DCIT, New Delhi V. M/s Space Power Controls (P) Ltd., New Delhi

ITA 4411/DEL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8057 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 23-03-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 19-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIMA BARNWAL
• Assessee Lawyers: YOGESH K JOGIA
• Keywords: Capital asset; Business income; Additional evidence; Question of law; Cost of acquisition; Difference of opinion; Change of opinion
• Section: 143(3); 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : G : NEW DELHI BEFORE I.C. SUDHIR , JUDICIAL M EMBER AND SH. O.P. KANT , ACCOUNTANT MEMBER ITA NO. 4411 /DEL/ 2013 ASSESSMENT YEAR: 2007 - 08 DCIT , CIRCLE 9(1), ROOM NO. 163, C.R. BUILDING, NEW DELHI VS. M/S. SPACE POWER CONTROLS (P) LTD., 92, 2 ND FLOOR, HUMANYUPUR, SAFDARJUNG ENCLAVE, NEW DELHI. GIR/PAN : AAICS8090F (APPELLANT) (RESPONDENT) AND ITA NO. 1946/DEL/2012 ASSESSMENT YEAR: 2007 - 08 M/S. SPACE POWER CONTROLS (P) LTD., 92, 2 ND FLOOR, HUMANYUPUR, SAFDARJUNG ENCLAVE, NEW DELHI. VS. ACIT, CIRCLE 9(1), ROOM NO. 163, C.R. BUILDING, NEW DELHI GIR/PAN : AAICS8090F (APPELLANT) (RESPONDENT) AND ITA NO. 5264/DEL/2012 ASSESSMENT YEAR: 2006 - 07 ACIT, CIRCLE 9(1), ROOM NO. 163, C.R. BUILDING, NEW DELHI VS. M/S. SPACE POWER CONTROLS (P) LTD., 92, 2 ND FLOOR, HUMANYUPUR, SAFDARJUNG ENCLAVE, NEW DELHI. GIR/PAN : AAICS8090F (APPELLANT) (RESPONDENT) DEPARTMENT BY SMT. ANIMA BARNWAL, SR.DR ASSESSEE BY SH. YOGESH K. JOGIA, ADV. DATE OF HEARING 23.03.2016 DATE OF PRONOUNCEMENT 27.04.2016 2 ITA NOS. 4411/DEL/2013; 1946/DEL/2012 & 5264/DEL/2012 ORDER PER O.P. KANT, A. M. : OUT OF THESE THREE APPEALS OF THE ASSESSEE AND REVENUE, TWO APPEALS OF ASSESSEE AND REVENUE IN RESPECT OF ASSESSMENT YEAR 2007 - 08, ARE DIRECTED AGAINST TWO SEPARATE ORDERS OF THE LD. COMMISSIONER OF INCOME - TAX( APPEALS) XII, NEW DELHI [IN SHORT THE CIT(A ) ] DATED 14/05/2010 AND 23/05/2013 RESPECTIVELY. IN ORDER DATED 14/05/2010, THE CIT(A) HAS DECIDED THE ADDITIONS MADE IN THE ASSESSMENT ORDER UNDER SECTION 143( 3) OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT ) AND IN ORDER DATED 23/05/2013, THE PENAL TY LEVIED BY THE ASSESSING OFFICER (IN SHORT THE AO ) UNDER SECTION 271(1)(C ) OF THE ACT HAS BEEN DECIDED BY THE CIT(A). THE THIRD APPEAL OF REVENUE IS IN RESPECT OF ASSESSMENT YEAR 2006 - 07 AND DIRECTED AGAINST THE ORDER DATED 02/07/2012 OF THE LD. COMMI SSIONER O F INCOME - TAX( APPEALS) - XII, NEW DELHI, WHEREIN HE HAS DELETED THE PENALTY LEVIED BY THE AO UNDER SECTION 271(1)(C ) OF THE ACT. IN ALL THE APPEALS CONNECTED MATTERS ARE INVOLVED, THEREFORE THESE APPEALS ARE HEARD TOGETHER AND DISPOSED BY THIS CONSOL IDATED ORDER. ITA NO. 1946/DEL/2012 FOR AY: 2007 - 08 2. FIRST WE TAKE UP THE APPEAL IN ITA NO. 1946/DEL/2012. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS UNDER: I. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE ORDER PASSED BY COMMISSIONER OF INCOME TAX(APPEALS) - XII, NEW DELHI, HEREINAFTER REFERRED AS CIT(A) , BEING PERVERSE OF THE FACTS AND AGAINST THE PRINCIPLES OF LAW, IS VOID - AB - INITIO AND APPELLANT COMPANY IS ENTITLED TO BE ASSESSED AT ITS RETURNED INCOME. II. THAT IN THE FACT S AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN UPHOLDING TAXING OF SHORT TERM CAPITAL GAIN UNDER THE HEAD INCOME FROM BUSINESS AND PROFESSION. III. THAT WITHOUT PREJUDICE , THE LEARNED COMMISSIONER OF IN COME TAX(APPEALS) ERRED IN NOT ALLOWING CREDIT OF SECURITIES TRANSACTION TAX UNDER SECTION 88E OF ACT IN CONSEQUENCE OF TAXING THE SHORT TERM CAPITAL GAIN UNDER THE HEAD INCOME FROM BUSINESS AND PROFESSION. IV. THAT THE APPELLANT CRAVE LEAVE OF THIS HON BLE COURT TO AMEND, ALTER THE GROUNDS OF APPEAL BEFORE HEARING. 3. T HE FACTS IN BRIEF ARE THAT THE ASSESSEE FILED RETURN OF INCOME ON 29/09/ 2007 DECLARING INCOME OF RS. 2,09,85, 420/ - . THE CASE OF THE ASSESSEE WAS 3 ITA NOS. 4411/DEL/2013; 1946/DEL/2012 & 5264/DEL/2012 SELECTED FOR SCRUTINY UNDER COMPUTERIZED ASSISTED SELECTION OF SCRUTINY (CASS ) AND NOTICE UNDER SECTION 143( 2) OF THE ACT WAS ISSUED AND SERVED WITHIN THE STIPULATED PERIOD. IN THE COURSE OF SCRUTINY PROCEEDINGS, THE AO OBSERVED THAT THE PART OF INCOME FROM ACTIVITY OF PURCHASE AND SALES OF THE SHARES WAS SHOWN AS BUSINESS INCOME , WHEREAS FOR BALANCE SHARES, THE INCOME FROM ACTIVITY OF PURCHASE AND SALES WAS SHOWN AS SHORT - TERM CAPITAL GAIN (RS. 2,07,53, 989/ - ). ACCORDING TO ASSESSING OFFI CER, THE ENTIRE ACTIVITY O F PURCHASE AND SALE OF SHARES WAS IN THE NATURE OF BUSINESS ACTIVITY AND NO INVESTMENT ACTIVITY WAS CARRIED OUT BY THE ASSESSEE. THE INVESTMENT ACTIVITY WAS SHOWN TO TAKE BENEFIT OF THE CHANGE IN INCOME TAX PROVISIONS W.E.F. 01/10/2004 WHEREIN ON THE SALE OF SECURITIES ON THE STOCK EXCHAN GE , WHICH ARE SUBJECTED TO SECURITY TRANSITION TAX, LONG - TERM CAPITAL GAIN WILL BE EXEMPT ED UNDER SECTION 10 (38) OF THE ACT AND SHORT - TERM CAPITAL GAIN WOULD BE ENTITLED TO CONCESSIONA L RATE OF 10% UNDER SECTION 111 A OF THE ACT. HAVING DISCUSSED VARIOUS JU DGMENTS ON THE ISSUE AS TO WHETHER THE PURCHASE AND SALE OF THE SHARES WOULD BE FALLING UNDER THE BUSINESS INCOME OR CAPITAL GAIN, THE AO HELD THAT THE CHAR ACTER OF THE ASSESSEE WAS OF A T RADER RATHER THAN INVESTOR AND THEREFORE THE SHORT - TERM CAPITAL GAIN OF RS. 2,07, 53, 989/ - DECLARED BY THE ASSESSEE WAS HELD BY THE AO AS BUSINESS INCOME. ON APPEAL TO THE LEARNED COMMISSIONER OF INCOME - TAX( APPEALS), THE FINDINGS OF THE AO WERE UPHELD. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. GROUNDS NO . 1 AND 4 OF THE APPEAL ARE GENERAL IN NATURE AND NOT REQUIRED TO BE ADJUDICATED BY US. 5. IN GROUND NO. 2, THE ASSESSEE HAS CHALLENGED TAXING OF SHORT - TERM CAPITAL GAIN UNDER THE HEAD PROFIT AND GAINS OF BUSINESS AND PROFESSION . 6. THE LD. AUTHORIZE D R EPRESENTATIVE OF THE ASSESSEE REITERATING THE SUBMISSION MADE BEFORE THE LD. COMMISSIONER OF INCOME - TAX( APPEALS), SUBMITTED THAT THE COMPANY WAS INCORPORATED WITH THE MAIN OBJECT OF CARRY ON TH E BUSINESS OF MANUFACTURING AND TRADING IN ALL TYPE S OF POWE R CONTROL EQUIPMENTS, POWER GENERATION EQUIPMENTS ETC, HOWEVER , DUE TO NON - AVAILABILITY OF THE ADEQUATE OPPORTUNITIES, THE BOARD OF DIRECTORS RES OLVED UNDER SECTION 292 4 ITA NOS. 4411/DEL/2013; 1946/DEL/2012 & 5264/DEL/2012 OF THE C OMPANIES ACT TO INVEST IN THE CAPITAL MARKET DURING THE FINANCIAL YEAR 2004 - 05 AND , THEREAFTER , THE ASSESSEE COMPANY CARRIED ON THE INVESTMENT ACTIVITY AND DECLARED THE INCOME UNDER THE HEAD INCOME FROM CAPITAL GAINS . THE I NVESTMENT IN EQUITY SHARES WAS R EFLECTED UNDER THE HEAD INVESTMENT AND VALUED A T COST IN THE AUDITED BALANCE SHEET OF THE COMPANY. HOWEVER , DURI NG THE FINANCIAL YEAR 2005 - 06 (I.E. ASSESSMENT YEAR 2006 - 07) , THE ASSESSEE COMPANY DECIDED TO COMMENCE THE BUSINESS OF TRADING IN EQUITIES. THE ASSESSEE COMPANY MAINTAINED SEPARATE IDENTIFIABLE RECORDS OF THE EQUITIES IN WHICH THE ASSESSEE TRADED AND THE EQUITIES IN WHICH THE INVESTMENT WAS MADE ON LONG - TERM BASIS BASED ON APPROVAL FROM BOARD OF D IRECTORS. THE LEARNED AR FURTHER SUBMITTED THAT THE INVESTMENT WAS MADE OUT OF SELF GENERATED FUNDS AND CAPITAL AND NO MONEY WERE BORROWE D FOR MAKING INVESTMENTS. THE LEARNED AR AL SO SUBMITTED THAT NO CREDIT OF SECURITY TRANSITION T AX (STT) WAS CLAIMED BECAUSE OF DECLARING THE GAIN UNDER THE HEAD CAPITAL GAIN . IT WAS ALSO SUBMITTED THAT BESIDES DISPOSING OF INVESTMENT MADE ON LONG - TERM BASIS, THE ASSESSEE ALSO TRADED IN SOME OF THE SECURITIES WHICH RESULTED IN BUSINESS INCOME AND SAME WAS DECLARED UNDER THE HEAD PROFIT AND GAINS OF BUSINESS OR PROFESSION . IT WAS FURTHER SUBMITTED THAT IN THE NOTES TO ACCOUNT APPENDED TO THE A UDITED BALANCE SHEET THE IN VENTORY WAS VALUED AT COST OR MARKET PRICE WHICHEVER IS LESS WHEREAS THE INVESTMENT WAS VALUED AT IT S COST ONLY. THE LEARNED A R REFERRED TO THE CIRCULAR NO. 4/2007 DATED 15 /06/2007 ISSUED BY THE CENTRAL BOARD OF DIRECT T AXES (CBD T) AND SUBMITTED THAT THE ASSESSEE SATISFIED ALL THE CONDITIONS OF HAVING ACTIVITY IN THE NATURE OF INVESTMENT. FURTHER , LEARNED AR SUBMITTED THAT THE ASSESSING OFFICER HAS ACCEPTED THE LONG - TERM CAPITAL GAIN ON SALE OF SECURITIES HELD UNDER THE INVESTMENT CATEGORY, BUT NOT ACCEPTED SHORT - TERM CAPITAL GAIN WHICH AROSE ON SALE OF SECURITIES HELD UNDER T HE SAME CATEGORY OF INVESTMENT. THE LEARNED AR SUBMITTED THAT THE AUTHORITIES BELOW DID NOT ACCEPT THE RESOLUTION OF BOARD OF DIRECTORS AS EVIDENCE WHEREAS AS PER SECTION 194 OF THE C OMPANIES ACT , THE MINUTES OF MEETING KEPT IN ACCORDANCE WITH THE PROVISIONS OF SECTION 193 OF THE C OMPANIES ACT SHALL BE EVIDENCE OF THE 5 ITA NOS. 4411/DEL/2013; 1946/DEL/2012 & 5264/DEL/2012 PROCEEDINGS RECORDED THEREIN. THE LEARNED AR RELIED ON THE JUDGMENT OF THE HON BLE DELHI HIGH COURT IN THE CASE OF ADDITIONAL COMMISSIONER OF INCOME T AX VS. E NGINEERING W ORKS LTD . REPORTED IN 113 ITR 389 WHEREIN IT IS HELD THAT THE I NCOME TAX O FFICER NOT BEING A COURT CAN RELY UPON THE MATERIAL BEING WHICH MAY NOT BE STRICTLY EVIDEN CE ADMISSIBLE U NDER THE INDIAN E VIDENCE ACT FOR THE PURPOSE OF MAKING AN ORDER OF ASSESSMENT AND THE ADMINISTRATIVE AND QUASI - JUDICIAL AUTHORITIES CAN TAKE OFFICIAL NOTICE OF WIDER VARIETY OF THE FACTS WHICH NEED NOT BE PROVED BEFORE THEM. THE LEARNED AR FURTHER REFERR ED TO THE RECENT CIRCULAR DATED 29 TH FEBRUARY 2016 ISSUED BY THE CENTRAL BOARD OF DIRECT T AXES (CBDT) AND SUBMITTED THAT THE CBDT HAS DIRECTED THE ASSESSING OFFICER NOT TO PUT IN DISPUTE THE TRANSFER OF LISTED SHARES AND SECURITIES RESULTING INTO CAPITAL GAIN. THE LEARNED AR ALSO DRAWN OUR ATTENTION TOWARDS PAGE 100 OF THE PAPER BOOK SHOWING TH E HOLDING PERIOD OF VARIOUS SECURITIES SOLD RESULTING INTO SHORT - TERM CAPITAL GAIN. IN SUPPORT OF THE CONTENTION OF PURCHASE AND SALE OF SECURITIES RESULTING INTO SHORT - TERM CAPITAL GAIN, THE AR RELIED ON THE DECISION OF THE TRIBUNAL , DELHI B ENCH IN THE CA SE OF DCIT VS. RAJASTHAN G LOBAL S ECURITIES LTD . IN ITA NO. 106/DEL/2014 AND JUDGMENT OF THE HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS. AMIT JAIN IN ITA 517/2012. 7. ON THE CONTRARY , THE LD . DR RELYING ON THE ORDERS OF THE AUTHORITIES BELOW SUBMITTED THAT IN ACCORDANCE TO CIRCULAR NO. 4/2000 OF THE CBDT , THE ASSESSEE WAS REQUIRED TO MAINTAIN TWO SEPARATE ACCOUNTS, ONE FOR TRADING , ANOTHER FOR INVESTMENT , WHEREAS THE ASSESSEE WAS HAVING ONLY ONE DEMAT A CCOUNT FOR ALL THE TRANSACTIONS OF THE ACTIVITY OF PURCHASE AND SALE OF SECURITIES. SHE FURTHER SUBMITTED THAT WHETHER PARTICULAR TRANSACTION IS IN THE NATURE OF BUSINESS OR CAPITAL GAIN IS DECIDED ON CUMULATIVE APPRECIATION OF ALL THE FACTORS LIKE THE VOLUME, FREQUENCY AND CONSISTENCY OF TRANSACTIONS, HOL DING PERIOD, INTENTION, FUNDS UTILIZED AND ENTRIES IN BOOKS OF ACCOUNTS ETC . AND NOT BY THE EXISTENCE OF ONE OR TWO FACTORS ONLY. SHE FURTHE R SUBMITTED THAT CIRCULAR NO. 6/ 2016 ISSUED BY THE CBDT WAS SPECIFICALLY IN RESPECT OF LISTED SHARES AND SECURITIES HELD FOR MORE THAN 12 MONTHS AND IN ALL OTHER CASES THE NATURE OF TRANSACTION SHALL 6 ITA NOS. 4411/DEL/2013; 1946/DEL/2012 & 5264/DEL/2012 CONTINUE TO BE DECIDED KEEPING IN VIEW THE EARLIER CIRCULAR NO. 4/2007 OF THE CBDT. SH E ALSO SUBMITTED THAT BIFURCATIONS OF THE SECURITIES IN THE INVESTMENT IN TRADING HAS BEEN DONE BY THE ASSESSEE ONLY ARTIFICIALLY TO HAVE THE BENEFIT OF THE LOWER TAX RATES WITHOUT BEING ELIGIBLE FOR THE SAME. THE LD. DR SUPPORTED HER CONTENTION WITH THE JUDGMENT OF THE HON BLE J URISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. D & M C OMPONEN TS LTD . IN ITA 561/2012 , PRONOUNCED ON 21/04/ 2014. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD INCLUDING THE PAPER BOOKS SUBMITTED BY THE ASSESSEE. THE ONLY ISSUE FOR DETERMINATION BEFORE US IS WHETHER THE INCOME FROM SALE OF SHARES AND SECURITIES SHOWN BY THE ASSESSEE UNDER THE HEAD SHORT - TERM CAPITAL GAIN IS LIABLE FOR TAX UNDER THE HEAD PROFIT AND GAINS OF BUSINESS AS CLAIMED BY THE R EVENUE OR SHORT - TERM CAPITAL GAIN AS CLAIMED BY THE ASSESSEE. 9. IN THE CASE OF DCIT VS. RAJASTHA N GLOBAL SECURITIES LTD (SUPRA) , THE ASSESSEE SHOWN SALE OF SHARES OF SATYAM C OMPUTER LTD . UNDER THE HEAD SHORT - TERM CAPITAL GAIN , WHICH WAS ASSESSED BY THE AO UNDER THE HEAD BUSINESS INCOME . THE TRIBUNAL IN THE AFORESAID CASE HELD AS UNDER : 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. BEFORE PROCEEDING FURTHER, WE WANT TO MAT IT CLEAR THAT ANY DECISION TO HOLD SHARES AS INVESTMENT OR STOCK - IN - TRADE DEPENDS ON A HOST OF FACTORS. THERE CAN BE NO SI NGLE CRITERIA TO DE CIDE THE NATURE OF SHARES PURCHASES. IN FACT, IT IS THE CUMULATIVE EFFECT OF ALL THE RELEVANT FACTORS, WHICH IS TAKEN INTO CONSIDERATION FOR REACHING A CONCLUSION AS REGARDS THE NATURE OF SHARES AND THE RESULTANT INCOME ARISING FROM THEI R TRANSFER. THERE MAY BE SOME FACTORS INDICATING THE PURCHASE OF SHARES AS INVESTMENT, WHILE OTHERS MAY POINT TOWARDS STOCK - IN - TRADE. IT IS THE HOLISTIC CONSIDERATION OF ALL SUCH FAC TORS WHICH IS KEPT IN VIEW WHILE DECIDING AS TO WHETHER THE SHARES PURCHAS ED BY THE ASSESSEE CONSTITUTED STOCK - IN - TRADE OR INVESTMENT. 10. I N THE CASE OF CIT VS. AMIT JAIN (SUPRA) THE HON BLE HIGH COURT AFTER TAKING INTO CONSIDERATION A NUMBER OF DECISIONS ON THE ISSUE , HELD AS UNDER: 8. THE FACTORS WHICH COURTS AND TRIBUNAL S HAVE TO TAKE INTO CONSIDERATION WHILST DECIDING WHETHER INCOME GAINED DURING A PARTICULAR PERIOD IS BUSINESS INCOME THROUGH PURCHASE AND SALE OF SHARES OR OTHER TRADABLE CAPITAL ASSETS, OR CAPITAL GAINS ON ACCOUNT OF SALE OF SUCH ASSETS, HAS BEEN SPELT O UT AND REITERATED IN A NUMBER OF DECISIONS. THESE INCLUDE RAJA BAHADUR VISHESHWAR SINGH V. CIT , (1961) 41 ITR 685 (SC); COMMISSIONER OF INCOME TAX, U.P V. MADAN GOPAL RADHEY LAL , [1969] 73 ITR 7 ITA NOS. 4411/DEL/2013; 1946/DEL/2012 & 5264/DEL/2012 652 (SC); COMMISSIONER OF INCOME TAX V ASSOCIATED INDUSTRIAL DEVELOPMENT COMPANY 82 ITR 586 (SC); P.M. MOHAMMED MEERAKHAN V. COMMIS SIONER OF INCOME - TAX, KERALA, 73 ITR 735 (S.C.) AND COMMISSIONER OF INCOME TAX V NSS INVESTMENTS LTD 2007 (277) ITR 149 (MAD). IT WAS IN THE LIGHT OF THESE DECISIONS THAT THE CBDT CIRCULAR NO. 4/2007 , WAS ISSUED, INDICATING THE PRINCIPLES APPLICABLE IN TH IS REGARD. THESE CRITERIA ARE: (1) INTENTION OF THE ASSESSEE AT THE TIME OF PURCHASE OF THE SHARES. THIS CAN BE FOUND OUT FROM THE TREATMENT GIVEN TO THE PURCHASE IN THE ASSESSEE'S BOOKS OF ACCOUNT. (2) DID THE ASSESSEE BORROW MONEY TO PURCHASE THE S HARES, AND PAID INTEREST FOR IT. MONEY IS GENERALLY BORROWED TO PURCHASE GOODS FOR THE PURPOSES OF TRADE AND NOT FOR INVESTING IN AN ASSET FOR RETAINING. (3) VOLUME AND FREQUENCY OF THE PURCHASES AND SALE/DISPOSALS. IF PURCHASE AND SALES ARE FREQUENT, OR THERE ARE SUBSTANTIAL TRANSACTIONS IN AN ITEM, THAT CAN INDICATE TRADE. HABITUAL DEALING IN A PARTICULAR ITEM IS INDICATIVE OF INTENTION OF TRADE. LIKEWISE, RATIO BETWEEN THE PURCHASES AND SALES AND THE HOLDINGS MAY SHOW WHETHER THE ASSESSEE IS TRAD ING OR INVESTING (HIGH TRANSACTIONS AND LOW HOLDINGS INDICATE TRADE WHEREAS LOW TRANSACTIONS AND HIGH HOLDINGS INDICATE INVESTMENT). ANOTHER RELATED FACTOR IS THE DURATION FOR WHICH THE SHARES ARE HELD. (4) WAS THE PURCHASE AND SALE MADE FOR REALIZING PROFIT, OR FOR RETENTION AND APPRECIATION IN ITS VALUE. THE FORMER INDICATES THE PURCHASES BEING PART OF TRADE; AND THE LATTER IS INDICATIVE OF THE PURCHASES BEING AN INVESTMENT. FURTHERMORE, IT WOULD BE RELEVANT TO ASK WHETHER THE INTENTION BEHIND THE PURCHASE WAS TO ENJOY DIVIDEND, OR MERELY TO EARN PROFIT ON SALE OF SHARES. IMPORTANTLY, A COMMERCIAL MOTIVE IS AN ESSENTIAL INGREDIENT OF TRADE IN THIS CONTEXT. (5) WHETHER THE ITEMS IN QUESTION WERE VALUED AT COST. IF SO, IT WOULD INDICATE THAT THEY WERE INVESTMENTS. WHERE THEY WERE VALUED AT COST OR MARKET VALUE OR NET REALIZABLE VALUE, WHICHEVER IS LESS, IT WILL INDICATE THAT ITEMS WERE TREATED AS STOCK - IN - TRADE. (6) FINALLY, IT WOULD BE RELEVANT TO CONSIDER H OW THE ASSESSEE IS AUTHORIZED IN ITS MEMORANDUM / ARTICLES. IN THE PRESENT CASE, THERE IS NO DISPUTE THAT THE OPENING INVESTMENT COST FOR THE RELEVANT YEAR AY 2006 - 07 WAS RS.2.60 CRORES; THE CORRESPONDING CLOSING VALUE WAS RS.4.70 CRORES. FURTHERMORE, THE COURT NOTICES THAT THE ASSESSEE DERIVED, IN ADDITION TO THE SHORT TERM CAPITAL GAINS, DIVIDEND INCOME TO THE TUNE OF NEARLY RS.10 LAKHS. THE AUTHORITIES HAVE ALL EMPHASISED THAT EVEN WHILE SEEING THE CUMULATIVE EFFECT OF THE TESTS, IN THE GIVEN FACTS OF A CASE, ONE TEST MIGHT BE DETERMINATIVE OR CONCLUSIVE. AT THE SAME TIME, NO SINGLE TEST HAVING REGARD TO THE FACTS OF A CASE AND A CUMULATIVE EFFECT THEREOF, NEED BE DETERMINATIVE OR CONCLUSIVE. IN THE PRESENT INSTANCE WHAT IS APPARENT IS THAT THE ASSESSEE, AN INDIVIDUAL, DID NOT BORROW ANY FUNDS; THE SHARE SCRIPTS TRADED WERE ONLY FROM AMONGST WHAT WERE HELD BY HIM. SIGNIFICANTLY, DIVIDEND INCOME AMOUNTING TO ABOUT 4% OF THE VALUE OF THE INVESTMENT WAS EARNED BY THE ASSESSEE. WHAT APPEARS TO HAVE WEIGHED AL MOST CONCLUSIVELY WITH THE TAX AUTHORITIES IN THE FIRST AND SECOND INSTANCE IS THE VALUE AND FREQUENCY OF THE TRANSACTIONS. AS UNDERLINED BY US, THAT FACTOR ALONE CANNOT BE CONCLUSIVE AND WOULD HAVE TO BE WEIGHED ALONG WITH THE TOTALITY OF 8 ITA NOS. 4411/DEL/2013; 1946/DEL/2012 & 5264/DEL/2012 FACTS. AN IMPORT ANT DETAIL WHICH CANNOT BE OVERLOOKED BY THE COURT IS THAT IN ALL PAST PERIODS AND EVEN SUBSEQUENT PERIODS, SIMILAR INCOME REPORTED BY THE ASSESSEE WAS ACCEPTED BY THE REVENUE AS SHORT TERM CAPITAL GAIN. IN FACT FOR AY 2005 - 06, THE SCRUTINY ASSESSMENT UNDE R SECTION 143 (3) ACCEPTED THE SUM OF RS.1.02 CRORES AS SHORT TERM CAPITAL GAIN. IN THE CIRCUMSTANCES, IT WAS ALL THE MORE NECESSARY FOR THE REVENUE TO POINT TO SOME UNIQUE FEATURE OR DISTINCTIVE MATERIAL TO DIFFERENTIATE THE ASSESSEE'S ACTIVITIES FOR THE SUBJECT ASSESSMENT YEAR, SINCE THEY FUNDAMENTALLY REMAINED THE SAME AND UNCHANGED. 11. I N THE CASE OF CIT VS. D&M C OMPONENTS LTD . (SUPRA) , THE ASSESSEE DISCLOSED LO NG - TERM CAPITAL GAIN OF RS. 31,13, 006/ - AND SHO RT - TERM CAPITAL GAIN OF RS. 26,82, 115/ - . THE ASSESSING OFFICER HAVING REGARD TO THE NORMAL BUSINESS ACTIVITY OF THE ASSESSEE AND PATTERN OF SALE AND PURCHASE OF TRANSACTION, ESPECIALLY SINCE NO BOOKS WERE SEPARATELY MAINTAINED FOR THE PURPOSE HEL D BOTH THE LONG - TERM CAPITAL GAIN AS WELL AS SHORT - TERM CAPITAL GAIN AS BUSINESS INCOME OF THE ASSESSEE. THE LD. CIT(A) ACCEPTED THE CONTENTION OF THE ASSESSEE WITH REGARD TO LONG - TERM CAPITAL GAIN, HOWEVER AGREED WITH THE ASSESSING OFFICER IN TAXING THE I NCOME SHOWN UNDER THE HEAD SHORT - TERM CAPITAL GAIN AS BUSINESS INCOME . WHEN THE MATTER TRAVELLED TO THE TRIBUNAL, BOTH THE INCOME FROM SHORT - TERM AND LONG - TERM CAPITAL GAIN SHOWN BY THE ASS ESSEE WERE ACCEPTED. ON APPEAL, THE HON BLE DELHI HIGH COURT ALLO WED THE CLAIM OF THE ASSESSEE IN RESPECT OF LONG - TERM CAPITAL GAIN, HOWEVER , THE CLAIM OF SHORT - TERM CAPITAL GAIN WAS NOT ACCEPTED. THE FINDING S OF THE HON BLE HIGH COURT IN THIS RESPECT ARE AS UNDER: 7. AS FAR AS THE REVENUE'S APPEAL WITH RESPECT TO LONG TERM CAPITAL GAINS IS CONCERNED, THIS COURT IS INCLINED TO AFFIRM THE FINDINGS OF THE CIT (A) AND THOSE CONTAINED IN THE IMPUGNED ORDER. HERE, THE RECORD ITA 561/2012 & ITA 566/2012 PAGE 6 DISCLOSED THAT THE TRANSACTIONS WERE FEW IN NUMBER - 10 SALE/PURCH ASES. MOREOVER, THE PURCHASES WERE SHOWN AS INVESTMENTS IN THE BALANCE SHEETS FOR SEVERAL YEARS BEFORE THEIR SALE AND CLAIM FOR LONG TERM CAPITAL GAINS. THERE IS NOTHING ON THE RECORD TO SHOW THAT THESE WERE PURCHASED WITH BORROWED FUNDS. IN THESE CIRCUMST ANCES, THE FINDINGS OF THE ITAT WITH RESPECT TO THE AMOUNT CLAIMED AS LONG TERM CAPITAL GAINS ARE SOUND AND DO NOT CALL FOR INTERFERENCE. 8. THE POSITION WITH REGARD TO SHORT TERM CAPITAL GAINS, HOWEVER, IS DIFFERENT. THE AO AND CIT(A) HELD THAT SEPARATE B OOKS WERE NOT USED. AMOUNTS WERE FREELY TRANSFERRED FROM THE PROFITS GAINED TO BUSINESS AND VICE - VERSA. HOWEVER, PERHAPS THE SINGLE - MOST TELLING CIRCUMSTANCE IS THE KIND OF TRANSACTIONS WHICH TH E CIT (A) NOTICED IN PARAGRAPH 5 9 ITA NOS. 4411/DEL/2013; 1946/DEL/2012 & 5264/DEL/2012 (C) OF HIS ORDER. A CHART REF LECTING THE VOLUME, FREQUENCY, DURATION (OF HOLDING) CRITERIA WAS PREPARED AND REPRODUCED IN THE COMMISSIONER'S ORDER. THAT CHART WAS ONLY ILLUSTRATIVE, AND IS EXTRACTED BELOW: NAME OF THE SHARE PURCHASE DATE SALE DATE JIND AL PHOTO 07.04.2005 07.04.2005 INFOTECH LTD. 22.04.2005 22.04.2005 ZEE TELE 02.05.2005 16.05.2005 ZEE TELE 02.05.2005 17.05.2005 S AM ELE DEVELOPMENT 23.05.2005 23.05.2005 MAHABIR SPINNING MILLS 25.05.2005 08.06.2005 MAHABIR SPINNING MILLS 25.05.2005 09.06.2005 MAHABIR SPINNING MILLS 26.05.2005 09.06.2005 MAHABIR SPINNING MILLS 26.05.2005 10.06.2005 MAHABIR SPINNING MILLS 26.05.2005 13.06.2005 MAHABIR SPINNING MILLS 27.05.2005 13.06.2005 KRISHAN ENGINEERING 25.08.2005 30.08.2005 KRIS HAN ENGINEERING 26.08.2005 30.08.2005 KRISHAN ENGINEERING 26.08.2005 06.09.2005 KRISHAN ENGINEERING 26.08.2005 09.09.2005 RAJESH EXPORTS 24.08.2005 16.09.2005 RAJESH EXPORT S 24.08.2005 19.09.2005 RAJESH EXPORTS 25.08.2005 19.09.2005 RAJESH EXPORTS 16.09.2005 19.09.2005 P.B. INFRA 28.11.2005 28.11.2005 P.B. INFRA 28.11.2005 02.12.2005 9. APART FROM THE ABOVE SIGNIFICANT ASPECT, THE AO AND THE CIT (A) OBSERVED THAT THE ASSESSEE HAD BEEN PURCHASING AND SELLING A LARGE NUMBER OF SHARES OF A FEW COMPANIES. IT WAS ALSO HELD THAT T HE TRANSACTIONS INVOLVED LARGE OR SUBSTANTIAL SUMS OF MONEY. THE CIT (A) PERTINENTLY MADE THE FOLLOWING OBSERVATIONS: 10 ITA NOS. 4411/DEL/2013; 1946/DEL/2012 & 5264/DEL/2012 '...IT IS IMPORTANT TO KEEP IN MIND THAT WHENEVER ANY SHARE IS PURCHASED WITH THE INTENTION OF INVESTMENT, IT CANNOT BE SOLD OFF WITHIN A VERY SHORT SPAN OF TIME, SINCE THE SHARE MARKET IS ALWAYS FLUCTUATING. SINCE IN THE PRESENT CASE, VERY FREQUENT PURCHASE AND SALE OF SHARES HAVE BEEN DONE IT INDICATES THAT THE MAIN INTENTION OF THE APPELLANT WAS TO EARN INCOME OUT OF THESE SHARES WHICH HA VE BEEN CLAIMED TO BE UNDER THE HEAD OF SHORT TERM CAPITAL GAINS....' 10. IN COMMISSIONER OF INCOME TAX V ASSOCIATED INDUSTRIAL DEVELOPMENT COMPANY (P) LTD. 82 ITR 586 (SC) THE SUPREME COURT HELD THAT: 3 .IT WAS OPEN TO THE ASSESSEE TO CONTEND THAT EVEN O N THE ASSUMPTION THAT IT HAD BECOME A DEALER AND WAS NO LONGER AN INVESTOR IN SHARES THE PARTICULAR HOLDINGS WHICH HAD BEEN CLEARED AND THE SALES OF WHICH HAD RESULTED IN THE PROFIT IN QUESTION HAD ALWAYS BEEN TREATED BY IT AS AN INVESTMENT. IT CAN HARDLY BE DISPUTED THAT THERE WAS NO BAR TO A DEALER INVESTING IN SHARES. BUT THEN THE MATTER DOES NOT REST PURELY ON THE TECHNICAL QUESTION OF ONUS WHICH UNDOUBTEDLY IS INITIALLY ON THE REVENUE TO PROVE THAT A PARTICULAR ITEM OF RECEIPT IS TAXABLE. WHETHER A PAR TICULAR HOLDING OF SHARES IS BY WAY OF INVESTMENT OR FORMS PART OF THE STOCK - IN - TRADE IS A MATTER WHICH IS WITHIN THE KNOWLEDGE, OF THE ASSESSEE WHO HOLDS THE SHARES AND IT SHOULD, IN NORMAL CIRCUMSTANCES, BE IN A POSITION TO PRODUCE EVIDENCE FROM ITS RECO RDS AS TO WHETHER IT HAS MAINTAINED ANY DISTINCTION BETWEEN THOSE SHARES WHICH ARE ITS STOCK - IN - TRADE AND THOSE WHICH ARE HELD BY WAY OF INVESTMENT.' P.M. MOHAMMED MEERAKHAN V. COMMISSIONER OF INCOME - TAX, KERALA , 73 ITR 735 (SC) IS ANOTHER JUDGMENT OF THE SUPREME COURT HOLDING THAT IT WAS NOT POSSIBLE TO EVOLVE ANY SINGLE LEGAL TEST OR FORMULA WHICH COULD BE APPLIED IN DETERMINING WHETHER A TRANSACTION WAS AN ADVENTURE IN THE NATURE OF TRADE OR NOT. THE AN SWER TO THE QUESTION MUST NECESSARILY DEPEND IN EACH CASE ON THE TOTAL IMPRESSION AND EFFECT OF ALL THE RELEVANT FACTORS AND CIRCUMSTANCES PROVED THEREIN AND WHICH DETERMINE THE CHARACTER OF THE TRANSACTION. 11. HAVING REGARD TO THE SHORT DURATION OF HOLDI NG OF THE SHARES, AND THE LACK OF CLARITY IN THE ACCOUNT BOOKS, THIS COURT HOLDS THAT THE OVERALL EFFECT WOULD BE TO REVEAL THAT THE SALE AND PURCHASE OF SHARES IN RESPECT OF 26,82,115/ - AS SHORT TERM CAPITAL GAIN CANNOT BE SUSTAINED. ACCORDINGLY THE ORDE R OF THE ITAT IS SET ASIDE TO THE SAID ITA 561/2012 & ITA 566/2012 PAGE 9 EXTENT. THE SAID AMOUNT SHALL BE TREATED AS BUSINESS INCOME AND NOT CAPITAL GAINS. THE QUESTION OF LAW IS ACCORDINGLY ANSWERED IN FAVOUR OF THE REVENUE IN ITA NO. 561/2012. THE SAID APPEAL IS ALLOWED. ITA 566/2012 FILED BY THE REVENUE, IN RESPECT OF THE LONG TERM CAPITAL GAIN, HAS TO FAIL AND IS ACCORDINGLY DISMISSED. 12. IN THE LIGHT OF ABOVE DECISIONS, WE ARE REQUIRED TO EXAMINE EXISTENCE OF VARIOUS FACTORS, WHICH ON CONSIDERING IN HOLISTIC MANNER DETERMINE WHETHER THE NATURE OF TRANSACTIONS OF PURCHASE AND SALE OF SECURITIES FALLS IN THE CATEGORY OF PROFIT AND GAINS OF BUSINESS OR CAPITAL GAIN. 13. AS REGARDS TO THE ARGUMENT OF THE LEARNED AR THAT LONG - TERM CAPITAL GAIN TRANSACTIO NS HAVE BEEN ACCEPTED BY THE AO, WHEREAS SHORT - TERM CAPITAL GAIN TRANSACTIONS HAVE NOT BEEN ACCEPTED, WE FIND FROM PAGE 102 OF THE ASSESSEE S 11 ITA NOS. 4411/DEL/2013; 1946/DEL/2012 & 5264/DEL/2012 PAPER BOOK THAT IN CASE OF LONG TERM CAPITAL GAIN THE ASSESSEE TRANSACTED IN 5 SCRIPS ONLY AND THE HOLDING PERIOD WAS APPROXIMATELY 400 DAYS. THESE SHARES WERE PURCHASED IN THE FINANCIAL YEAR 2005 - 06 FOR LONG - TERM HOLDING. WE FIND FROM THE RECORDS THAT NO BORROWED FUNDS HAVE BEEN UTILIZED FOR INVESTMENT IN THESE SHARES. IN THE CIRCUMSTANCES, THE HON BLE HIGH COURT IN THE CASE OF M/S . D & M C OMPONENTS LTD . (SUPRA) HAS ALSO AFFIRMED THE TRANSACTIONS IN THE CATEGORY OF LONG - TERM CAPITAL GAIN AND WE DO NOT FIND ANY ERROR IN ACCEPTING THESE TRANSACTIONS BY THE AO AS LONG - TERM CAPITAL GAIN. IN THE CASE OF M/S . D & M C OMPONEN TS LTD . (SUPRA), THE HON BLE HIGH COURT HAS ACCEPTED THE TRANSACTION OF LONG - TERM CAPITAL GAIN, HOWEVER THE TRANSACTIONS CLAIMED BY THE ASSESSEE AS SHORT - TERM CAPITAL GAIN ARE HELD TO BE IN THE NATURE OF BUSINESS INCOME, THUS , RESPECTFULLY FOLLOWING THE JU DGMENT OF THE HON BLE HIGH COURT, WE DON T FIND ANY ERROR IN ACCEPTING THE TRANSACTIONS OF LONG - TERM CAPITAL GAIN & SIMULTANEOUSLY NOT ACCEPTING THE TRANSACTION OF SHORT - TERM CAPITAL GAIN BY THE AO. 14. ONE OF THE FACTORS IS THE UTILIZATION OF THE BORROWED FUNDS. IN THE CASE OF ASSESSEE, FUNDS CONTRIBUTED THROUGH CAPITAL WERE TO BE UTILIZED IN THE BUSINESS OF MANUFACTURING AND TRADE OF POWER CONTROL EQUIPMENTS, HOWEVER, THE SAME WAS UTILIZED IN PURCHASE AND SALE OF SECURITIES. T HOUGH NO BORR OWED FUNDS UTILIZED , BUT THE FUNDS MEANT FOR BUSINESS ACTIVITY HAVE BEEN UTILIZED TOWARDS PURCHASE AND SALE OF SECURITIES AND NO SURPLUS FUNDS GENERATED FROM BUSINESS ACTIVITY HAVE BEEN INVESTED IN THE PURCHASE AND SALE OF SHARES. 15. ANOTHER FACTOR TO B E OBSERVED IS THE MAINTENANCE OF BOOKS OF ACCOUNTS AND OTHER RECORDS. WE FIND THAT THE ASSESSEE HAS MAINTAINED SEPARATE LEDGER ACCOUNTS FOR SHARES IN THE CATEGORY OF INVESTMENT AND IN THE CATEGORY OF STOCK IN TRADE BUT NO SEPARATE BOOKS OF ACCOUNTS HAVE BE EN MAINTAINED AND THE AMOUNTS WERE TRANSFERRED FROM INVESTMENT TO STOCK IN TRADE, WHICH IS EVIDENT FROM THE NOTE 9 OF S CHEDULE 14 OF FINANCIAL STATEMENTS FOR THE YEAR ENDING ON 31/03/2007, WHICH IS PLACED AT PAGES 150 OF THE PAPER BOOK. WE ALSO FIND THAT N O SEPARATE DEMAT ACCOUNT IS MAINTAINED IN RESPECT OF INVESTMENT ACTIVITY. IN CLAUSE 8 ( A ) OF 12 ITA NOS. 4411/DEL/2013; 1946/DEL/2012 & 5264/DEL/2012 F ORM NO. 3 CD FOR THE YEAR UNDER CONSIDERATION, WHICH IS PLACED AT PAGE NO. 118 OF THE PAPER BOOK, THE AUDITOR HAS MENTIONED THE BUSINESS OR PROFESSION OF THE ASSES SEE A S DEALING IN SECURITIES OF BUSINESS AND INVESTMENTS. WE FIND THAT MINUTES OF MEETING OF DIRECTOR OR BOARD RESOLUTION ONLY CANNOT DECIDE WHETHER THE SALE TRANSACTIONS ARE IN THE CATEGORY OF INVESTMENT. 16. ONE OF THE ANOTHER IMPORTANT FACTOR IS THE V OLUME, FREQUENCY AND CONSISTENCY OF TRANSACTIONS. T HE ASSESSEE HAS PROVIDED DETAILS OF SHARES TRANSACTIONS O N PAGES 100 TO 101 OF THE PAPER BOOK UNDER THE HEAD SHORT - TERM CAPITAL GAIN , WHICH ARE REPRODUCED AS UNDER : DETAIL OF SHORT TERM CAPITAL GAIN WITH HOLDING PERIOD NAME OF S NO OF SHARES DATE OF SALE SALE PRICE WITH STT DATE OF PURCHASE PURCHASE COST WITHOUT STT CAPITAL GAIN HOLDING PERIOD STCG ON 0 TO 90 DAYS HODINA P ERIOD ERA CONSTR 7782 19.02.2007 3,418,535 5 02.2007 3,836,068 (417,532) 14 ERA CONSTR 4657 19.02.2007 2,047,303 5.02.2007 2,295,627 (248,324) 14 ERA CONSTR 10360 20.02.2007 4,570,525 5.02.2007 5,106,870 (536,345) 15 ERA CONSTR 12108 20.02.2007 5,345,682 5.02.2007 5,968,531 (622,848) 15 ERA CONSTR 5500 21.02.2007 2,435,103 5 02.2007 2,711,176 (276,073) 16 ERA CONSTR 4500 21.02.2007 1,993,690 5.02.2007 2,218,235 (224,545) 16 YES BANK 5000 12.03.2007 621,949 15.02 .2007 749,632 (127,684) 25 YES BANK 5000 12.03.2007 621,949 5.03.2007 667,372 (45,423) 7 TOTAL 21,054,736 23,553,510 (2,498,774) STCG ON 9 1 TO180 DAY S HODINQ PERIOD KARUTURI.CC 7000 24.04.2006 1,014,900 30.11.2005 643,173 371,727 145 KARUTURI.CC 5000 25.04.2006 761,061 .11 & 1.12.20 460,708 300,353 146 KARUTURI.CC 20000 26.04.2006 3,195,776 1.12.2005 1,850,626 1,345,150 147 MAWANA S 3859 26.04.2006 462,840 7 12.2005 384,720 78,119 141 RIGA SUGAI 15000 26.04.2006 2,104,617 12.01.2006 1,397,680 706,937 136 KARUTURI.CC 5000 27.04.2006 838,769 1.12.2005 462,656 376,113 148 RIGA SUGA 900 27.04.2006 125,617 12.01.2006 83,861 41,756 137 KARUTURI.CC 5000 28.04.2006 880,651 1.12.2005 462,656 417,995 148 RIGA SUGA 9100 28.04.2006 1,192,065 12.01.2006 847,926 344,139 138 ALPS INDUS 15000 05.05.2006 3,843,774 23.01.2006 2,160,379 1,683,395 102 PBA 25000 05.05.2006 4,322,383 28.11.2005 2,371,534 1,950,848 97 ITC LIMITE< 15000 05.06.2006 2,438,219 09.12.2005 2,040,415 397,804 178 LOK HOUSIR 10000 21.09.2006 2,377,627 12.04.2006 3,710,760 (1,333,133) 162 TOTAL 23,558,298 16,877,095 6,681,204 13 ITA NOS. 4411/DEL/2013; 1946/DEL/2012 & 5264/DEL/2012 STCG ON 181 TO 270 DAYS HODING PERIOD ITC LIMITEC 10000 05.06.2006 1,625,479 28.11.2005 1,388,933 236,547 189 MC NALLY B 5000 05.06.2006 548,387 29.11.2005 493,098 55,289 188 KARUTURI.CC 8000 14 08.2006 846,608 1.12.2005 740,250 106,357 256 KARUTURI.CC 10000 14.08.2006 1,058,260 31.01.2006 1,053,474 4,786 195 ERA CONSTR 5000 6.09.2006 1,634,209 1.12.2005 695,868 938,341 279 ERA CONSTR 3000 11.09.2006 961,716 1 12.2005 417,521 544,195 284 MC NALLY B 4682 14.09.2006 499,358 29 11,2005 461,737 37,621 289 LOK HOUSIR 10000 19.09.2006 2,568,166 10.02.2006 697,437 1,870,729 221 LOK HOUSIR 25000 19.09.2006 6,420,415 14.02.2006 1,827,627 4,592,788 217 LOK HOUSIR 1000 19.09.2006 256,817 20.02.2006 84,642 172,175 211 LOK HOUSIR 17000 20.09.2006 4,156,762 20.02.2006 1,438,907 2,717,854 212 LOK HOUSIR 7000 21.09.2006 1,664,339 20.02.2006 592,491 1,071,848 213 M C NALLY B 682 6.10.2006 75,879 06.02.2006 78,247 (2,368) 242 MC NALLY B 1500 9.10.2006 175,171 6.02.2006 172,097 3,075 245 MC NALLY B 7500 11.10.2006 825,824 02. & 7.02.20 860,814 (34,991) 246 TOTAL 23,317,389 11,003,142 12,314,247 STCG ON 271 TO ABOVE HODING PERIOD ERA CONSTR 5000 5.10.2006 1,699,134 1.12.2005 695,868 1,003,266 308 ERA CONSTR 3000 6.10.2006 1,069,229 1.12.2005 417,521 651,708 309 ME NALLY B 318 6.10.2006 35,381 29.11.20005 31,361 4,019 311 ERA CONSTR 2000 9.10.2006 703,109 1.12.2005 2.78,347 424,762 312 NTPC 10000 7.11.2006 1,306,815 28.11.2005 1,078,197 228,618 344 OM METALS 3000 1.02.2007 179,529 13.02.2006 118,769 60,760 353 ANSAL HOU: 1034 2.02.2007 401,825 26.04.2006 411,818 (9,993) 282 ANSAL HOU: 3966 2.02.2007 1,541,265 26.04.2006 1,579,565 (38,300) 282 RELIANCE C 250 2.02.2007 163,980 28.01.2006 60,410 103,570 370 MADHAV M 5000 2.02.2007 725,297 10.04.2006 579,521 145,776 298 OM METALS 20225 2.02.2007 1,255,144 13.02.2006 800,703 454,441 354 OM METALS 26000 7.02.2007 1,609,164 13.02.2006 1,029,334 579,831 359 MADHAV M 10000 7.02.2007 1,438,146 10.04.2006 1,159,042 279,104 298 NTPC 10000 21.03.2007 1,423,568 22.05.2006 1,053,817 369,751 303 TOTAL 13,551,585 9,294,271 4,257,313 - GROSS 351016 120,854,544 74,349,017 46,505,527 17. WE FIND FROM THE ABOVE THAT THE ASSESSEE HAS TRANSACTED IN SINGLE SCRIP IN MULTIPLE TIMES DURING THE YEAR BUT SOMETIMES EVEN MORE THAN ONCE IN A DAY ITSELF. FOR EXAMPLE , THE SCRIP ERA C ONSTRUCTION HAS BEEN TRANSACTED ON 19/02/2007, 20/02/2007, 21/02/200 7, 06/09/2006, 11 /09/2006, 09/10/2006. SIMILARLY, THE SCRIP KARUTRI C OMPANY HAS ALSO BEEN TRANSACTED MANY TIMES DURING T HE YEAR. THE QUANTITY OF SCRIP TRANSACTED IN EACH TRANSACTION IS IN THOUSANDS. THE SALE VOLUME TRANSACTED UNDER THE HEAD SHORT - TERM GA IN IS MORE THAN RS. 12 CRORES. THE ASSESSEE HAS SOLD TOTAL SHARES QUANTITY OF RS. 3.51 LACS. 14 ITA NOS. 4411/DEL/2013; 1946/DEL/2012 & 5264/DEL/2012 ALL THESE FIGURES ESTABLISH EXISTENCE OF THE FACTOR OF VOLUME, FREQUENCY AND CONSISTENCY OF TRANSACTIONS. 18. WE FIND THAT WHENEVER ANY SHARES IS PURCHASED WITH T HE INTENTION OF INVESTMENT, IT CANNOT BE SOLD WITHIN A SHORT PERIOD AS THE MARKET FLUCTUATE BECAUSE OF MANY NATIONAL AND INTERNATIONAL EVENTS. IN THE PRESENT CASE , THE FREQUENT PURCHASE AND SALES OF THE SHARES INDICATES THAT THE INTENTION OF THE ASSESSEE W AS TO EARN PROFIT OVER A SHORT PERIOD ON THE MONEY MEANS FOR MANUFACTURING OF POWER EQUIPMENTS, PARKED TEMPORARILY IN THE SHARE MARKET. 19. IN THE CASE OF M/S D & M COMPONENTS LTD. (SUPRA), THE HON BLE C OURT HAS REFERRED TO THE SUPREME COURT DECISION IN THE CASE OF P . MOHAMMED MEERAKHAN VS. COMMISSIONER OF INCOME TAX, KERALA, 73 ITR 735 (SC), WHEREIN IT IS HELD THAT THERE IS NO SINGLE TEST OR FORMULA WHICH COULD BE APPLIED IN DETERMINING WHETHER THE TRANSACTION WAS AN ADVENTURE IN THE NATURE OF TRADE OR N OT AND THE QUESTION DEPENDS IN EACH CASE ON TOTAL IMPRESSION AND EFFECT OF ALL RELEVANT FACTORS AND CIRCUMSTANCES PROVED THEREIN WHICH DETERMINE THE CHARACTER OF THE TRANSACTION. 20. IN THE FACTS OF THE CASE, WE FIND THAT MERE NOT USING INTEREST BEARING B ORROWED FUNDS IS NOT SUFFICIENT TO CONCLUDE THAT TRANSACTION OF SHARE SALES ARE NOT BUSINESS INCOME. HAVING REGARD TO THE VOLUME AND FREQUENCY OF THE TRANSACTIONS, NO SEPARATE BOOKS OF ACCOUNTS OR DEMAT ACCOUNTS AND OTHER FACTS AND CIRCUMSTANCES, WE ARE OF THE OPINION THAT OVERALL EFFECT OF ALL THE FACTORS REVEALED THAT THE ACTIVITY OF SALE AND PURCHASE OF SHARES CLAIMED UNDER THE HEAD SHORT - TERM CAPITAL GAIN CANNOT BE SUSTAINED AND IT IS HELD AS THE ACTIVITY IN THE NATURE OF BUSINESS AND ASSESSABLE UNDER THE HEAD PROFIT AND GAINS OF THE BUSINESS . ACCORDINGLY , WE UPHOLD THE FINDING OF THE LEARNE D COMMISSIONER OF INCOME - T AX(APPEALS) ON THE ISSUE IN DISPUTE AND THE GROUND OF THE APPEAL IS DISMISSED. 21. IN GROUND NO. 3 , THE ASSESSEE HAS RAISED WITHOU T PRE JUDICE TO THE GROUND NO. 2 , THE ISSUE OF NOT ALLOWING CREDIT OF SECURITY TRANSACTION TAX UNDER SECTION 15 ITA NOS. 4411/DEL/2013; 1946/DEL/2012 & 5264/DEL/2012 88E OF THE ACT IN CONSEQUENCE OF TAXING THE SHORT - TERM CAPITAL GAIN UNDER THE HEAD PROFIT AND GAINS OF BUSINESS AND PROFESSION . 22. AS WE HAVE ALREADY UPHELD THE FINDING S OF LEARNED CIT(A) OF TAXING THE TRANSACTIONS CLAIMED UNDER THE HEAD SHORT - TERM CAPITAL GAIN UNDER THE HEAD PROFIT AND GAINS OF BUSINESS AND PROFESSION , THE ASSESSEE DESERVE S FOR CREDIT OF SECURITY TRANSACTION T AX UNDER THE SECTION 88E OF THE ACT. ACCORDINGLY , WE DIRECT THE ASSESSING O FFICER TO ALLOW THAT CREDIT IN ACCORDANCE TO LAW AFTER VERIFICATION OF TH E SECURITY TRANSACTION TAX PAID . THIS GROUND OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ACCORDINGLY , T HE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE S . ITA NO. 4411/DEL/2013 FOR AY: 2007 - 08 2 3 . NOW WE TAKE UP APPEAL IN ITA NO. 4411/DEL/2013, THE SOLE GROUND OF APPEAL RAISED BY THE REVENUE IS IN RESPECT OF DELETION OF PENALTY OF RS. 46 ,57,200/ - UNDER SECTION 271(1)(C) OF THE ACT LEVIED BY THE ASSESSING OFFICER BY LEARNED CIT(A ). 24 . THE FACTS IN BRIEF ARE THAT IN THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT ON 10/12/2009 . T HE ASSESSING OFFICER HELD THE INCOME OF RS. 2,07 ,53, 989/ - SHOWN UNDER THE HEAD SHORT - TERM CAPITAL GAIN AS INCOME UNDER THE HEAD PROFIT AND GAINS OF BUSINESS OR PROFESSION . 25 . I N RESPECT OF THE ABOVE ADDITIONS, THE ASSESSING OFFICER AFTER ALLOWING OPPORTUNITY OF HEARING, LEVI ED PENALTY UNDER SECTION 271(1)(C) OF THE ACT OF RS. 46,57, 200/ - . ON APPEAL, THE CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE DELETING THE PENALTY LEVIED BY THE ASS ESSING OFFICER. AGGRIEVED, THE R EVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 26 . THE LEARNED DR RELYING ON THE ORDE R OF THE ASSESSING OFFICER ARGUED FOR SUSTENANCE OF THE PENALTY LEVIED BY THE ASSESSING OFFICER , ON THE OTHER HAND, THE LEARNED AUTHORIZED R EPRESENTATIVE OF THE ASSESSEE, REL YING ON THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX( APPEALS) SUBMITTED THA T ASSESSEE HAS NOT 16 ITA NOS. 4411/DEL/2013; 1946/DEL/2012 & 5264/DEL/2012 CONCEALED INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME AND THE ADDITIONS HAVE BEEN MADE MERELY ON THE CHANGE OF OPINION. 27 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE LEARNED COMMISSIONER OF INC OME - TAX( APPEALS) HAS ALLOWED THE APPEAL OF THE ASSESSEE WITH FOLLOWING OBSERVATIONS : FINDING GROUND NO. 1 & 4 ARE GENERAL IN NATURE THEREFORE NEEDS NO ADJUDICATION . GROUND NO. 2 TO 3 ARE TOGETHER : I HAVE PERUSED THE FACTS STATED IN THE ASSESSMENT ORDER AS WELL AS THE FACTS STATED BY THE A SSESSEE IN HIS SUBMISSIONS. THERE IS NO CHANGE IN TH E FACTS IN THIS YEAR ALSO, HENCE I AM INCLINED TO FOLLOW MY EARLIER ORDER. THE ASSESSEE COMPANY SUBMITTED W.R.T. THE DETAILS ASKED BY THE ASSESSING OFFICER HAD DISCLOSE D THE DISALLOWANCE TO BE MADE U/S 94(7) OF RS 80,625/ - . THERE IS NO DISPUTE THAT IN THE AUDITED FINANCIAL STATEMENTS AND THE BOOKS OF ACCOUNT PREPARED BY THE APPELLANT COMPANY APPELLANT HAS SHOWN SHORT TERM CAPITAL GAIN ON SHARES AND THE SAME HAS DULY BEEN REFLECTED IN THE RETURN OF INCOME FILED UNDER SECTION 139(1) OF ACT. APPELLANT CRAVE LEAVE TO REFER COMPUTATION OF INCOME AND ACKNOWLEDGMENT OF RETURN OF INCOME FILED, AT THE TIME OF ARGUMENTS. IN THE PROFIT & LOSS ACCOUNT THE APPELLANT HAS CLEARLY SH OWN PROFIT / LOSS ON SALE OF INVESTMENT OF RS. 3,36,63,317/ - WHICH PREDOMINANTLY ESTABLISHES THAT THERE WAS NEITHER ANY CONCEALMENT OF INCOME NOR FURNISHING OF ANY INACCURATE PARTICULARS OF INCOME. THE PENALTY U/S 271(L)(C) IS NOT IMPOSABLE IN THIS CASE AS ASSESSING OFFICER CHANGED THE HEAD OF INCOME WHEREAS ASSESSEE HAD SHOWN IT AS INVESTMENT IN BALANCE SHEET AND DECLARED IN COMPUTATION. THERE IS NO CHANGE IN QUANTUM OF INCOME EVEN IF CONSIDERED BUSINESS INCOME ONLY AN ACCOUNTING TREATMENT. DETAILS ARE GIVEN AT PAGE 3 TO8 OF THIS ORDER. RELIANCE IS PLACED IN THE CASE OF COMMISSIONER OF INCOME - TAX, AHMEDABAD VS RELIANCE PETROPRODUCTS (P.) LTD. [2010] 189 TAXMAN 322 (SC) WHEREIN FOLLOWING OBSERVATIONS HAVE BEEN MADE: PARA 7 - 'IT IS AN ADMITTED POSITION IN THE PRESENT CASE THAT NO INFORMATION GIVEN IN THE RETURN WAS FOUND TO BE INCORRECT OR INACCURATE. IT IS NOT AS IF ANY STATEMENT MADE OR ANY DETAIL SUPPLIED WAS FOUND TO BE FACTUALLY INCORRECT. HENCE, AT LEAST, PRIMA FACIE, THE ASSESSEE CANNOT BE HELD GUIL TY OF FURNISHING INACCURATE PARTICULARS. THE LEARNED COUNSEL ARGUED THAT 'SUBMITTING AN INCORRECT CLAIM IN LAW FOR THE EXPENDITURE ON INTEREST WOULD AMOUNT TO GIVING INACCURATE PARTICULARS OF SUCH INCOME WE DO NOT THINK THAT SUCH CAN BE THE INTERPRETATION OF THE CONCERNED WORDS. THE WORDS ARE PLAIN AND SIMPLE. IN ORDER TO EXPOSE THE ASSESSEE TO THE PENALTY UNLESS THE CASE IS STRICTLY COVERED_ BY THE PROVISION, THE PENALTY PROVISION CANNOT BE INVOKED. BY ANY STRETCH OF IMAGINATION MAKING AN INCORRECT CLAIM I N LAW CANNOT TANTAMO UN T TO FURNISHING INACCURATE PARTICULARS. 2. BSEL INFRASTRUCTURE REALTY LTD VS. ASSISTANT COMMISSIONER OF INCOME TAX ITAT, MUMBAI 'B' BENCH, ITA NO. 6559/MUN/2011; ASSTT YR. 2007 - 08 (2012) 78 DTR (MUMBAI) (TRIB) 147 17 ITA NOS. 4411/DEL/2013; 1946/DEL/2012 & 5264/DEL/2012 ' ... THE ASSESSMENT ORDER IS NOT A FINAL WORD IN THE PENALTY PROCEEDINGS UPON THE PLEAS WHICH CAN BE TAKEN AS THE PENALTY STAGE AND HOWSOEVER RELEVANT AND GOOD THE FINDINGS IN THE ASSESSMENT PROCEEDINGS MAY BE THEY ARE NOT CONCLUSIVE SO FAR AS PENALTY PROCEEDIN GS ARE CONCERNED. THE MATTER HAS TO BE EXAMINED AFRESH AND THE AO CANNOT BE SOLELY GUIDED WITH THE FINDINGS GIVEN ON THE QUANTUM SIDE. THE ASSESSEE EVEN THOUGH DOES NOT GIVE ANY ADDITIONAL EVIDENCE OR PRODUCE ANY NEW MATERIAL, HE STILL MAY RELY UPON THE EX ISTING MATERIAL OR EXPLANATION TO PROVE THAT HE IS NOT GUILTY OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS. THE PRESUMPTION RAISED BY THE EXPLN. 1 IS A REBUTTABLE PRESUMPTION AND IT CAN BE REBUTTED BY GIVING AN EXPLANATION THAT THE ASSESSEE WAS I N A BONA FIDE BELIEF IN OFFERING SUCH INCOME UNDER THE PARTICULAR HEAD. REJECTION OF AN EXPLANATION CANNOT BE CONSIDERED AS RES JUDICATA IN THE WAY OF THE ASSESSEE FOR THE PURPOSE OF PENALTY PROCEEDINGS. THE PRIMARY BURDEN OF THE PROOF EVEN UNDER THE EXPLA NATION IS ON THE REVENUE TO ESTABLISH THAT THE EXPLANATION OF THE ASSESSEE IS FALSE AND MALA FIDE, WHICH HERE IN THIS CASE HAS NOT BEEN DISCHARGED BY THE AO. ONE HAS TO SEE, WHAT WERE THE CIRCUMSTANCES AND THE BELIEF ENTERTAINED BY THE ASSESSEE AT THE T IM E OF FILING THE RETURN, BECAUSE THAT IS THE STARTING POINT FROM WHERE IT CAN BE SEEN WHETHER THE ASSESSEE HAS FURNISHED ANY INACCURATE PARTICULARS OR HAS CONCEALED ANY PARTICULARS OF INCOME. WHEN THE ASSESSEE HAS SHOWN THAT HE WAS NOT DEALING IN THE BUSINE SS OF SALE AND PURCHASE OF SHARES, BUT HAS ONLY ACQUIRED THE SAME FOR THE PURPOSE OF INVESTMENT, HE WAS UNDER A BONA FIDE BELIEF THAT INCOME FROM SALE OF SUCH SHARES WOULD BE TAXABLE UNDER THE HEAD 'CAPITAL GAIN'. THE ASSESSEE WAS CARRYING OUT THE BUSINESS OF INFRASTRUCTURE DEVELOPMENT AND ITS MAIN GROSS TOTAL INCOME WAS FROM SUCH BUSINESS ONLY. THUS THE SALE AND PURCHASE OF SHARES WAS ONLY ANCILLARY AND WAS SHOWN TO HAVE BEEN ACQUIRED ONLY FOR THE PURPOSE OF INVESTMENT. THE PROFIT ON SUCH SALE OF SHARES CA NNOT BE HELD TO BE IN ANY MANNER TREATED AS 'SPECULATION BUSINESS'. THUS THE ASSESSEE CANNOT BE HELD TO BE QUALITY OF FURNISHING OF ANY INACCURATE PARTICULARS OR CONCEALMENT OF PARTICULARS OF INCOME OR THE EXPLANATION FURNISHED BY HIM CAN BE CONSIDERED TO BE FALSE OR MALA FIDE. THUS EVEN ON MERITS, THE ASSESSEE CANNOT BE HELD TO BE QUALITY OF EITHER FURNISHING OF INACCURATE PARTICULARS OF INCOME OR HAS CONCEALED PARTICULARS OF INCOME. ACCORDINGLY, ON MERITS ALSO THE PENALTY IS NOT LEVIABLE IN THE CASE OF TH E ASSESSEE AND HENCE STANDS DELETED - CIT VS RELIANCE PETROPRODUCTS (P) LTD. (2010) 230 CTR (SC) 320: (2010) 36 DTR (SC) 449: (2010 322ITR 158 (SC) APPLIED....' AFTER CONSIDERING THE FACTS OF THE CASE AND THE SUBMISSIONS OF THE APPELLANT, WHICH HAVE SUFFICIENT FORCE, 1 AM INCLINED TO HOLD THAT THE APPELLANT HAS NEITHER CONCEALED INCOME NOR FURNISHED INACCURATE PARTICULARS FOR A.Y.2007 - 08. THE ENTRIES HAVE BEEN PAS SED IN THE BOOKS OF ACCOUNT IN A BONAFIDE MANNER AND AS PER THE GUIDELINES OF THE AUDITORS AND THERE NO CASE FOR PENALTY. FURTHER, RELIANCE IS PLACED ON THE FOLLOWING CASSE CIT VS. AMIT JAIN ( 2013 ) 351 ITR 0074 (DEL): '...IT WAS HELD BY THE HON BLE DELHI HIGH COURT THAT AMOUNT IN QUESTION WHICH FOUND THE BASIS FOR THE A.O. TO LEVY PENALTY WAS IN FACT TRUTHFULLY REPORTED IN THE RETURNS. IN VIEW OF THE CIRCUMSTANCES THAT THE A.O. CHOSE TO TREAT THE INCOME UNDER SOME OTHER HEAD COULD NOT CHARACTERIZED THAT T HE PARTICULARS REPORTED IN THE RETURN WERE INACCURATE PARTICULARS.' KEEPING IN VIEW OF THE ABOVE FACTS AND CASE LAWS CITED ABOVE, THE MINIMUM PENALTY OF RS. 46,57,200/ - IMPOSED BY THE ASSESSING OFFICER IS HEREBY DELETED. IN THE RESULT, THE APPEAL IS ALLOW ED. 18 ITA NOS. 4411/DEL/2013; 1946/DEL/2012 & 5264/DEL/2012 2 8 . I N VIEW OF ABOVE, WE ARE IN AGREEMENT WITH THE SUBMISSION OF THE LEARNED AUTHORIZED REPRESENTATIVE THAT ALL THE FACTUAL INFORMATION IN RESPECT OF TRANSACTION OF PURCHASE AND SALE OF SHARES WAS DULY PROVIDED TO THE AO AND NO PART OF INCOME WAS CON CEALED , NO R FURNISHED ANY INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE. WE FIND THAT IN SA ME SET OF INFORMATION THE INCOME ASSESSED UNDER THE HEAD PROFIT AND GAINS OF BUSINESS OR PROFESSION RATHER THAN UNDER THE HEAD SHORT - TERM CAPITAL GAIN . THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) RELIED ON THE CASE OF COMMISSIONER OF INCOME T AX, AHMEDABAD VS. RELIANCE PETROPRODUCTS PRIVATE L IMITED , (2010) 189 TAXMANN 322 (SC). IN OUR OPINION , THE FINDINGS OF THE LEARNE D COMMISSIONER OF INCOME - TAX( A PPEALS) ON THE ISSUE IN DISPUTE ARE WELL REASONED AND NO INTERFERENCE ON OUR PART IS REQUIRED. ACCORDINGLY, THE GROUND OF THE APPEAL IS DISMISSED. THUS , THE APPEAL FI LED BY THE R EVENUE IS DISMISSED. ITA NO. 5264/DEL/2012 FOR AY: 2006 - 07 29 . NO W , WE TAKE UP THE APPEAL OF THE R EVENUE IN ITA NO. 5264/DEL/2012, WHEREIN, THE GROUND OF APPEAL RAISED IS AS UNDER; 1. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN LAW AND ON FACTS IN DELETING THE PENALTY OF RS. 2,26,29,565/ - IMPOSED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE ACT. 2. THE APPELLANT CRAVES, LEAVE OR RESERVING THE RIGHT TO AMEND MODIFY, ALTER, ADD OR FOREGO ANY GROUND OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 30 . HEARD THE RIVAL SUBMISSIONS ON THE ISSUE. W E FIND FROM THE ORDER OF THE LOWER AUTHORITIES THAT THE ISSUE IN DISPUTE INVOLVED AND THE FACTS AND CIRCUMSTANCES ARE IDENTICAL TO THE ISSUE IN DISPUTE AND THE FACTS AND CIRCUMSTANCES IN ASSESSMENT YEAR 2007 - 08, W HICH HAS BEEN DECIDED BY US IN ITA NO. 4411/DEL/2013, THUS FOLLOWING OUR DECISION IN SAID APPEAL, WE UPHOLD THE FINDING OF THE LEAR NED COMMISSIONER OF INCOME - TAX( APPEALS) IN DELETING THE PENALTY LEVIED BY THE ASSESSING OFFICER UNDER SECT ION 271(1)(C) OF TH E ACT. 19 ITA NOS. 4411/DEL/2013; 1946/DEL/2012 & 5264/DEL/2012 ACCORDINGLY, THE GR OUND OF THE APPEAL IS DISMISSED. THUS, THE APPEAL OF THE REVENUE IS DISMISSED. 31 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO. 1946/DEL/2012 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES AND THE REVENUE S APPEALS IN ITA NO S. 4411/DEL/2013 AND 5264/DEL/2012 ARE DISMISSED. THE DECISION IS PRONOUNCED IN THE OPEN COURT ON 2 7 T H APRIL , 2016 . S D / - S D / - ( I.C. SUDHIR ) ( O.P. KANT ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 7 T H APRIL , 2016 . LAPTOP / - COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI