DCIT 14(2)., MUMBAI V. USHA SUDHIR TULSIYAN, MUMBAI

ITA 3937/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7615 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2005-2006
• Appeal Filed On: 19-06-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIRENDRA OJHA
• Keywords: Business income
• Section: 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F, MUMBAI BEFORE SHRI D. MANMOHAN, HONBLE VICE PRESIDENT AND SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER ITA NO.3937/MUM/2009 ASSESSMENT YEAR: 2005-2006 THE ASST. COMM. OF INCOME TAX 14(2), EARNEST HOUSE, 3 RD FLOOR, NARIMAN POINT, MUMBAI 400 021. VS. USHA SUDHIR TULSIYAN. C/O. TULSIYA ENT., 70, 4 TH FLR., 383, DHABOLKAR WADE, 14 THE FL., R.NO.70, KALBADEVI RD., MUMBAI 400 002. PAN AACPT6797R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI. VIRENDRA OJHA. RESPONDENT BY : NONE. O R D E R PER D. MANMOHAN, V.P. THIS APPEAL IS FILED AT THE INSTANCE OF THE REVENU E. ONLY GROUND, URGED BY THE REVENUE, READS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO ACCEPT THE CLAIM OF THE ASSESSEE WITH REGARD TO THE SHORT-TERM CAPITAL- GAIN WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAS DONE PU RCHASE AND SALE OF SHARES IN LARGE SCALE AND AT HIGH FREQUENCY AND PERIOD OF HOLDING IS ALSO NOT VERY LONG. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE. HAVIN G REGARD TO THE FACTS OF THE CASE WE PROCEED TO DISPOSE OF THE APPEAL EX- PARTE, QUA THE ASSESSEE. WE HAVE HEARD THE LEARNED D.R. AND CAREFULLY PERUSE D THE RECORD. 3. FACTS IN SHORT ARE THAT THE ASSESSEE, IN HER IND IVIDUAL CAPACITY, CARRIED ON BUSINESS, AS A PROPRIETRIX OF M/S. TULSIYAN AGAR WAL ENTERPRISES, DEALING IN FABRICS. BESIDES, THE ASSESSEE HAD INCOME FROM I NVESTMENTS. ITA NO.3937/MUM/2009 A.Y.: 2005-2006 2 DIVIDENDS, INTEREST AND CAPITAL-GAIN WERE ALSO OFFE RED TO TAX UNDER VARIOUS HEADS. DURING THE COURSE OF ASSESSMENT PROCEEDIN GS THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE EARNED INCOME IN THE FORM OF SHORT-TERM CAPITAL- GAIN, OUT OF INVESTMENTS IN BONDS, MUTUAL FUNDS AND SHARES. ACCORDING TO THE ASSESSING OFFICER THE INCOME ARISING OUT OF SAL E OF BONDS, MUTUAL FUNDS ETC., IS ASSESSABLE TO TAX AS BUSINESS INCOME AND NOT UNDER THE HEAD SHORT- TERM CAPITAL-GAIN. VIDE LETTER DATED 07.11.2007 THE ASSESSEE SUBMITTED A DETAILED REPLY TO THE ASSESSING OFFICER. HOWEVER , WITHOUT MEETING THE SUBMISSIONS OF THE ASSESSEE, THE ASSESSING OFFICER SIMPLY CONCLUDED THAT BECAUSE OF THE HIGH FREQUENCY OF TRANSACTIONS INCOM E THEREON HAS TO BE ASSESSED AS BUSINESS INCOME. 3. AGGRIEVED, ASSESSEE CONTENDED BEFORE THE LEARNED CIT(A), THAT THE CONCLUSION REACHED BY THE ASSESSING OFFICER WAS WIT HOUT ANY BASIS. IT WAS EXPLAINED BEFORE THE LEARNED CIT(A) THAT SURPLUS FU ND WAS SIMPLY PARKED BY WAY OF INVESTMENT IN BONDS, MUTUAL FUNDS AND SHARES , WHICH WERE DULY DISCLOSED IN THE BALANCE-SHEET OF THE ASSESSEE UNDE R THE HEAD INVESTMENTS AND NOT AS STOCK IN TRADE. MATERIAL FURNISHED BEFORE THE LEARNED CIT(A) INDICATE THAT MOST OF THE SCRIPTS WERE HELD FOR MOR E THAT 250 DAYS AND TRANSACTIONS WERE NOT VOLUMINOUS. BY PLACING REL IANCE UPON A DECISION OF ITAT G BENCH, IN THE CASE OF GOPAL PUROHIT THE AS SESSEE CONTENDED THAT DELIVERY BASED TRANSACTIONS SHOULD NOT BE TREATED A S BUSINESS TRANSACTIONS AND INCOME EARNED THEREFROM SHOULD BE TREATED AS LO NG-TERM OR SHORT-TERM CAPITAL-GAIN, DEPENDING UPON THE PERIOD OF HOLDING. THE ASSESSEE ALSO RELIED UPON SEVERAL OTHER DECISIONS WHEREIN IDENTIC AL ISSUE WAS DECIDED IN FAVOUR OF ASSESSEE. 4. HAVING REGARD TO THE SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE, THE LEARNED CIT(A) DIRECTED THE ASSESSING OFFICER TO AC CEPT THE CLAIM OF THE ASSESSEE WITH REGARD TO THE SHORT-TERM CAPITAL-GAIN . 5. AGGRIEVED, REVENUE IS IN APPEAL BEFORE US. NO MATERIAL WHATSOEVER WAS FURNISHED BEFORE US TO CONTRADICT THE FINDINGS OF THE LEARNED CIT(A). ITA NO.3937/MUM/2009 A.Y.: 2005-2006 3 UNDER THESE CIRCUMSTANCES, WE DID NOT FIND ANY INFI RMITY IN THE ORDER PASSED BY THE LEARNED CIT(A). THEREFORE, WE DISMI SS THE APPEAL FILED BY THE REVENUE AND UPHOLD THE ORDER OF THE LEARNED CIT(A). PRONOUNCED IN THE OPEN COURT, ON THIS THE 17 TH FEBRUARY, 2010. SD/- (J. SUDHAKAR REDDY) (ACCOUNTANT MEMBER) SD/- (D. MANMOHAN) (VICE PRESIDENT) MUMBAI, DATED 17 TH FEBRUARY, 2010. JANHAVI COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)-XIV, MUMBA I 4. COMMISSIONER OF INCOME TAX, CITY-XIV, MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH F, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI ITA NO.3937/MUM/2009 A.Y.: 2005-2006 4 DATE INITIALS 1. DRAFT DICTATED ON 12-02-2010 PS 2. DRAFT PLACED BEFORE AUTHOR 15-02-2010 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER AM/VP 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/V P 5. APPROVED DRAFT COMES TO THE SR. PS PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER