Shri Gopal Das Agrawal, V. A.C.I.T 2(1), Jabalpur

ITA 40/JAB/2013

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1045 (ITAT-JABALPUR)
• Duration Of Justice: 6 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 28-05-2019
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 20-05-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 25-03-2013
• Court: TRIBUNAL
• Department Lawyers: D R LATHORIYA
• Assessee Lawyers: G N PUROHIT
• Keywords: Business income

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JABALPUR BENCH, JABALPUR BEFORE SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER AND SHRI B.C. MEENA, HONBLE ACCOUNTANT MEMBER ITA NO. 40/JAB/2014 A.Y. 2007-08 SHRI GOPAL DAS AGRAWAL KATNI PAN ACHPA 2909B ::: APPELLANT VS ASSTT. COMMISSIONER OF INCOME TAX WARD 2(1) JABALPUR ::: RESPONDENT ` APPELLANT BY SHRI G.N. PUROHIT RESPONDENT BY SHRI D.R. LATHORIYA DATE OF HEARING 20 . 5 .2015 DATE OF PRONOUNCEMENT 2 1 . 7 .2015 O R D E R PER SHRI B.C. MEENA, AM THIS APPEAL FILED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE LEARNED CIT(A), JABALPUR, DATED 8.5.2012. 2 2. THE ASSESSEE HAS DECLARED INCOME FROM BUSINESS AND PROFESSION, SHORT TERM CAPITAL GAIN AND INCOME FROM OTH ER SOURCES. THE ASSESSEE ALSO SHOWED INCOME FROM PURCH ASE AND SALES. THE RETURN OF INCOME WAS FILED ON 12.9.2007 . THE ASSESSMENT WAS COMPLETED AT AN INCOME OF RS.6,92,690/- WHICH WAS ALSO THE RETURNED INCOME. TH E ONLY ISSUE INVOLVED IN THIS APPEAL IS THAT THE INCOME FROM PURCHASE AND SALES OF SHARES HAS BEEN TAKEN AS BUSINESS INCOME. THE INCOME FROM PURCHASE AND SALE OF SHARES WAS HELD TO BE BUSINESS INCOME WITH THE OBSERVATION THAT THE ASSESSEE IS DOING FREQUENTLY THE TRADING OF SHARES OF DIFFERENT COMPANIES FOR NOT HOLDING THE SHARES FOR A L ONG PERIOD. 3. WE HAVE HEARD BOTH THE SIDES. WE HAVE ALSO GONE THROUGH VARIOUS CASE LAWS RELIED ON BY THE LEARNED COU NSEL FOR THE ASSESSEE AND CBDT BOARD CIRCULAR NO. 4/2007 DATED 15 TH JUNE, 2007 WHEREIN VARIOUS DECISIONS ON WHICH 3 THE DISTINCTION BETWEEN THE SHARES HELD AS STOCK IN T RADE AND INVESTMENT HAVE BEEN ENUMERATED. AFTER HEARING, WE FIND THAT THE ASSESSEE IS A REGULAR INVESTOR AND PROFIT ARISING ON THE SALES OF SHARES WAS A SHORT TERM CAPITAL GAI N RATHER THAN BUSINESS INCOME. ONLY FREQUENCY OF TRANSACTION CANNOT BE MADE THE BASIS FOR TREATING THE INCOME FROM SALE OF SHARES AS BUSINESS INCOME. THE BASI C ISSUE IS THE INTENTION OF THE ASSESSEE. THE ASSESSEE WAS HOLDING VARIOUS SHARES FOR 15 DAYS TO 7 MONTHS AND ALL THE TRANSACTIONS WERE DELIVERY BASED AND WHERE THE HOLDING IS LESS THAN ONE YEAR THEN GAIN ARISING OUT OF THE SALE OF SHARES SHALL BE TREATED AS SHORT TERM CAPITAL GAIN WHEN TH E ASSESSEE WAS DOING OTHER BUSINESS AND THE TRANSACTION IN SHARES WAS ONLY FOR INVESTMENT PURPOSES. KEEPING THE SE FACTS IN VIEW, WE DIRECT THE ASSESSING OFFICER TO TR EAT THE GAIN ON THE SALE OF SHARES OF RS. 6,58,947/- AS SHORT T ERM CAPITAL GAIN INSTEAD OF BUSINESS INCOME. 4 ITA 40/JAB/14 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. PRONOUNCED IN OPEN COURT ON 21 ST JULY, 2015 SD SD (D.T. GARASIA) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER 21 ST JULY, 2015 DN/-