ADDL CIT 25(2), MUMBAI V. SURESHKUMAR SEKSARIA, MUMBAI

ITA 3386/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48910 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2006-2007
• Appeal Filed On: 30-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JIGNESH R SHAH
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, E BENCH, MUMBAI. BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI V.DURGA RAO, JUDICIAL MEMBER I.T.A NO.3386/ MUM/2010 ASSESSMENT YEAR: 2006-07 ADDL. COMMISSIONER OF INCOME TAX 25(2) .. APPELL ANT C-11, 1 ST FLOOR, PRATYAKSHAKAR BHAVAN, BANDRA(E),MUMBAI-51 VS SURESH KUMAR SEKSARIA, ,. RESPONDEN T D-102, DHARAM PLACE, SHANTVAN, BORIVALI(E) MUMBAI. PA NO.AAIPS 6472N APPEARANCES: ASHIMA GUPTA, FOR THE APPELLANT JIGNESH R SHAH, FOR THE RESPONDENT O R D E R PER PRAMOD KUMAR: 1. BY WAY OF THIS APPEAL, THE ASSESSING OFFICER H AS CALLED INTO QUESTION CORRECTNESS OF CIT(A)S ORDER DATED 5 TH FEBRUARY, 2010, IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2006-07 ON THE FOLLOWING GROUND: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN DIRECTING THE AO TO TREAT THE ASSE SSEE AS INVESTOR AND ASSESS THE PROFIT ON SALE OF DELIVERY BASED SHARES AS SHORT/LONG TERM CAPITAL GAINS AS DECLARED BY THE ASSESSEE WITHOUT A PPRECIATING THE FACTS THAT THE ASSESSEE HAS DEVOTED MOST OF HIS TIM E IN THIS ACTIVITY I.T.A NO.3386/ MUM/2010 SURESH KUMAR SEKSARIA 2 COMPARED TO OTHER ACTIVITIES, OBTAINED HUGE LOANS T O CARRY OUT TRADING IN SHARES AND THE ASSESSEES INTENTION WAS TO EARN QUICK PROFITS OUT OF TRADING ACTIVITY AND NOT TO EARN DIVIDEND OUT OF IN VESTMENT IN SHARES. 2. BRIEFLY STATED THE RELEVANT MATERIAL FACTS ARE L IKE THIS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTIC ED THAT THE ASSESSEE HAD RECEIVED INCOME FROM SHORT TERM CAPITAL GAINS AT ` .81,97,417 AND LONG TERM CAPITAL GAIN OF ` .46,08,969 CLAIMED AS EXEMPT UNDER SECTION 10(38). THE ASSESSEE HAD SHOWN NET SPECULATION PROFIT FROM SHARES DURING THE YEAR AMOUNTING TO ` .30,78,942, WHICH HAS BEEN SET OFF AGAINST LOSSES FOR A.Y. 2001 -02 AND 2005-06. THE ASSESSEE HAS ALSO SHOWN DIVIDEND INCOME OF ` .5,84,669 AND ALSO NET LOSS FROM SHARE TRADING BUSINESS AT ` .1,10,440. THE AO OBSERVED THAT THE ASSESSEE IS DE ALING IN LARGE NUMBER OF SHARES AND ALSO BROUGHT AND SOLD THE SHAR ES WITHIN SHORT PERIOD. IT WAS IN THIS BACKDROP THAT THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE WAS SHOWING THE TRANSACTIONS AS INVESTMENT IN WHICH THE RE WAS MORE PROFIT WHILE OTHERS ARE TRADING TRANSACTION. ACCORDINGLY, HE TREATED T HE ENTIRE PROFIT ARISING OUT PURCHASE AND SALE OF SHARES SHOWN AS STCG AND LTCG AS INCOME FROM BUSINESS AND PROFESSION. AGGRIEVED, THE ASSESSEE CARRIED THE MA TTER IN APPEAL BEFORE THE CIT(A), WHO FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSES SEES OWN CASE FOR THE ASSESSMENT YEAR 2004-05 AND OTHER DECISIONS ON THE SUBJECT, DI RECTED THE AO TO ACCEPT THE CLAIM OF THE ASSESSEE TO TREAT THE SHARE TRANSACTIONS AS LONG TERM CAPITAL GAIN BEING AGGRIEVED, THE ASSESSING OFFICER IS IN APPEAL BEFOR E US. 3. HAVING HEARD THE RIVAL CONTENTIONS AND HAVING PE RUSED THE MATERIAL ON RECORD, WE FIND THAT THE FACTS OF THIS YEAR ARE IDE NTICAL TO THE FACTS OF THE ASSESSMENT YEAR 2004-05, AS ADMITTED BY THE LOWER AUTHORITIES. WE ALSO FIND THAT THE CIT (A) IN THE IMPUGNED ORDER HAS FOLLOWED THE ORDER OF THE TR IBUNAL FOR THE ASSESSMENT YEAR 2004-05, WHICH HAS SINCE BEEN AFFIRMED BY THE HONB LE JURISDICTIONAL HIGH COURT ORDER DATED 1 ST MARCH, 2011, COPY OF WHICH IS PLACED ON RECORD. IN VIEW OF THIS, FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONA L HIGH COURT IN THE CASE OF THE ASSESSEE (SUPRA), WE APPROVED THE CONCLUSIONS ARRIV ED AT BY THE CIT(A). I.T.A NO.3386/ MUM/2010 SURESH KUMAR SEKSARIA 3 4. IN THE RESULT, APPEAL IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 31 ST MAY 2011. SD/- (V. DURGA RAO) JUDICIAL MEMBER SD/- (PRAMOD KUMAR) (ACCOUNTANT MEMBER) MUMBAI, DATED 31 ST MAY, 2011 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS),35, MUMBAI 4. COMMISSIONER OF INCOME TAX, 25 , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH E, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI