITA NO(S) ASSESSMENT YEAR(S) APPEAL(S) BY APPELLANT VS. RESPONDENT APPELLANT RESPONDENT 1. 1737/AHD/2009 2006 - 07 THE ACIT, CIRCLE-1 BHAVNAGAR JAYANTKUMAR NANALAL PATEL (HUF) PLOT NO.2214/B/C/1, MANAN HILL DRIVE, BHAVNAGAR PAN: AACHJ 3084R 2. 1738/AHD/2009 2006 - 07 T HE ACIT CIR-1, BHAVNAGAR SHRI JAYANTKUMAR NANALAL PATEL -ADDRESS AS ABOVE- PAN:AAOPP 4655Q 3. 2914/AHD/2009 2006 - 07 THE A CIT CIR-1, BHAVNAGAR SHRI KEVAT J AYANT KUMAR VANANI -ADDRESS AS ABOVE- PAN: ACCPV 5148C 4. 3470 /AHD/20 10 2007 - 08 SHRI KEVAT JAYANTKUMAR VANANI,BHAVNGAR PAN: ACCPV 5148C THE ACIT CIRCLE-1 BHAVNAGAR 5. 3457/AHD/2010 2007 - 08 SHRI JAYANTKUMAR N.PATEL(HUF) PAN:AACHJ 3084R THE ACIT BHAVNAGAR RANGE-1 BHAVNAGAR 6. 3458/AHD/2010 2007 - 08 SHRI JAYANTKUMAR NANALAL PATEL PAN:AAOPP 4655Q THE ACIT BHAVNAGAR RANGE-1 BHAVNAGAR REVENUE BY : SHRI B.L.SHARMA, SR.DR ASSESSEE(S) BY : SHRI S.N. SOPARKAR, WITH MS.URVASHI SHODHAN, ARS ITA NO S.1737,1738,2914/AHD/2009 (BY REVENUE) ASST.YEARS 2006-07 3470, 3457 & 3458/AHD/2010 (BY ASSESSEES) ASST.YEARS 2007-08 - 2 - / DATE OF HEARING 08/01/2016 !' / DATE OF PRONOUNCEMENT 11/03/2016 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS BUNCH OF SIX APPEALS OUT OF WHICH THREE BY TH E REVENUE AND OTHER THREE BY THE DIFFERENT ASSESSEES ARE DIRECTE D AGAINST THE SEPARATE ORDERS OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS )-XX, AHMEDABAD (CIT(A) IN SHORT) PERTAINING TO ASSESSMENT YEARS (AYS) 2006-07 (BY ASSESSEE) & 2007-08 (BY REVENUE). SINCE COMMON ISS UES AND FACTS ARE INVOLVED IN THESE APPEALS, THESE WERE HEARD TOGETHE R AND ARE BEING DISPOSED OF BY WAY OF THIS CONSOLIDATED ORDER FOR T HE SAKE OF CONVENIENCE. 2. FIRST, WE TAKE UP THE REVENUES APPEAL IN ITA NO .1737/AHD/2009 FOR AY 2006-07. THE REVENUE HAS RAISED THE FOLLOWI NG GROUNDS OF APPEAL:- 1. THE LD.CIT(A)-XX, AHMEDABAD HAS ERRED IN LAW AND O N FACTS IN HOLDING THAT THE PROFIT ON SALE OF SHARES AMOUNT ING TO RS.20,27,822/- WHICH WERE HELD FOR LESS THAN 30 DAY S BY THE ASSESSEE IS TO TREATED AS SHORT TERM CAPITAL GAINS AS AGAINST THE BUSINESS INCOME TREATED BY THE AO, WITHOUT PROPERTY APPRECIATING THE FACTS OF THE CASE AND THE MATERIAL BROUGHT ON RECORD BY THE ASSESSING OFFICER. ITA NO S.1737,1738,2914/AHD/2009 (BY REVENUE) ASST.YEARS 2006-07 3470, 3457 & 3458/AHD/2010 (BY ASSESSEES) ASST.YEARS 2007-08 - 3 - 2. THE LD. CIT(A)-XX, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE PROFIT ON PURCHASE AND SALE OF SHARES AMOUNTING TO RS.24,17,976/- WHICH WERE HELD FOR LES S THAN 30 DAYS BY THE ASSESSEE IS TO BE TREATED AS SHORT TERM CAPITAL GAINS AS AGAINST THE BUSINESS INCOME TREATED BY THE AO WI THOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND THE MATERIAL BROUGHT ON RECORD BY THE ASSESSING OFFICER. 3. THE LD.CIT(A)-XX, AHMEDABAD HAS ERRED IN LAW AND O N FACTS IN HOLDING THAT THE PROFIT FROM F& O TRANSACTION OF RS.61,340/- IS TO BE TREATED AS SHORT TERM CAPITAL GAINS AS AGA INST THE BUSINESS INCOME TREATED BY THE AO, WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND THE MATERIAL BROUGHT ON RECORD BY THE ASSESSING OFFICER. 4.1 IN DOING SO, THE LD.CIT(A)-XX, AHMEDABAD HAS ER RED IN LAW AND ON FACTS IN NOT APPRECIATING THAT, TAKING INTO CONSIDERATION THE REGULARITY, FREQUENCY OF PURCHASE AND SALES AS WELL AS THE TRADING PATTERN, IT WAS CLEAR THAT THE ASSESSEE WAS DEALING IN SHARES NOT AS AN INVESTOR BUT AS A TRADER. 4.2 IN DOING SO, THE LD.CIT(A)-XX, AHMEDABAD HAS E RRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT, CONSIDERING THE SMALL PERIOD (LESS THAN 30 DAYS) FOR WHICH THE SAID SHARE S WERE HELD BY THE ASSESSEE, IT WAS CLEAR THAT THE UNDERLYING I NTENTION OF THE ASSESSEE WAS NOT TO PURCHASE THE SAID SHARES AS AN INVESTMENT FOR THE PURPOSE OF DERIVING ANY DIVIDEND INCOME FRO M THE SAME, BUT THE SAME WERE ACQUIRED AS STOCK IN TRADE WITH T HE INTENTION OF CARRYING OUT REGULAR BUSINESS IN SALE AND PURCHA SE OF SHARES. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD.CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE A.O. 6. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE CIT(A) BE SET ASIDE AND THAT OF A.O. BE RESTORED TO THE ABOVE EXTENT. ITA NO S.1737,1738,2914/AHD/2009 (BY REVENUE) ASST.YEARS 2006-07 3470, 3457 & 3458/AHD/2010 (BY ASSESSEES) ASST.YEARS 2007-08 - 4 - 3. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE AS SESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 15/12/2008, THEREBY THE ASSESSING OFFICER (AO IN SHORT) OBSERVE D THAT THE ASSESSEE HAS SHOWN SHORT TERM CAPITAL GAIN (STCG) OF RS.60,85,037/- AND GAIN FROM INVESTMENT IN MUTUAL F UNDS IS SHOWN AT RS.7,63,930/-. THE ASSESSEE HAS ALSO SHOWN INCOME FROM DEALING IN F&O AND THE INCOME FROM THIS IS SHOWN AT RS.61,340/-. THE AO OBSERVED THAT THE ASSESSEE HAS SHOWN GAIN FROM F&O AS SHORT TERM CAPITAL GAIN BUT F&O ARE NOT TREATED AS STCG OR LONG TERM CAPITAL GA IN (LTCG). CONSIDERING THE NATURE OF TRANSACTION OF F&O, THE I .T.ACT HAS BEEN AMENDED W.E.F. 01/04/2006 IN WHICH IT HAS BEEN SPEC IFICALLY MENTIONED THAT W.E.F. 01/04/2006, THE DEALING IN F&O WILL BE TREATED AS BUSINESS INCOME. HE FURTHER OBSERVED THAT FROM THE TRADING PATTERN, THE ASSESSEE IS A REGULAR DEALER IN SHARES AND SECURITIES AS WELL A S DERIVATIVE PRODUCTS. CONSIDERING THE REGULARITY, FREQUENCY OF PURCHASE A ND SALE OF SHARES, THE AO CAME TO THE CONCLUSION THAT THE ASSESSEE IS A RE GULAR DEALER OF SHARES AND CONSIDERING THIS ASPECT, THE PROFITS DERIVED IN SALE OF SHARES WITHIN 30 DAYS IS TREATED AS BUSINESS INCOME OF THE ASSESSE E. THE ASSESSEE BEING AGGRIEVED BY THE ASSESSMENT ORDER, PREFERRED AN APP EAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS A ND FOLLOWING THE ORDER DATED 24/10/2008 PERTAINING TO AY 2005-06, DI RECTED THE AO TO ITA NO S.1737,1738,2914/AHD/2009 (BY REVENUE) ASST.YEARS 2006-07 3470, 3457 & 3458/AHD/2010 (BY ASSESSEES) ASST.YEARS 2007-08 - 5 - TREAT THE SHARE TRANSACTIONS AS CAPITAL GAIN AND NOT AS BUSINESS INCOME. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), NOW THE RE VENUE IS IN APPEAL BEFORE US. 4. GROUND NOS.1 & 2 ARE WITH REGARD TO THE FINDING OF THE LD.CIT(A) THAT THE SHARES WHICH WERE HELD MORE THAN 30 DAYS B E TREATED AS SHORT TERM CAPITAL GAIN (STCG) TRANSACTIONS IN SHARES TRE ATED AS SHORT TERM CAPITAL GAIN (STCG) WHICH WERE HELD FOR LESS THAN 3 0 DAYS AS BUSINESS INCOME. THE LD.SR.DR SUPPORTED THE ORDER OF THE AO AND SUBMITTED THAT THE LD.CIT(A) WAS NOT JUSTIFIED IN TREATING THE SUR PLUS OUT OF THE SALE TRANSACTION AS CAPITAL GAIN. THE LD.SR.DR REIT ERATED THE SUBMISSIONS AS WERE MADE IN THE WRITTEN SYNOPSIS (IN REVENUES APP EAL IN ITA NO.2914/AHD/2009 FOR AY 2006-07 IN THE CASE OF KE VAT J.VANANI). THE LD.SR.DR SUBMITTED THAT THE ORDER OF THE LD.CIT (A) BE QUASHED AND THAT OF THE AO BE UPHELD. 4.1. ON THE CONTRARY, LD.SR.COUNSEL FOR THE ASSESSE E SHRI S.N. SOPARKAR VEHEMENTLY OPPOSED THE SUBMISSIONS OF THE REVENUE A ND SUBMITTED THAT THE AO WAS NOT JUSTIFIED IN TREATING THE SURPLUS AR ISING OUT OF THE SALE TRANSACTION AS BUSINESS INCOME. HE SUBMITTED TH AT UNDER THE FACTS AND SETTLED POSITION OF LAW, THE AUTHORITIES BELOW OUGH T TO HAVE ACCEPTED THE CLAIM OF THE ASSESSEE. THE LD.COUNSEL FOR THE ASSE SSEE SUBMITTED THAT THERE IS NO PROVISION UNDER THE ACT TO TREAT THE SU RPLUS ARISING OUT OF SALE ITA NO S.1737,1738,2914/AHD/2009 (BY REVENUE) ASST.YEARS 2006-07 3470, 3457 & 3458/AHD/2010 (BY ASSESSEES) ASST.YEARS 2007-08 - 6 - OF SHARES, EVEN IN THE CASE WHERE THE SALE-TRANSACT ION IS EFFECTED WITHIN 30 DAYS OF TRANSACTION. THE LD.COUNSEL FOR THE ASS ESSEE, IN SUPPORT THIS CONTENTION, RELIED ON THE ORDER OF THE COORDINATE B ENCH (ITAT C BENCH AHMEDABAD) RENDERED IN THE CASE OF SHRI KALPE SH C.SHAH VS. ACIT IN ITA NO.2818/AHD/2011 FOR AY 2008-09, DATED 31/10/2012 ALTHOUGH IN EARLIER YEAR, I.E. 2005-06 THE LD.COUNS EL FOR THE ASSESSEE SUBMITTED THAT THE TRIBUNAL HAD DIRECTED THE AO FOR TREATING SUCH PROFIT ARISING ON SALE OF SHARES HELD FOR LESS THAN 30 DAY S AS BUSINESS INCOME WITH A RIDER THAT HE WOULD ALLOW REASONABLE AMOUNT OF EXPENSES ON PRO RATA BASIS AGAINST SUCH BUSINESS INCOME. THE LD.C OUNSEL FOR THE ASSESSEE FURTHER RELIED ON THE JUDGEMENT OF HONBLE JURISDIC TIONAL HIGH COURT RENDERED IN TAX APPEAL NOS.77 OF 2010 WITH TAX APPE AL NO.78 OF 2010, DATED 27/06/2012 IN THE CASE OF CIT VS. VAIBHAV J. SHAH (HUF). 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. GROUND NOS.1 & 2 ARE WITH REGARD TO THE FINDING OF THE LD.CIT(A) THAT THE SHARES WHICH WERE HELD MORE THAN 30 DAYS BE TREATED AS STCG. THE LD.SR.DR HAS SUPPORTED THE ORDER OF THE AO WHO HAD TREATED THE SURPLUS AS BUSINESS INCOME ARISING OUT OF SALE OF SHARES. HOWEVER, THE LD.CIT(A) HAS FOLLOWED THE DECISION OF 2005-06. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE ASSESSEE IS A SHIP-BREAKER AND E XPORTERS OF DIAMOND. ITA NO S.1737,1738,2914/AHD/2009 (BY REVENUE) ASST.YEARS 2006-07 3470, 3457 & 3458/AHD/2010 (BY ASSESSEES) ASST.YEARS 2007-08 - 7 - TRADING INTO SHARES IS NOT A REGULAR BUSINESS. DUR ING THE YEAR, THE ASSESSEE HAD PURCHASED 46 SCRIPTS OF SHARES AND AVE RAGE HOLDING PERIOD WAS 111 DAYS. THERE IS NO DAY-TO-DAY TRANSACTION I N SHARE TRADING. THE ASSESSEE HAS NOT INVESTED BORROWED CAPITAL IN ACQUI RING THE SHARES. THEREFORE, UNDER THESE FACTS, THE AO WAS NOT JUSTIF IED IN COMING TO THE CONCLUSION THAT THE ASSESSEE IS A REGULAR DEALER IN SHARES AND SECURITIES AS WELL AS DERIVATIVE PRODUCTS. THE ASSESSEE HAS MADE INVESTMENT THROUGH IPOS. THEREFORE, CONSIDERING THE TOTALITY OF THE F ACTS OF THE CASE, THE AOS FINDING CANNOT BE SUSTAINED. HENCE, GROUND NO S.1 & 2 OF THE REVENUES APPEAL ARE DISMISSED. 6. GROUND NO.3 OF REVENUES APPEAL IS AGAINST HOLDI NG THE PROFIT FROM F&O TRANSACTION OF RS.61,340/- IS TO BE TREATE D AS SHORT TERM CAPITAL GAINS AS AGAINST THE BUSINESS INCOME TREATED BY THE AO. 6.1. AT THE TIME OF HEARING, THE LD.COUNSEL FOR THE ASSESSEE FAIRLY CONCEDED THAT THE TRANSACTION IN F&O IS RIGHTLY TRE ATED AS BUSINESS INCOME. THEREFORE, WE SET ASIDE THE ORDER OF THE L D.CIT(A) ON THIS ISSUE AND SUSTAIN THE FINDING OF THE AO TREATING THE TRAN SACTION IN F&O AS BUSINESS TRANSACTION. THUS, GROUND NO.3 RAISED BY THE REVENUE IS ALLOWED. ITA NO S.1737,1738,2914/AHD/2009 (BY REVENUE) ASST.YEARS 2006-07 3470, 3457 & 3458/AHD/2010 (BY ASSESSEES) ASST.YEARS 2007-08 - 8 - 7. GROUND NOS.4.1 & 4.2 ARE ARGUMENTATIVE IN NATURE AND SUPPORT OF GROUND NOS.1 & 2. IN VIEW OF OUR ABOVE DECISION IN RESPECT OF GROUND NOS.1 & 2, THESE GROUNDS ARE ALSO DISMISSED. 8. GROUND NOS.5 & 6 ARE GENERAL IN NATURE WHICH REQ UIRE NO INDEPENDENT ADJUDICATION. 9. IN THE RESULT, REVENUES APPEAL IN ITA NO.1737/ AHD/2009 FOR AY 2006-07 IS PARTLY ALLOWED. 10. NOW, WE TAKE UP THE REVENUES APPEAL IN THE C ASE OF SHRI JAYANTKUMAR NANALAL PATEL(IND.) IN ITA NO.1738/AHD/ 2009 FOR AY 2006-07. THE FOLLOWING GROUNDS HAVE BEEN RAISED B Y THE REVENUE:- 1. THE LD.CIT(A)-XX, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE PROFIT ON SALE OF SHARES AMOUNTING TO RS.34,25,656/- WHICH WERE HELD FOR LESS THAN 30 DAY S BY THE ASSESSEE IS TO TREATED AS SHORT TERM CAPITAL GAINS AS AGAINST THE BUSINESS INCOME TREATED BY THE AO, WITHOUT PROPERTY APPRECIATING THE FACTS OF THE CASE AND THE MATERIAL BROUGHT ON RECORD BY THE ASSESSING OFFICER. 2. THE LD. CIT(A)-XX, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE PROFIT ON PURCHASE AND SALE OF SHARES AMOUNTING TO RS.4,12,038/- WHICH WERE HELD FOR LES S THAN 30 DAYS BY THE ASSESSEE IS TO BE TREATED AS SHORT TERM CAPITAL GAINS AS AGAINST THE BUSINESS INCOME TREATED BY THE AO WI THOUT ITA NO S.1737,1738,2914/AHD/2009 (BY REVENUE) ASST.YEARS 2006-07 3470, 3457 & 3458/AHD/2010 (BY ASSESSEES) ASST.YEARS 2007-08 - 9 - PROPERLY APPRECIATING THE FACTS OF THE CASE AND THE MATERIAL BROUGHT ON RECORD BY THE ASSESSING OFFICER. 3. THE LD.CIT(A)-XX, AHMEDABAD HAS ERRED IN LAW AND O N FACTS IN HOLDING THAT THE PROFIT FROM F& O TRANSACTION OF RS.16,42,372/- IS TO BE TREATED AS SHORT TERM CAPIT AL GAINS AS AGAINST THE BUSINESS INCOME TREATED BY THE AO, WITH OUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND THE MATERIAL BROUGHT ON RECORD BY THE ASSESSING OFFICER. 4.1 IN DOING SO, THE LD.CIT(A)-XX, AHMEDABAD HAS ER RED IN LAW AND ON FACTS IN NOT APPRECIATING THAT, TAKING INTO CONSIDERATION THE REGULARITY, FREQUENCY OF PURCHASE AND SALES AS WELL AS THE TRADING PATTERN, IT WAS CLEAR THAT THE ASSESSEE WAS DEALING IN SHARES NOT AS AN INVESTOR BUT AS A TRADER. 4.2 IN DOING SO, THE LD.CIT(A)-XX, AHMEDABAD HAS E RRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT, CONSIDERING THE SMALL PERIOD (LESS THAN 30 DAYS) FOR WHICH THE SAID SHARE S WERE HELD BY THE ASSESSEE, IT WAS CLEAR THAT THE UNDERLYING I NTENTION OF THE ASSESSEE WAS NOT TO PURCHASE THE SAID SHARES AS AN INVESTMENT FOR THE PURPOSE OF DERIVING ANY DIVIDEND INCOME FRO M THE SAME, BUT THE SAME WERE ACQUIRED AS STOCK IN TRADE WITH T HE INTENTION OF CARRYING OUT REGULAR BUSINESS IN SALE AND PURCHA SE OF SHARES. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD.CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE A.O. 6. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE CIT(A) BE SET ASIDE AND THAT OF A.O. BE RESTORED TO THE ABOVE EXTENT. 10.1. SINCE IT WAS A COMMON POINT BETWEEN THE PARTI ES THAT THE FACTS AND CIRCUMSTANCES IN THE PRESENT CASE ARE ALSO IDENTIC AL TO THOSE CONSIDERED BY US IN THE CASE OF JAYANTKUMAR NANALAL PATEL(HUF) IN ITA NO.1737/AHD/2009 FOR AY 2006-07(SUPRA), THEREFORE F OLLOWING THE SAID PRECEDENT, THE PRESENT APPEAL OF THE REVENUE IN THE CASE OF SHRI ITA NO S.1737,1738,2914/AHD/2009 (BY REVENUE) ASST.YEARS 2006-07 3470, 3457 & 3458/AHD/2010 (BY ASSESSEES) ASST.YEARS 2007-08 - 10 - JAYANTKUMAR NANALAL PATEL IS ALSO DECIDED ACCORDING LY. THUS, GROUND NOS.1 & 2 ARE REJECTED AND GROUND NO.3 IS ALLOWED. GROUND NOS. 4.1. & 4.2 ARE ARGUMENTATIVE IN NATURE AND IN SUPPORT OF G ROUND NOS.1 & 2. IN VIEW OF OUR ABOVE DECISION IN RESPECT OF GROUND NOS .1 & 2, THESE GROUNDS ARE ALSO DISMISSED. GROUND NOS.5 & 6 ARE GENERAL I N NATURE WHICH REQUIRE NO INDEPENDENT ADJUDICATION. AS A RESULT, REVENUES APPEAL, I.E. ITA NO.1738/AHD/2009 FOR AY 2006-07 IS PARTLY ALLO WED. 11. NOW, WE TAKE UP THE REVENUES APPEAL IN THE CA SE OF SHRI KEVAT JAYANTKUMAR VANANI IN ITA NO.2914/AHD/2009 FOR AY 2 006-07. THE FOLLOWING GROUNDS HAVE BEEN RAISED BY THE REVENUE:- 1. THE LD.CIT(A)-XX, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE INCOME DECLARED BY THE ASSESSEE ON ACCOUNT OF SHORT TERM CAPITAL GAINS FROM SHARES AND MUTUAL FUN D IS TO BE TREATED AS SHORT TERM CAPITAL GAINS AS AGAINST THE BUSINESS INCOME TREATED BY THE ASSESSING OFFICER, WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND THE MATERIAL BROUGHT ON RECOR D BY THE ASSESSING OFFICER. 1.2 IN DOING SO, THE LD.CIT(A) HAS ERRED IN LAW A ND ON FACTS IN NOT APPRECIATING THE RATIO OF THE RULING GIVEN BY T HE AAR AND THE OTHER JUDICIAL DECISIONS RELIED UPON BY THE AO IN T HE ASSESSMENT ORDER. 1.3 IN DOING SO, THE LD.CIT(A) HAS ERRED IN LAW A ND ON FACTS IN OBSERVING THAT THE PURCHASE AND SALE OF SECURITIES BY THE ASSESSEE ITA NO S.1737,1738,2914/AHD/2009 (BY REVENUE) ASST.YEARS 2006-07 3470, 3457 & 3458/AHD/2010 (BY ASSESSEES) ASST.YEARS 2007-08 - 11 - WAS ONLY ON INDEPENDENT OCCASIONAL ACTIVITY WITHOUT APPRECIATING THAT, TAKING INTO CONSIDERATION THE REGULARITY AND THE FREQUENCY OF THE TRANSACTIONS AS WELL AS THE TRADING PATTERN, IT WAS CLEAR THAT THE ASSESSEE WAS DEALING SHARES NOT AS AN INVESTOR BUT AS A TRADER. 1.4. IN DOING SO, THE LD.CIT(A)-XX, AHMEDABAD HAS E RRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT, CONSIDERING THE SMALL PERIOD FOR WHICH THE SAID SHARES WERE HELD BY THE ASSESSEE , IT WAS CLEAR THAT THE UNDERLYING INTENTION OF THE ASSESSEE WAS N OT TO PURCHASE THE SAID SHARES AS AN INVESTMENT FOR THE PURPOSE OF DERIVING ANY DIVIDEND INCOME FROM THE SAME, BUT THE SAME WERE AC QUIRED AS STOCK IN TRADE WITH THE INTENTION OF CARRYING OUT R EGULAR BUSINESS IN SALE AND PURCHASE OF SHARES. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD.CIT(A)-XX, AHMEDABAD OUGHT TO HAVE UPHELD THE OR DER OF THE AO. 3. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE C IT(A)-XX, AHMEDABAD BE SET ASIDE AND THAT OF A.O. BE RESTORED TO THE ABOVE EXTENT. 11.1. IN THIS REVENUES APPEAL (IN THE CASE OF SHJR I KEVAT JAYANTKUMAR VANANI) ALSO, THE FACTS ARE IDENTICAL TO THE FACTS AS WERE IN THE CASE OF JAYANTKUMAR NANALAL PATEL (HUF) IN ITA NO.1737/AHD/ 2009 FOR AY 2006-07(SUPRA). ITA NO S.1737,1738,2914/AHD/2009 (BY REVENUE) ASST.YEARS 2006-07 3470, 3457 & 3458/AHD/2010 (BY ASSESSEES) ASST.YEARS 2007-08 - 12 - 11.2. WE HAVE HEARD THE PARTIES AND PERUSAL THE MAT ERIAL AVAILABLE ON RECORD. WE FIND THAT THE LD.CIT(A) HAS GIVEN FINDI NG IN HIS ORDER, AS UNDER:- THE ASSESSING OFFICER HAS EMPHASIZED THAT THE APPE LLANT HAD MADE SEVERAL APPLICATIONS IN MANY IPOS AS HIGH NET WORTH INDIVIDUAL AND UPON ALLOTMENT, THE SHARES WERE SOLD OFF IN FEW DAY S. HENCE, THE TRANSACTIONS SHOULD BE TERMED AS BUSINESS. THE FAC T REMAINS THAT A TRADER, IN NORMAL CIRCUMSTANCES, WILL NOT MAKE AN A PPLICATION FOR ALLOTMENT OF SHARES, MAKE HUGE PAYMENT, WAIT FOR 20 -25 DAYS AND THEN GET ALLOTMENT OF ONLY FEW SHARES (MAY BE 1 TO 10% O F THE TOTAL SHARES APPLIED) AND WHILE THE BALANCE AMOUNT IS REFUNDED. THE WHOLE CYCLE TAKES AROUND 30 DAYS. A TRADER WOULD NORMALLY PURC HASE SCRIPTS FROM THE SECONDARY MARKET AS DELIVERY IS ASSURED FOR THE AMOUNT PAID AND IS RECEIVED IMMEDIATELY. ALSO THAT, A TRADER NORMALLY DOES NOT INVEST IN MUTUAL FUNDS. A MUTUAL FUND IS A TRUST THAT POOLS HE SAVINGS OF A NUMBER OF INVESTORS WHO SHARE A COMMON FINANCIAL GO AL. THE MONEY, THUS, COLLECTED IS THEN INVESTED IN CAPITAL MARKET INSTRUMENTS SUCH AS SHARES, DEBENTURES AND OTHER SECURITIES. THE INCOM E EARNED THROUGH THESE INVESTMENTS AND THE CAPITAL APPRECIATIONS REA LIZED ARE SHARED BY ITS UNIT HOLDERS IN PROPORTION TO THE NUMBER OF UNI TS OWNED BY THEM. THUS, A MUTUAL FUND IS THE MOST SUITABLE INVESTMENT FOR THE COMMON MAN AS IT OFFERS AN OPPORTUNITY TO INVEST IN A DIVE RSIFIED, PROFESSIONALLY MANAGED BASKET OF SECURITIES AT A RELATIVELY LOW CO ST. CONSIDERING ALL THE CRITERIA LAID DOWN BY THE CBDT, REFLECTION OF INVESTMENTS IN BOOKS, JUDICIAL PRONOUNCEMENTS AND T OALITY OF THE FACT, I AM OF THE VIEW THAT THE INCOME DECLARED BY THE APPE LLANT ON ACCOUNT OF SHORT TERM CAPITAL GAINS FROM SHARES AND MUTUAL FUN D DESERVES TO BE TREATED AS SHORT TERM CAPITAL GAIN AS AGAINST BUSIN ESS INCOME AS TREATED BY THE ASSESSING OFFICER. THE ASSESSING OF FICER IS, THEREFORE, DIRECTED TO TREAT THE PROFIT EARNED FROM ABOVE DISC USSED SHARE TRANSACTIONS AND MUTUAL FUND AS SHORT TERM CAPITAL GAIN AND NOT BUSINESS INCOME. ITA NO S.1737,1738,2914/AHD/2009 (BY REVENUE) ASST.YEARS 2006-07 3470, 3457 & 3458/AHD/2010 (BY ASSESSEES) ASST.YEARS 2007-08 - 13 - 11.3. THE ABOVE FINDING OF THE LD.CIT(A) IS NOT CO NTROVERTED BY THE REVENUE BY PLACING ANY CONTRARY-MATERIAL ON RECORD. THEREFORE, WE DO NOT SEE ANY GOOD REASON TO INTERFERE INTO THE SAME. THE FINDING OF THE LD.CIT(A) IS HEREBY UPHELD AND THE GROUND RAISED IN THE APPEAL IS DISMISSED. 12. IN THE RESULT, THE REVENUES APPEAL IN ITA NO. 1737/AHD/2009 AND ITA NO.1738/AHD/2009 ARE PARTLY ALLOWED AND ITA NO. 2914/AHD/2009 IS DISMISSED. 13. NOW, WE LEFT WITH US FOR ADJUDICATION OF ASSES SEES APPEALS; I.E. ITA NO.3470/AHD/2010 FOR AY 2007-08 (SHRI KEVAT JAY ANTKUMAR VANANI), ITA NO.3457/AHD/2010 FOR AY 2007-08 (SHRI JAYANTKUMAR N.PATEL-HUF) AND ITA NO.3458/AHD/2010 FOR AY 2007-0 8 (SHRI JAYANTKUMAR NANALAL PATEL). [A] IN ITA NO.3470/AHD/2010, THE FOLLOWING GROUND HAS BEEN RAISED BY THE ASSESSEE: THE HONBLE CIT(A) HAS ERRED IN - 1. HOLDING THAT WHENEVER THE APPELLANT HAS HELD THE S HARES FOR LESS THAN 30 DAYS, THE INCOME ARISING ON TRANSF ER OF SUCH SHARES SHOULD BE TREATED AS BUSINESS INCOME. ITA NO S.1737,1738,2914/AHD/2009 (BY REVENUE) ASST.YEARS 2006-07 3470, 3457 & 3458/AHD/2010 (BY ASSESSEES) ASST.YEARS 2007-08 - 14 - THE ASSESSEE CRAVES LEAVE TO ADD, AMEND, DELETE OR ALTER ONE OR MORE GROUNDS OF APPEAL. [B] IN ITA NO.3457/AHD/2010, THE FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESSEE: THE HONBE CIT(A) HAS ERRED IN - 1. HOLDING THAT WHENEVER THE APPELLANT HAS HELD THE SHARES FOR LESS THAN 30 DAYS, THE INCOME ARISING ON TRANSFER OF SUCH SHARES SHOULD BE TREATED AS BUSINE SS INCOME. 2. CONFIRMING THE ACTION OF THE AO TO CHARGE INTEREST UNDER SECTION 234B OF THE ACT. THE ASSESSEE CRAVES LEAVE TO ADD, AMEND, DELETE OR ALTER ONE OR MORE GROUNDS OF APPEAL. [C] IN ITA NO.3458/AHD/2010, THE FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESSEE: THE HONBLE CIT(A) HAS ERRED IN - 1. HOLDING THAT WHENEVER THE APPELLANT HAS HELD THE S HARES FOR LESS THAN 30 DAYS, THE INCOME ARISING ON TRANSF ER OF SUCH SHARES SHOULD BE TREATED AS BUSINESS INCOME. 2. CONFIRMING THE ACTION OF THE AO TO CHARGE INTEREST UNDER SECTION 234B OF THE ACT. THE ASSESSEE CRAVES LEAVE TO ADD, AMEND, DELETE OR ALTER ONE OR MORE GROUNDS OF APPEAL. ITA NO S.1737,1738,2914/AHD/2009 (BY REVENUE) ASST.YEARS 2006-07 3470, 3457 & 3458/AHD/2010 (BY ASSESSEES) ASST.YEARS 2007-08 - 15 - 13.1. THE COMMON ISSUE TO BE ADJUDICATED IN RESPEC T OF GROUND NO.1 IN ALL THESE APPEALS IS WHETHER THE LD.CIT(A) WAS JUST IFIED IN HOLDING THAT WHENEVER THE APPELLANT HAS HELD SHARES FOR LESS THA N 30 DAYS, THE INCOME ARISING ON SUCH TRANSFER OF SUCH SHARES SHOULD BE T REATED AS BUSINESS INCOME. 13.2. THE LD.SR.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD.CIT(A) ERRED IN TREATING THE SURPLUS ARISING OUT OF TRANSF ER OF SHARES HELD BY THE ASSESSEE FOR LESS THAN 30 DAYS ON BUSINESS INCOME. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT IT APPEARS THAT THE LD.CIT( A) HAS FOLLOWED THE DECISION OF THIS TRIBUNAL RENDERED IN THE CASE OF S UGAMCHAND C.SHAH VS. ACIT. HE SUBMITTED THAT IT IS NOW WELL-SETTLED BY THE DECISION OF THIS TRIBUNAL AS WELL AS THE JUDGEMENT OF HONBLE HIGH C OURT THAT THERE IS NO PROVISION UNDER THE LAW FOR TREATING THE SURPLUS AR ISING OUT OF TRANSFER OF SHARES HELD BY THE APPELLANT FOR LESS THAN 30 DAYS. IN SUPPORT OF THIS CONTENTION, LD.COUNSEL HAS PLACED RELIANCE ON THE D ECISION OF THE COORDINATE BENCH IN THE CASE OF SHRI KALPESH C.SHAH VS. ACIT IN ITA NO.2818/AHD/2011 AND ALSO THE JUDGEMENT OF THE HON BLE JURISDICTIONAL HIGH COURT RENDERED IN THE CASE OF CIT VS. VAIBHAV J.SHAH (HUF) IN TAX APPEAL NO.77 OF 2010 ALONGWITH TAX APPEAL NO.78 OF 2010 DATED 27/06/2012. ITA NO S.1737,1738,2914/AHD/2009 (BY REVENUE) ASST.YEARS 2006-07 3470, 3457 & 3458/AHD/2010 (BY ASSESSEES) ASST.YEARS 2007-08 - 16 - 13.3. ON THE CONTRARY, LD.DEPARTMENTAL REPRESENTATI VE SUPPORTED THE ASSESSMENT ORDER AND ORDER OF LD.CIT(A). 14. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THERE IS NO DISPUTE WITH REGARD TO THE FACTS THAT T HE AO HAS TREATED THE SURPLUS ARISING OUT OF TRANSFER OF SHARES SOLELY ON THE GROUND THAT SUCH SHARES WERE HELD BY THE APPELLANT FOR THE PERIOD OF LESS THAN 30 DAYS. THE LD.COUNSEL FOR THE ASSESSEE HAS PLACED RELIANCE ON THE DECISION OF THE COORDINATE BENCH IN THE CASE OF SHRI KALPESH C.SHAH , WHEREIN THE TRIBUNAL HAS HELD AS UNDER:- 7. HEARD BOTH THE PARTIES AND PERUSED THE RECORD. WE FIND THAT ASSESSEE HAS SHOWN SHORT-TERM CAPITAL GAIN OF RS.8, 08,357/- ON SALE OF SHARES AND MUTUAL FUNDS. THE A.O. HAS TREA TED THIS AS BUSINESS INCOME. WE FURTHER FIND THAT THERE IS NO DISPUTE THAT THE INVESTMENT MADE IN SHARES AND MUTUAL FUNDS HAVE BEE N SHOWN BY THE ASSESSEE IN THE BALANCE-SHEET UNDER THE HEAD I NVESTMENT AND FOR MAKING THIS INVESTMENT ASSESSEE HAS NOT BORROWE D ANY FUND. FOR DECIDING THE ISSUE WHETHER THE SHORT-TERM CAPIT AL GAIN SHOWN BY THE ASSESSEE CAN BE TAXED AS BUSINESS INCOME, TH ERE ARE VARIOUS CRITERIA/FACTORS WHICH HAVE TO BE TAKEN INTO ACCOUN T. ONE OF THE CRITERION IS THE INTENTION OF THE ASSESSEE AT THE T IME OF PURCHASE OF SHARES WHICH IS CLEAR IN THIS CASE THAT ASSESSEE PU RCHASED THE SHARES FOR INVESTMENT. OTHER CRITERION IS WHETHER THE ASSESSEE HAS BORROWED FUNDS TO PURCHASE THE SHARES. IN THIS CAS E THE ASSESSEE DID NOT BORROW ANY MONEY FOR MAKING INVESTMENT IN S HARES AND MUTUAL FUNDS. WE FURTHER FIND THAT WHEN ASSESSEE W AS ASKED ITA NO S.1737,1738,2914/AHD/2009 (BY REVENUE) ASST.YEARS 2006-07 3470, 3457 & 3458/AHD/2010 (BY ASSESSEES) ASST.YEARS 2007-08 - 17 - DURING THE HEARING BEFORE US AS TO HOW THE ASSESSEE HAS TREATED SIMILAR TRANSACTIONS IN EARLIER AND SUBSEQUENT YEAR , THE ASSESSEE FILED COPIES OF COMPUTATION OF EARLIER AND SUBSEQUE NT YEARS TO SHOW THAT IN THOSE YEARS ALSO ASSESSEE HAS SHOWN SH ORT-TERM CAPITAL GAIN FROM SALE OF SHARES AND MUTUAL FUNDS W HICH WERE HELD BY HIM FOR LESS THAN 12 MONTHS AND HAS NEVER SHOWN BUSINESS INCOME FROM SALE OF SHARES. WHILE GOING THROUGH TH E COMPUTATION OF INCOME FOR SUBSEQUENT ASSESSMENT YEAR WE FIND TH AT THOUGH ASSESSEE SUFFERED LOSS ON SALE OF SHARES, THE SAME HAS BEEN SHOWN AS SHORT-TERM CAPITAL LOSS AND THE SAME WAS CARRIED FORWARD TO THE NEXT YEAR INSTEAD OF TREATING THE SAME AS BUSINESS LOSS AND TAKING ADVANTAGE OF THIS BY WAY OF REDUCING THE INCOME OF THAT YEAR. THUS THE INTENTION OF THE ASSESSEE IS CLEAR THAT HE HAS TREATED INVESTMENT IN SHARES AS INVESTMENT AND NOT FOR THE PURPOSE O F TRADE. THE REVENUE HAS NOT BROUGHT ANY MATERIAL TO SHOW THAT A SSESSEE HAS INVESTED IN SHARES FOR TRADE. WE FURTHER FIND TH AT REVENUE HAS NOT FILED ANY APPEAL AGAINST THE ORDER OF LD.CIT(A) TREATING THE INVESTMENT OF ASSESSEE IN SHARES FOR MORE THAN 30 D AYS AND LESS THAN 12 MONTHS AS INVESTMENT IN SHORT-TERM ASSET. THERE IS NO PROVISION UNDER THE ACT TO INDICATE THAT THE HOLDIN G PERIOD OF 30 DAYS IS RELEVANT TO DECIDE WHETHER ANY TRANSACTION IS MADE FOR INVESTMENT OR FOR TRADING. THEREFORE, WE HAVE NO H ESITATION IN HOLDING THAT THE LD.CIT(A) WAS NOT JUSTIFIED IN TRE ATING THE SURPLUS ARISING OUT OF SALE OF SHARES HELD FOR THE PERIOD O F LESS THAN 30 DAYS AS BUSINESS INCOME INSTEAD OF SHORT-TERM CAPIT AL GAIN SHOWN BY THE ASSESSEE. THE ORDER PASSED BY HIM TO THIS E FFECT IS SET SIDE AND THE A.O. IS DIRECTED TO ACCEPT THE SHORT-TERM C APITAL GAIN OF RS.8,08,357/- ON SALE OF SHARES AND MUTUAL FUNDS SH OWN BY ASSESSEE IN HIS RETURN OF INCOME. THIS GROUND OF T HE ASSESSEE IS ALLOWED. ITA NO S.1737,1738,2914/AHD/2009 (BY REVENUE) ASST.YEARS 2006-07 3470, 3457 & 3458/AHD/2010 (BY ASSESSEES) ASST.YEARS 2007-08 - 18 - 14.1. THE HONBLE JURISDICTIONAL HIGH COURT HAS AFF IRMED THAT VIEW IN THE CASE OF VAIBHAV J.SHAH (HUF)[SUPRA], BY HOLDING AS UNDER:- 8. A DIVISION BENCH OF THIS COURT IN COMMISSIONER OF INCOME-TAX V. REWASHANKER A. KOTHARI (2006) 283 ITR 338 (GUJ.) HAS LAID DOWN THE FOLLOWING TEST FOR DETERMINING THE QUESTION AS TO WHETHER AN ASSESSEE CAN BE SAID TO BE CARRYING ON BUSINESS. SUCH TESTS LAID DOWN BY THIS COURT ARE RE PRODUCED BELOW:- '[A] THE FIRST TEST IS WHETHER THE INITIAL ACQUISIT ION OF THE SUBJECT MATTER OF TRANSACTION WAS WITH THE INTENTION OF DEALING IN TH E ITEM, OR WITH A VIEW TO FINDING AN INVESTMENT. IF THE TRANSACTION, SINCE THE INCEPTION , APPEARS TO BE IMPRESSED WITH THE CHARACTER OF A COMMERCIAL TRANSACTION ENTERED INTO WITH A VIEW TO EARN PROFIT, IT WOULD FURNISH A VALUABLE GUIDELINE. [B] THE SECOND TEST THAT IS OFTEN APPLIED IS AS TO WHY AND HOW AND FOR WHAT PURPOSE THE SALE WAS EFFECTED SUBSEQUENTLY. [C] THE THIRD TEST, WHICH IS FREQUENTLY APPLIED, IS AS TO HOW THE ASSESSEE DEALT WITH THE SUBJECT MATTER OF TRANSACTION DURING THE T IME THE ASSET WAS WITH THE ASSESSEE. HAS IT BEEN TREATED AS STOCK-IN-TRADE, OR HAS IT BEEN SHOWN IN THE BOOKS OF ACCOUNT AND BALANCE SHEET AS AN INVESTMENT . THIS INQUIRY, THOUGH RELEVANT, IS NOT CONCLUSIVE. [D] THE FOURTH TEST IS AS TO HOW THE ASSESSEE HIMSE LF HAS RETURNED THE INCOME FROM SUCH ACTIVITIES AND HOW THE DEPARTMENT HAS DEALT WI TH THE SAME IN THE COURSE OF PRECEDING AND SUCCEEDING ASSESSMENTS. THIS FACTOR, THOUGH NOT CONCLUSIVE, CAN AFFORD GOOD AND COGENT EVIDENCE TO JUDGE THE NATURE OF TRA NSACTION AND WOULD BE A RELEVANT CIRCUMSTANCE TO BE CONSIDERED IN ABSENCE OF ANY SAT ISFACTORY EXPLANATION. [E] THE FIFTH TEST, NORMALLY APPLIED IN CASES OF PA RTNERSHIP FIRMS AND COMPANIES, IS WHETHER THE DEED OF PARTNERSHIP OR THE MEMORANDUM O F ASSOCIATION, AS THE CASE MAY BE, AUTHORITIES SUCH AN ACTIVITY. [F] THE LAST BUT NOT THE LEAST, RATHER THE MOST IMP ORTANT TEST, IS AS TO THE VOLUME, FREQUENCY, CONTINUITY AND REGULARITY OF TRANSACTION S OF PURCHASE AND SALE OF THE GOODS CONCERNED. IN A CASE WHERE THERE IS REPETITIO N AND CONTINUITY, COUPLED WITH THE MAGNITUDE OF THE TRANSACTION, BEARING REASONABLE PR OPORTION TO THE STRENGTH OF ITA NO S.1737,1738,2914/AHD/2009 (BY REVENUE) ASST.YEARS 2006-07 3470, 3457 & 3458/AHD/2010 (BY ASSESSEES) ASST.YEARS 2007-08 - 19 - HOLDING, THEN AN INFERENCE CAN READILY BE DRAWN THA T THE ACTIVITY IS IN THE NATURE OF BUSINESS.' 9. IN VIEW OF THE AFORESAID DECISIONS OF THE APEX C OURT AS WELL AS OF THIS COURT, IT IS CLEAR THAT WHERE NUMBER OF TRANSACTIONS OF SALE AND PURCHASE OF SHARES TAKES PLACE, THE MOST IMPORTANT TEST IS THE VOLUME, FREQUENCY, C ONTINUITY AND REGULARITY OF TRANSACTIONS OF PURCHASE AND SALE OF THE SHARES. HO WEVER, WHERE THERE IS REPETITION AND CONTINUITY, COUPLED WITH MAGNITUDE OF THE TRANS ACTION, BEARING REASONABLE PROPORTION TO THE STRENGTH OF HOLDING, THEN AN INFE RENCE CAN BE DRAWN THAT ACTIVITY IS IN THE NATURE OF BUSINESS. LEARNED COUNSEL FOR THE REVENUE FROM THE RECORDS COULD NOT DEMONSTRATE THAT THERE WERE LARGE NUMBER OF TRANSAC TIONS WHICH HAD FREQUENCY, VOLUME, CONTINUITY AND REGULARITY AND FELL WITHIN T HE TESTS LAID DOWN BY THE DIVISION BENCH OF THIS COURT. 10. FOR THE AFORESAID REASONS, WE ARE OF THE CONSID ERED OPINION THAT THE INCOME EARNED BY THE ASSESSEE FROM TRADING IN THE SHARES U NDER THE HEAD LONG TERM CAPITAL GAIN / SHORT TERM CAPITAL GAIN WAS CORRECTLY 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 DO NOT FIND ANY ERROR O R IRREGULARITY IN THE IMPUGNED ORDER PASSED BY THE TRIBUNAL. THE SUBSTANTIAL QUESTION OF LAW FRAMED BY THIS COUR T AS MENTIONED ABOVE IS ANSWERED IN THE AFFIRMATIVE A ND AGAINST THE REVENUE. BOTH THESE TAX APPEALS ARE ACCORDINGLY DISMISSED. 14.2. THEREFORE, IN VIEW OF THE ABOVE JUDGEMENT, TH E ACTION OF AO CANNOT BE SUSTAINED. ACCORDINGLY, THE AO IS HEREBY DIRECTED THE AO TO DELETE THE ADDITION. THIS COMMON GROUND NO.1 RAISE D IN THESE APPEALS ARE ALLOWED. 14.3. AS REGARDS COMMON GROUND NO.2 IN THESE APPEAL S IS AGAINST THE CHARGING OF INTEREST. THE CHARGING OF INTEREST BEI NG CONSEQUENTIAL, SO HELD ACCORDINGLY. THUS, COMMON GROUND NO.2 IN THES E APPEALS IS AGAINST ITA NO S.1737,1738,2914/AHD/2009 (BY REVENUE) ASST.YEARS 2006-07 3470, 3457 & 3458/AHD/2010 (BY ASSESSEES) ASST.YEARS 2007-08 - 20 - THE CHARGING OF INTEREST. THE CHARGING OF INTEREST BEING CONSEQUENTIAL, SO HELD ACCORDINGLY. THUS, GROUND RAISED IS DISMISSED . 14.4. IN THE COMBINED RESULT, ALL THE THREE APPEA LS OF THE REVENUE, I.E. ITA NO.1737, 1738, 2914/AHD/2009 ARE PARTLY ALLOWED , WHEREAS ALL THE THREE APPEALS OF THE ASSESSEE, I.E. ITA NOS.3470,34 57 & 3458/AHD/2010 ARE PARTLY ALLOWED. SD/- SD/- ( ) ( ) ( ANIL CHATURVEDI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 11/ 03 /2016 (.., .../ T.C. NAIR, SR. PS !'#$#%! / COPY OF THE ORDER FORWARDED TO : 1. *+, / THE APPELLANT 2. -.+, / THE RESPONDENT. 3. /0/12 3 / CONCERNED CIT 4. 3 ( * ) / THE CIT(A)-XX, AHMEDABAD 5. 4 5 -12 , * 12' , 0 / DR, ITAT, AHMEDABAD 6. 578 9 / GUARD FILE. / BY ORDER, . 4* - //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD ITA NO S.1737,1738,2914/AHD/2009 (BY REVENUE) ASST.YEARS 2006-07 3470, 3457 & 3458/AHD/2010 (BY ASSESSEES) ASST.YEARS 2007-08 - 21 - 1. DATE OF DICTATION ..20.1.16/3.3.16(DICTATION-PAD 17+PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 21.1.16/4.3.16 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.11.3.16 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 11.3.16 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER