DCIT CIR 3, THANE V. SUMITRA GAUTAM TRIVEDI, MUMBAI

ITA 2963/MUM/2012

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9102 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 05-01-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 02-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUM BAI , , BEFORE SHRI JOGINDER SINGH, JM AND SHRI SANJAY ARO RA, AM ./ I.T.A. NO. 2963/MUM/2012 ( / ASSESSMENT YEAR: 2006-07) ASST. CIT-3, VARDAAN, LOWER GR. FLOOR, MIDC, WAGLE INDL. ESTATE, THANE / VS. SUMITRA GAUTAM TRIVEDI 501/B, APOLO APARTMENT, HIRANANDANI ESTATE, G. B. ROAD, THANE (W) 400 607 ./! ./PAN/GIR NO. ABZPT 6379 H ( ' /APPELLANT ) : ( #$ ' / RESPONDENT ) ' % & / APPELLANT BY : SHRI NEIL PHILIP #$ ' % & / RESPONDENT BY : DR. K. SHIVARAM SHRI AJAY R. SINGH ' ()* % +, / DATE OF HEARING : 05.01.2015 -./ % +, / DATE OF PRONOUNCEMENT : 08.01.2015 0 / O R D E R PER SANJAY ARORA, A. M.: THIS IS AN APPEAL BY THE REVENUE DIRECTED AGAINST T HE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-I, THANE (CIT(A) FOR SHOR T) DATED 24.01.2012, ALLOWING THE ASSESSEES APPEAL CONTESTING ITS ASSESSMENT U/S.143 (3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR (A.Y.) 20 06-07. 2. THE ISSUE ARISING IN THE INSTANT APPEAL IS THE T REATMENT OF THE PROFITS AND GAINS ON THE PURCHASE AND SALE OF SHARES, EARNED AT RS.27,35 ,451/- FOR THE YEAR. WHILE THE ASSESSEE HAS RETURNED IT AS SHORT TERM CAPITAL GAIN (STCG), THE REVENUE INSISTS ON ITS BEING THE ASSESSEES BUSINESS INCOME, ASSESSABLE U/S.28. 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATE RIAL ON RECORD. 2 ITA NO. 2963/MUM/2012 (A.Y. 2006-07) ASST. CIT VS. SUMITRA GAUTAM TRIVEDI THE MATTER, IT MAY BE APPRECIATED, IS PURELY FACTUA L. THE ASSESSING OFFICER (A.O.) HAS, AND WE MUST APPRECIATE HIS EFFORTS, TAKEN PAIN S TO, RELYING ON A HOST OF DECISIONS, BRING FORTH THE CORRECT POSITION OF LAW. THE MATTER CANNOT DEPEND SOLELY UPON ONE PARTICULAR FACT, OR MERELY ON OR BY COUNTING THE NU MBER OF FACTS AND CIRCUMSTANCES, PRO AND CON, OR UPON APPLICATION OF ANY ABSTRACT RULE, PRINCIPLE OR FORMULA, BUT MUST DEPEND UPON THE TOTAL IMPRESSION AND EFFECT OF ALL THE REL EVANT FACTS AND CIRCUMSTANCES ESTABLISHED IN A PARTICULAR CASE. IN FACT, REPETITI ON OR CONTINUITY OF THE SIMILAR TRANSACTIONS IS NOT NECESSARY TO CONSTITUTE A TRANSACTION AS AN ADVENTURE IN THE NATURE OF TRADE. HOWEVER, THE SAME CAN AT BEST FORM A PRELUDE OR A P REFACE TO HIS FACTUAL ANALYSIS, WHICH HAS TO BE OF THE FACTS AND CIRCUMSTANCES OF THE CAS E, AND WHICH WE FIND AS ABSENT; THERE BEING NO REFERENCE THERETO IN HIS ORDER. THOUGH THE OPENING WORDS OF THE CONCLUDING PARA 6 OF HIS ORDER READS AS UNDER: 6. ALL THE FACTS MENTIONED ABOVE CLEARLY REFLECT T HE INTENTION OF THE ASSESSEE TO ENTER INTO AN ADVENTURE OF PURCHASE AND SALE OF SHARES AS TRADE. THE MAGNITUDE OF TRANSACTIONS OF PURCHASE AND SALES OF SHARES IS VERY HIGH., WE OBSERVE THAT THE A.O. HAS IN THE PRECEDING PARAS ONLY DISCUSSED THE LAW IN THE MATTER, WHICH WE HAVE SOUGHT TO DELINEATE HEREINBEF ORE. THE LD. CIT(A), ON THE OTHER HAND, HELD THAT THE FREQUENCY AND VOLUME OF TRANSAC TIONS IS IN FAVOUR OF THE APPELLANT. HE WAS, HOWEVER, MOVED PRINCIPALLY BY THE FACT THAT TH E A.O. HAD HIMSELF CONSIDERED THE GAIN (RS.21,93,928/-) ARISING ON THE SALE OF THE SH ARES, HELD FOR OVER 12 MONTHS, AS LONG TERM CAPITAL GAIN (LTCG), PROVING THE INTENT OF HOL DING THE SHARES AS INVESTMENT. THE GAIN, THEREFORE, WHERE THE HOLDING OF THE SHARES FA LLS BELOW 12 MONTHS, SHOULD QUALIFY TO BE STCG. THE ASSESSEES INVESTMENTS, ON WHICH SHE H AD RETURNED THE IMPUGNED GAIN, SPANS OVER 16 COMPANIES, AND WHICH COULD NOT BE CON SIDERED AS LARGE BY ANY STANDARD. IN OTHER WORDS, THE SAID TREATMENT WOULD IN HIS VIEW Q UALIFY THE ASSESSEE TO BE AN INVESTOR QUA THE SAID SHARES. THOUGH, IN OUR VIEW, THE LD. CIT(A ) WAS NOT CORRECT IN BEING GUIDED SOLELY BY THE SAID FACT, WHICH NO DOUBT REFLECTS AN INCONSISTENCY ON THE PART OF THE REVENUE (AND WHICH NO DOUBT HE IS COMPETENT TO CAUS E TO REMOVE OR RECTIFY), THERE IS BEFORE US NO FACTUAL BASIS TO THE REVENUES APPEAL. AS CLARIFIED EARLIER, THE ASSESSEES 3 ITA NO. 2963/MUM/2012 (A.Y. 2006-07) ASST. CIT VS. SUMITRA GAUTAM TRIVEDI INVESTMENT (WHICH IS SELF FINANCED) SPREADS OVER 16 COMPANIES, AND WHICH COULD NOT BE CONSIDERED AS LARGE. AGAIN, AS FURTHER CLARIFIED BY THE LD. AR, THE BULK (94%) OF THE STCG, I.E., AT RS.225.66 LACS, IS ON SHARES HELD FO R MORE THAN 30 DAYS (PB PG.2). THE ASSESSEES EARNING BY WAY OF DIVIDEND, AT RS.2,17,0 85/-, ALSO CANNOT BE CONSIDERED AS MINIMAL. IN VIEW OF THE FOREGOING, OUR AGREEMENT WI TH THE POSITION OF LAW, AS SOUGHT TO BE CLARIFIED BY THE A.O. THROUGH A HOST OF DECISION S BY THE HIGHER COURTS OF LAW, NOTWITHSTANDING, WE ARE UNABLE TO FIND ANY BASIS TO SUPPORT THE A.O.S FINDINGS. THE FINDINGS BY THE LD. CIT(A) THOUGH, AGAIN, NOT EXTEN SIVE, WEIGH IN FAVOUR OF THE ASSESSEE, WHO HAS, TO HIS CREDIT, FURNISHED ALL THE RELEVANT DETAILS BEFORE THE AUTHORITIES BELOW. IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE, WE A RE INCLINED TO UPHOLD THE IMPUGNED ORDER. WE DECIDE ACCORDINGLY. 4. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . 1/+2 ) % 1 % + 3 ORDER PRONOUNCED IN THE OPEN COURT ON JANUARY 08, 2 015 SD/- SD/- (JOGINDER SINGH) (SANJAY ARORA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER ' 4* MUMBAI; 5( DATED : 08.01.2015 ).(. ./ ROSHANI , SR. PS ! ' #$%& ' &$ / COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT 2. #$ ' / THE RESPONDENT 3. ' 6+ ( ) / THE CIT(A) 4. ' 6+ / CIT - CONCERNED 5. 9): #+(; , , ;/ , ' 4* / DR, ITAT, MUMBAI 6. => ?* / GUARD FILE ! ( / BY ORDER, )/(* + (DY./ASSTT. REGISTRAR) , ' 4* / ITAT, MUMBAI