ACIT-25(3), MUMBAI V. KRISHNA TONDON (HUF), MUMBAI

ITA 3359/MUM/2011

• Counselvise Citation: 335919914 RSA 2011
• Duration Of Justice: 4 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 09-12-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 27-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S PADMAJA
• Assessee Lawyers: CHETAN A KARIA
• Keywords: Business income; Rule of consistency
• Section: 143(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A MUMBAI . . , , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI RAJENDRA, ACCOUNTANT MEMBER . / ITA NO.3357/MUM/2011 / ASSESSMENT YEAR 2008-09 THE ACIT 25(3), C-11, R.NO.308, PRATYAKSH KAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA(E), MUMBAI 400 051 / VS. SHRI KRISHAN TANDON, 1702, WING-1, WHISPERING PALMS, LOKHANDWALA TOWNSHIP, KANDIVALI (E), MUMBAI 400 101 ./ ./ PAN/GIR NO. : AACPT 9712E ( / APPELLANT ) .. ( / RESPONDENT ) . / ITA NO.3359/MUM/2011 / ASSESSMENT YEAR 2008-09 THE ACIT 25(3), C-11, R.NO.308, PRATYAKSH KAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA(E), MUMBAI 400 051 / VS. SHRI KRISHAN TANDON (HUF), 1702, WING-1, WHISPERING PALMS, LOKHANDWALA TOWNSHIP, KANDIVALI (E), MUMBAI 400 101 ./ ./ PAN/GIR NO. : AAGHK 2747E ( / APPELLANT ) .. ( / RESPONDENT ) APPELLANT BY MS. S. PADMAJA RESPONDENT BY SHRI CHETAN A. KARIA ! ' / DATE OF HEARING : 26/05/2015 ! ' / DATE OF PRONOUNCEMENT : 29/05/2015 . / ITA NO.3357 & 3359/MUM/2011 / ASSESSMENT YEAR 2008-09 2 / O R D E R PER BENCH: BOTH THESE APPEALS ARE FILED BY THE REVENUE AND TH EY ARE DIRECTED AGAINST TWO SEPARATE ORDERS PASSED BY LD. CIT(A) DATED 9/3/ 2011 IN THE CASE OF RESPECTIVE ASSESSEES. GROUNDS OF APPEAL IN BOTH TH E APPEALS ARE IDENTICAL EXCEPT DIFFERENCE IN FIGURES. GROUNDS OF APPEAL IN ITA NO.3357/MUM/2011 ARE AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN DIRECTING THE A.O. TO ACCEPT THE CLAIM OF SHORT TERM CAPITAL GAIN OF RS. 8,20,81,3561- AND LONG TERM CAPITAL LOSS OF (-) RS. 36,466/- ON PROFIT ARRIVING FROM PURCHASE & SALE OF SHARES INSTEAD OF BUSINESS INCOM E TREATED BY THE A.O. WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE IS DEALING IN LARGE VOLUME OF SHARES, MOST OF THE SHARES ARE BOUGHT AND SOLD WITHIN SHORT PERI OD, WHILE SOME ARE NOT SOLD DUE TO MARKET CONDITIONS AND THEIR HOLDING WITH ASS ESSEE REMAINS BEYOND FEW DAYS, IT WILL NOT CHANGE THE NATURE OF TRANSACTIONS AND THE ASSESSEE IS VERY WELL ENGAGED IN THE BUSINESS OF SHARE TRADING, WHICH DEN OTE THAT THE MOTIVE OF THE ASSESSEE IS TO CARRY ON BUSINESS IN SHARES TO BOOK PROFIT RATHER THAN INVESTMENT IN SHARES. 2. THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CI T(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE A.O. BE RESTORED. FIGURES MENTIONED IN ITA NO.3359/MUM/2011 ARE RS.6 ,48,96,080/- AND RS.5,34,055/- RESPECTIVELY. 2. BOTH THESE APPEALS WERE ARGUED TOGETHER BY BOTH THE PARTIES. IT WAS ADMITTED THAT FACTS IN BOTH THE APPEALS ARE ALMOST SAME. 2.1 ASSESSEE IN ITA NO.3357/MUM/2011 IS AN INDIVIDU AL AND ASSESSEE IN ITA NO.3359/MUM/2011 IS HUF OF THE ASSESSEE IN ITA NO.3357/MUM/2011 THE ASSESSEE IN ITA NO.3357/MUM/2011 IS RETIREE FRO M STATE BANK OF INDIA AND HIS DATE OF BIRTH IS 29/1/1931. THEREFORE, AS ON 31/3/2008 THE AGE OF THE ASSESSEE IS ABOUT 77 YEARS. THE COMPOSITION OF IN COME OF BOTH THE ASSESSEES MENTIONED AT PAGE -2 OF THE ORDER OF LD. CIT(A) IS AS UNDER: . / ITA NO.3357 & 3359/MUM/2011 / ASSESSMENT YEAR 2008-09 3 ITA NO.3357/MUM/2011: INCOME FROM SALALRY RS. 1,32,595 INCOME FROM HOUSE PROPERTY RS. 92,400 CAPITAL GAINS: SHORT TERM CAPITAL GAIN RS .8,20,81,356 LONG TERM CAPITAL LOSS (EXEMPT) ( - ) RS. 36,466 INCOME FROMOTHER SOURCES RS, 2,48,903 DIVIDEND INCOME (EXEMPT) RS. 74,747 ITA NO.3359/MUM/2011: CAPITAL GAINS: SHORT TERM CAPITAL GAIN RS . 6,48,96,080 LONG TERM CAPITAL LOSS (EXEMPT) ( - ) RS. 5,34,055 INCOME FROM MOTHER SOURCES RS. 13,029 DIVIDEND INCOME (EXEMPT) RS. 2,06,500 2.2 THE FACTS RELATING TO EARNING OF SHORT TERM CA PITAL GAIN BY BOTH THE ASSESSEES AS DESCRIBED IN PAGE 2 & 3 OF ORDER OF L D. CIT(A) ARE AS UNDER: ITA NO.3357/MUM/2011: SR.NO. PARTICULARS 1. NO OF SHARES BOUGHT 5,06,222 2. NO. OF SCRIPS 31 3. PURCHASE AMOUNT 15,22,33,241 4. NO. OF SHARES SOLD 5,06,222 5. NO. OF SCRIPS 31 6. SALE AMOUNT 23,44,14,593 ITA NO.3359/MUM/2011: SR.NO. PARTICULARS 1. NO OF SHARES BOUGHT 16,57,741 2. NO. OF SCRIPS 63 3. PURCHASE AMOUNT 30,10,97,079 4. NO. OF SHARES SOLD 16,57,741 5. NO. OF SCRIPS 61 6. SALE AMOUNT 36,59,93,159 . / ITA NO.3357 & 3359/MUM/2011 / ASSESSMENT YEAR 2008-09 4 2.3 THE INDIVIDUAL ASSESSEE IN RESPECT OF A.Y 2007- 08 HAS BEEN ASSESSED BY THE AO VIDE ORDER DATED 27/11/2009, PASSED UNDER SE CTION 143(3) OF THE ACT, WHEREIN THE INCOME RETURNED BY THE ASSESEE FROM SAL E AND PURCHASE OF SHARE HAVE BEEN ASSESSED UNDER THE HEAD CAPITAL GAIN. CO PY OF THIS ORDER IS FILED AT PAGE 126 TO 128 OF THE PAPER BOOK. THE SHARE DEALI NG OF THE INDIVIDUAL ASSESSEE IN RESPECT OF A.Y 2006-07 TO 2010-11 ARE D ESCRIBED IN THE FOLLOWING CHART REPRODUCED AT PAGE-7 OF THE ORDER OF LD. CIT( A). ITA NO.3357/MUM/2011: ASSESSMENT YEAR CAPITAL GAIN COST OF INVESTMENTS AT THE YEAR END NO. OF SCRIP IN PORTFOLIO MARKET VALUE OF INVESTMENT AT THE YEAR-END 2006-07 829004 2511109 8 5065984 2007-08 3726560 10368709 11 10160267 2008-09 82044891 36723532 16 29963560 2009-10 (4652527) 22095682 13 10284405 2010-11 27366432 8501915 17 99231061 2.3.1IN RESPECT OF HUF FOLLOWING CHART HAS BEEN DES CRIBED AT PAGE 6 & 7 OF THE ORDER OF LD. CIT(A). ITA NO.3359/MUM/2011: ASSESSMENT YEAR CAPITAL GAIN COST OF INVESTMENTS AT THE YEAR END NO. OF SCRIP IN PORTFOLIO MARKET VALUE OF INVESTMENT AT THE YEAR-END 2006-07 3137511 4266015 5 7421024 2007-08 38272428 41190800 16 39883914 2008-09 64362026 68452848 19 56592730 2009-10 (27960806) 32843843 11 161301147 2010-11 13114648 57446407 16 71232338 2.3.2 THE HOLDING PERIOD OF THE SHARES AND THE GAIN ARISING TO THE ASSESSEE IN THE CASE OF INDIVIDUAL HAVE BEEN DESCRIBED IN THE F OLLOWING CHART AT PAGE 7 & 8 OF THE ORDER OF LD. CIT(A). ITA NO.3357/MUM/2011: HOLDING PERIODS CAPITAL GAINS/ (LOSS) 1 TO 90 DAYS 17133631 91 TO 150 DAYS 23240654 151 TO 210 DAYS 41637042 211 TO 300 DAYS 55379 . / ITA NO.3357 & 3359/MUM/2011 / ASSESSMENT YEAR 2008-09 5 301 TO 360 DAYS 14650 ABOVE 1 YEAR (36466) TOTAL 82044891 SUMMARY SHORT TERM CAPITAL GAINS 82081357 LONG TERM CAPITAL LOSS (36466) 2.3.3 SIMILARLY, THIS PERIOD FOR HUF HAS BEEN DESCR IBED IN FOLLOWING CHART APPEARING AT PAGE 7 & 8 OF THE ORDER OF LD. CIT(A), WHICH READ AS UNDER: ITA NO.3359/MUM/2011: HOLDING PERIODS CAPITAL GAINS/(LOSS) 1 TO 90 DAYS 21896644 91 TO 150 DAYS 36898108 151 TO 210 DAYS 2444347 211 TO 300 DAYS 3283481 301 TO 360 DAYS 373500 ABOVE 1 YEAR (534055) TOTAL 64362026 SUMMARY SHORT TERM CAPITAL GAINS 64896080 LONG TERM CAPITAL LOSS ( 534055 ) 2.4 IT IS ALSO NOTED BY LD. CIT(A) THAT MAJOR PART OF THE CAPITAL GAIN HAS BEEN EARNED BY THE ASSESSEE ONLY TWO SCRIPS NAMELY JAYA CORP. LTD. AND SAHARA HOUSING CORPORATION LTD., VIDE WHICH THESE ASSESSEE S HAVE EARNED A SUM OF RS.6.49 CRORES AND RS.4.59 CORES AS CAPITAL GAIN; T HE HOLDING PERIOD OF THE SAME WAS SUBSTANTIAL AND THIS POSITION HAS BEEN DE SCRIBED AT PAGE 8 OF THE ORDER OF LD. CIT(A) IN BOTH THE CASES AND THE CHART READ AS UNDER: ITA NO.3357/MUM/2011: NAME OF SCRIP CAPITAL GAINS RANGE OF HOLDING PERIOD JAI CORP. LTD. 41468549 154 TO 206 DAYS SAHARA HOUSING CORPORATION LTD. 23510649 85 TO 118 DAYS TOTAL 64979198 ITA NO.3359/MUM/2011: . / ITA NO.3357 & 3359/MUM/2011 / ASSESSMENT YEAR 2008-09 6 NAME OF SCRIP CAPITAL GAINS RANGE OF HOLDING PERIOD JAI CORP. LTD. 17976036 27 TO 114 DAYS SAHARA HOUSING CORPORATION LTD. 27948597 92 TO 127 DAYS TOTAL 45924633 2.5 ON THESE FACTS, SINCE THE GAIN OF THE ASSESSEE WAS SUBSTANTIAL AND VOLUME OF SALE AND PURCHASE OF SHARES BEING HIGHER, THE AO CAME TO THE CONCLUSION THAT THE INCOME EARNED BY THESE ASSESSEE S FROM SALE AND PURCHASE OF SHARES WOULD AMOUNT TO INCOME ASSESSABLE UNDER THE HEAD BUSINESS INCOME AND ACCORDINGLY, AO ASSESSED THE INCOME ARIS ING OUT OF SALE AND PURCHASE OF SHARES AS BUSINESS INCOME. 3. AGGRIEVED, ASSESSEE FILED AN APPEAL BEFORE LD. C IT(A). IT WAS SUBMITTED THAT ASSESSEE IS EARNING INCOME FROM INVESTMENT I N SHARES FROM YEAR TO YEAR AND THE NUMBER OF TRANSACTIONS IS ALSO NOT HIGH. NO BORROWED FUNDS HAVE BEEN UTILIZED FOR THE PURPOSE OF INVESTMENT IN SHAR ES. THUS, IT WAS PLEADED THAT KEEPING IN VIEW THE FACTS OF THE CASE, WHICH H AVE NOT BEEN RIGHTLY APPRECIATING BY THE AO, THE INCOME HAS WRONGLY BEE N ASSESSED UNDER THE HEAD BUSINESS INCOME AND THE SAME IS ASSESSABLE AS INC OME GIVING RISE TO ASSESSABLE UNDER THE HEAD CAPITAL GAIN. 3.1 IN THE CASE OF HUF, IT WAS BROUGHT TO THE NOTIC E OF LD. CIT(A) THAT SEVERAL OBSERVATIONS OF AO IN THE ASSESSMENT ORDERS WERE WR ONG WHICH LD. CIT(A) HAS ACCEPTED AND ALLOWED THE RELIEF TO THE ASSESSEE W ITH THE FOLLOWING OBSERVATIONS: DECISION WITH REASONING: 5.1 I HAVE CONSIDERED THE SUBMISSIONS OF THE REPRE SENTATIVE AND THE STAND TAKEN BY THE AO. ADMITTEDLY THE APPELLANT ADMITTED THE P ROFIT ON SALE OF SHARES UNDER THE CAPITAL GAIN IN THE EARLIER YEARS. IT IS TRUE THAT THE AO DID NOT SELECT THE CASE FOR SCRUTINY IN THE EARLIER ASSESSMENT YEARS. HOWE VER, THE APPELLANT IS CONSISTENTLY FOLLOWING THE METHOD OF ADMITTING THE PROFIT ON SALE OF SHARES UNDER THE HEAD CAPITAL GAINS. FURTHER, IT IS SEEN THAT T HE AO WAS UNDER THE IMPRESSION THAT THE APPELLANT WAS ADMITTING INCOME FROM SALE O F SHARES UNDER THE HEAD BUSINESS WHEREAS THERE WAS NO SUCH INCOME ADMITTED BY THE APPELLANT. THE AO . / ITA NO.3357 & 3359/MUM/2011 / ASSESSMENT YEAR 2008-09 7 HAS NARRATED MANY INCORRECT FACTS IN THE ASSESSMENT ORDER AS BROUGHT OUT ABOVE. ADMITTEDLY, THE APPELLANT ADMITTED THE SHARES HELD BY HIM AS INVESTMENT IN THE BALANCE SHEET WHICH INDICATED THE INTENTION OF THE APPELLANT TO HOLD THEM AS INVESTMENT. FURTHER THERE ARE NO BORROWED FUNDS U TILIZED FOR PURCHASE OF SHARES. AS SEEN FROM THE BALANCE SHEET ACTUALLY THERE IS NO BORROWED FUNDS AT ALL. THUS IT IS CLEAR THAT THE APPELLANT AS AN INVESTOR PURCH ASED SHARES AND THE SAME WAS CONSISTENTLY SHOWN AS INVESTMENT IN THE BALANCE SHE ET FILED WITH THE RETURNS OF INCOME AND THE PROFIT ON SUCH SALE OF SHARES WAS A DMITTED UNDER THE HEAD CAPITAL GAIN. FURTHER THE APPELLANT PAID STT AT TH E RATE APPLICABLE TO THE INVESTOR AND ALL THE TRANSACTIONS WERE BASED ON DELIVERY AS EVIDENCED BY THE D-MAT ACCOUNT. FURTHER, IT IS SEEN THAT THE APPELLANT HA S HELD THE SHARES FOR CONSIDERABLE PERIOD AND THE MAJOR PORTION OF SHORT TERM CAPITAL GAIN WAS EARNED BY HOLDING SHARES FOR 90 TO 210 DAYS. FURTHER THE APPELLANT EARNED AROUND 4.59 CR. FROM 2 SCRIPS AFTER HOLDING THEM FOR CONSIDERAB LE PERIOD AS BROUGHT OUT ABOVE. AS HELD BY THE HONBLE MUMBAI TRIBUNAL IN THE CASE OF GOPAL PUROHIT VS. JCIT (29 SOT 117) THE PRINCIPLE OF CONSISTENCY SHOULD BE FOL LOWED AND THE VERY FACT THAT THE APPELLANT ADMITTED PROFIT ON SALE OF SHARES UN DER THE HEAD CAPITAL GAINS IN THE EARLIER YEAR SHOWS THAT THE SAME CANNOT BE CHA NGED IN THE SUBSEQUENT YEARS. 5.3 FURTHER, THE HONBLE TRIBUNAL IN THE CASE OF JA NAK S. RANGWALLA VS. ACIT (11 SOT 627) HELD THAT THE FREQUENCY AND MAGNITUDE OF THE TRANSACTION CANNOT BE THE CRITERIA FOR DETERMINING THE HEAD OF INCOME. I T WAS HELD AS UNDER: THE MERE VOLUME OF TRANSACTION TRANSACTED BY THE AS SESSEE WOULD NOT ALTER THE NATURE OF TRANSACTION. IT IS AN ESTABLISHED PRINCIP LE THAT INCOME IS TO BE COMPUTED WITH REGARD TO THE TRANSACTION. THE TRANSACTION IN WHOLE HAS TO BE TAKEN INTO CONSIDERATION AND THE MAGNITUDE OF THE TRANSACTION DOES NOT ALTER THE NATURE OF TRANSACTION. THOUGH THE PRINCIPLE OF RES JUDICATA D OES NOT APPLY TO THE INCOME-TAX PROCEEDINGS AS EACH YEAR IS AN INDEPENDENT YEAR OF THE ASSESSMENT BUT IN ORDER TO MAINTAIN CONSISTENCY, IT IS A JUDICIALLY ACCEPTE D PRINCIPLE THAT SAME VIEW SHOULD BE ADOPTED FOR THE SUBSEQUENT YEARS, UNLESS THERE I S A MATERIAL CHANGE IN THE FACTS. THEIR LORDSHIPS OF HON'BLE SUPREME COURT IN THE RADHASOAMI SATSANG V. CIT [1992] 193 ITR 321 HAVE CATEGORICALLY HELD AS UNDER : '... STRICTLY SPEAKING, RES JUDICATA DOES NOT APPLY TO INCOME-TAX PROCEEDINGS. THOUGH, EACH ASSESSMENT YEAR BEING A UNIT, WHAT WAS DECIDED IN ONE YEAR MIGHT NOT APPLY IN THE FOLLOWING YEAR; WHERE A FUNDAMENTA L ASPECT PERMEATING THROUGH DIFFERENT ASSESSMENT YEARS HAS BEEN FOUND AS A FACT ONE WAY OR THE OTHER AND PARTIES HAVE ALLOWED THAT POSITION TO BE SUSTAINED BY NOT CHALLENGING THE ORDER, IT WOULD NOT BE AT ALL APPROPRIATE TO ALLOW THE POSITI ON TO BE CHANGED IN A SUBSEQUENT YEAR'. THE SAME VIEW HAS BEEN TAKEN BY THE HON'BLE DELHI H IGH COURT IN CIT V. NEO POLY PACK (P.) LTD. [2000] 245 ITR 492 . 5.4 RECENTLY THE HONBLE MUMBAI TRIBUNAL IN THE CAS E OF DCIT VS. SMK SHARES AND STOCK BROKING LTD. IN ITA NO.799/MUM/2009 DT. 2 4/11/2010 FOR A.Y 2005- 06 HELD AS UNDER IN PARA 13. . / ITA NO.3357 & 3359/MUM/2011 / ASSESSMENT YEAR 2008-09 8 13. CBDT VIDE CIRCULAR NO.4/2007 DATED 15 TH JUNE 2007, HAS OBSERVED THAT WHETHER A PARTICULAR HOLDING OF SHARES IS BY WAY OF INVESTMENT OR FROM PART OF THE STOCK IN TRADE IS A MATTER WHICH IS WITHIN THE KNOW LEDGE OF THE ASSESSEE WHO HOLDS HIS SHARES AND HE SHOULD, IN NORMAL CIRCUMSTA NCES, BE IN A POSITION TO PRODUCE EVIDENCE FROM HIS RECORDS AS TO WHETHER HE IS MAINTAINING ANY STOCK-IN- TRADE OR HOLDING THE SHARES BY WAY OF INVESTMENT. IN THE PRESENT CASE, IT IS NOT DISPUTED THAT THE ASSESSEE HAD MAINTAINED THIS DIST INCTION IN ITS RECORDS. IT IS TRUE THAT VOLUME OF TRANSACTION IS AN IMPORTANT IND ICATOR OF THE INTENTION OF THE ASSESSEE WHETHER TO DEAL IN SHARES AS TRADING ASSET OR TO HOLD THE SHARES AS INVESTOR BUT CERTAINLY NOT THE SOLE CRITERION. IN OUR CONSIDERED OPINION, THE ASSESSING OFFICERS CONCLUSION THAT SINCE SALE AND PURCHASE HAD BEEN DETERMINED BY THE VOLATILITY IN THE MARKET, THE SAME IS AGAINS T THE BASIC FEATURE OF INVESTOR, IS NOT BASED ON THE SOUND RATIONAL REASONING. A PRUD ENT INVESTOR ALWAYS KEEPS A WATCH ON THE MARKET TRENDS AND, THEREFORE, IS NOT B ARRED UNDER LAW FROM LIQUIDATING HIS INVESTMENTS IN SHARES. THE LAW ITS ELF HAS RECOGNIZED THIS FACT BY TAXING THESE TRANSACTIONS UNDER THE HEAD SHORT TER M CAPITAL GAINS. IF THE ASSESSING OFFICERS REASONING IS ACCEPTED, THEN IT WOULD BE AGAINST THE LEGISLATIVE INTENT ITSELF. IT IS ALWAYS A VEXED QUESTION TO FI ND OUT AS TO WHETHER THE ASSESSEE WAS HOLDING THE SHARES AS STOCK IN TRADE OR UNDER A N INVESTMENT PORTFOLIO PARTICULARLY BECAUSE ONE HAS TO INFER THE INTENTION OF THE ASSESSEE WHICH IS PRIMARILY WITHIN HIS OWN KNOWLEDGE. THE CONDUCT OF THE ASSESSEE ASSUMES SIGNIFICANCE IN THIS REGARD. IT HAS BEEN LAID DOWN IN VARIOUS JUDICIAL PRONOUNCEMENTS THAT THERE IS NO ACID TEST TO DECIDE THIS ISSUE. IN THE PRESENT, WE FIND THAT THE ASSESSING OFFICER WHILE PASSING ASSES SMENT ORDER UNDER SECTION 143(3) FOR ASSESSMENT YEARS 2001-02 AND 2004-05, DI D NOT DISPUTE THE ASSESSEES CLAIM REGARDING PROFIT ON SALE OF INVEST MENT. ONE MORE IMPORTANT ASPECT IS THAT THE ASSESSEE HAD NOT BORROWED ANY F UND FOR INVESTMENT IN SHARES AND THIS FACT CANNOT BE LOST SIGHT OFF WHILE DECIDI NG THE TRUE INTENTION OF THE ASSESEE. THE ABOVE DECISION OF THE HONBLE MUMBAI TRIBUNAL S UPPORTS THE CASE OF THE APPELLANT ESPECIALLY WHEN THERE ARE NO BORROWED FUN DS UTILIZED FOR INVESTMENT IN SHARES. 5.5 IN THE LIGHT OF ABOVE JURISDICTIONAL DECISIONS AND FOR THE OTHER FACTUAL FINDINGS GIVEN ABOVE, I DIRECT THE AO TO ACCEPT THE CLAIM OF THE APPELLANT BY ACCEPT BY ACCEPTING THE SHORT TERM CAPITAL GAIN ADMITTED B Y THE APPELLANT. 3.2 IN THE CASE OF INDIVIDUAL NOTING THE FACT THAT SIMILAR INCOME IN RESPECT OF IMMEDIATE PRECEDING YEAR WAS ASSESSED BY THE AO AS GIVING RISE TO INCOME ASSESSABLE UNDER THE HEAD CAPITAL GAIN, LD. CIT(A ) FOLLOWING THE DECISION OF TRIBUNAL INTER ALIA INCLUDING IN THE CASE OF GOPAL PUROHIT VS. JCIT, 29 SOT 117 HAS ALLOWED THE RELIEF TO THE ASSESSEE. 4. LD. CIT-DR, AFTER NARRATING THE FACTS, READING F ROM THE ASSESSMENT ORDER PASSED IN THE CASE OF HUF SUBMITTED THAT THE ACTIV ITY OF SALE AND PURCHASE OF . / ITA NO.3357 & 3359/MUM/2011 / ASSESSMENT YEAR 2008-09 9 SHARES CARRIED OUT BY THE ASSESSEE WAS IN THE NATUR E OF BUSINESS AS IT HAS BEEN CARRIED OUT IN A REGULAR MANNER AND VOLUME AND TUR NOVER IS ALSO HIGH. PERIOD OF HOLDING IS ALSO LOW, THEREFORE, THE INCOME EARN ED BY THE ASSESSEE CAN ONLY BE CHARACTERIZED AS INCOME EARNED OUT OF BUSINESS ACTIVITY. THUS, SHE PLEADED THAT LD. CIT(A) HAS COMMITTED AN ERROR IN ACCEPTING THE CLAIM OF THE ASSESSEE. ORDER PASSED BY LD. CIT(A) SHOULD BE SET ASIDE AND THAT OF AO BE RESTORED. 5. ON THE OTHER HAND, IT WAS SUBMITTED BY LD. AR TH AT AO DID NOT APPRECIATE THE FACTS OF THE CASE. IN THE CASE OF I NDIVIDUAL IN IMMEDIATE PRECEDING ASSESSMENT YEAR THE CLAIM OF THE ASSESSEE HAS BEEN ACCEPTED BY WAY OF AN ORDER PASSED UNDER SECTION 143(3) OF THE ACT. HE SUBMITTED THAT THE ACTIVITY OF THE ASSESSEE OF SALE AND PURCHASE OF SH ARES REMAIN THE SAME IN THE IMPUGNED ASSESSMENT YEAR AND ACTIVITIES IS ALSO SI MILAR IN THE CASE OF INDIVIDUAL AND HUF. THUS, IT WAS PLEADED BY LD. AR THAT KEEPING IN VIEW THE FACTS AND FIGURES MENTIONED IN THE ORDER OF LD. CIT (A), WHICH ARE DEPICTED IN VARIOUS CHARTS, IT CANNOT BE HELD THAT THE ACTIVITI ES CARRIED BY THE ASSESSEE OF SALE AND PURCHASE OF SHARES WAS IN THE NATURE OF BUSINESS. THUS, IT WAS SUBMITTED BY LD. AR THAT LD. CIT(A) HAS RIGHTLY CO NCLUDED THAT SUCH INCOME OF THE ASSESSEE WAS ASSESSABLE UNDER THE HEAD CAPITAL GAIN. 6. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY BEEN CONSIDERED. SO FAR AS IT RELATES TO THE CASE OF IN DIVIDUAL, FOR IMMEDIATE PRECEDING ASSESSMENT YEAR SIMILAR CLAIM HAS BEEN A CCEPTED BY WAY OF AN ASSESSMENT ORDER PASSED UNDER SECTION 143(3) OF THE ACT. ACCORDING TO THE FIGURES PLACED IN THE CHART THE ASSESSEE IN EARLIER YEAR HAS DEALT IN NUMBER OF SCRIPS I.E. 11 AND IN RESPECT OF A.Y 2008-09 THE S CRIPS DEALT IN ARE 16. THERE IS NOT MUCH DIFFERENCE IN THE POSITION OF SALE AND PUR CHASE OF SHARES EXCEPT HIGHER VALUE OF THE SHARES, THE PERIOD OF HOLDING IS ALSO SUBSTANTIAL AND MAIN INCOME HAS BEEN EARNED BY THE ASSESSEE IN TWO SCRIPS ONLY. ALL THESE POSITIONS HAVE BEEN DESCRIBED IN THE CHART , WHICH HAVE BEEN REPRODUCED IN THE . / ITA NO.3357 & 3359/MUM/2011 / ASSESSMENT YEAR 2008-09 10 ABOVE PART OF THIS ORDER. THE AO HAS NOT BROUGHT O UT ANY SUBSTANTIAL DIFFERENCE IN THE FACTS BETWEEN THE CASE FOR THE YE AR UNDER CONSIDERATION AND FOR ASSESSMENT YEAR 2007-08. THE ASSESSEE IS AN O LD PERSON AND IS REGULARLY MAKING INVESTMENT IN THE SHARES AND THE NUMBER OF S CRIPS DEALT IS ALSO NOT HIGH. WE DO NOT FIND ANY DIFFERENTIAL FACT FOR THE YEAR UNDER CONSIDERATION AS COMPARED TO THE IMMEDIATE PRECEDING ASSESSMENT YEAR FOR WHICH SIMILAR ACTIVITY HAS BEEN HELD TO BE ASSESSABLE UNDER THE H EAD CAPITAL GAIN. THERE IS ALSO NO SUBSTANTIAL DIFFERENCE IN THE ACTIVITIES C ARRIED OUT BY THE ASSESSEE IN INDIVIDUAL CAPACITY VIS--VIS IN THE CAPACITY OF HU F. THE ASSESSEE DID NOT UTILIZE THE BORROWED FUNDS FOR MAKING INVESTMENT AS THE ENTIRE INVESTMENT IS MADE OUT OF OWN CAPITAL OF THE ASSESSEE. KEEPING I N VIEW ALL THESE FACTS, WHICH HAVE BEEN ACCEPTED BY LD. CIT(A) BY DETAILED DISCUS SION IN THE CASE OF HUF AND ALSO IN VIEW OF FACTS OF THE PRESENT CASE AND P OSITION DEPICTED IN THE CHARTS, WE ARE OF THE OPINION THAT LD. CIT(A) DID NOT COMMI T ANY ERROR IN GRANTING IMPUGNED RELIEF TO THE PRESENT ASSESSEES. WE DECLI NE TO INTERFERE IN THE RELIEF GRANTED BY HIM. ACCORDINGLY, THE APPEALS FILED BY THE REVENUE ARE DISMISSED. 7. IN THE RESULT, BOTH THE APPEALS FILED BY THE REV ENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29/05/2015 () * + 29/05/2015 SD/- SD/- ( , / RAJENDRA) ( . . / I.P. BANSAL) / ACCOUNTANT MEMBER / JUDICIAL MEMBER ( MUMBAI; * DATED 29/05/2015 . / ITA NO.3357 & 3359/MUM/2011 / ASSESSMENT YEAR 2008-09 11 ! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. .! ( ) / THE CIT(A)- 4. .! / CIT 5. /0 !12 , ' 12 , ( / DR, ITAT, MUMBAI 6. 3 / GUARD FILE. / BY ORDER, /! ! //TRUE COPY// / (DY./ASSTT. REGISTRAR) , ( / ITAT, MUMBAI . . ./ VM , SR. PS