Appeal Details
Counselvise Citation
[2013] 140 COUNSELVISE.COM (IT) 71418 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
2 year(s) 4 month(s) 3 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
18-10-2013
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
A
Next Hearing Date
20-08-2013
Assessment Year
2008-2009
Appeal Filed On
15-06-2011
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUM BAI , BEFORE SHRI D. MANMOHAN, VP AND SHRI SANJAY ARORA, AM I.T.A. NO.4794/MUM/2011 ( / ASSESSMENT YEAR: 2008-09) ANAND M. FATEHPURIA HUF MOHANLAL JAIN & CO. CHARTERED ACCOUNTANTS 10, CHARTERED HOUSE, GR. FLOOR, DR. C. H. STREET, MARINE LINES, MUMBAI-400 002 VS. ASST. CIT 14(3), 6 TH FLOOR, EARNEST HOUSE, NARIMAN POINT, MUMBAI-400 021 ! ' ./PAN/GIR NO. AACHA 2409 P ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) !#& / APPELLANT BY : SHRI VIJAY C. KOTHARI $%!#'& / RESPONDENT BY : SHRI S. K. MADHUK ( )*'+, / DATE OF HEARING : 20.08.2013 -./'+, / DATE OF PRONOUNCEMENT : 18.10.2013 0 O R D E R PER SANJAY ARORA, A. M.: THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-25, MUMBAI (CIT(A) FOR SH ORT) DATED 31.05.2011, DISMISSING THE ASSESSEES APPEAL CONTESTING ITS ASSESSMENT U/S .143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR (A. Y.) 2008-09 VIDE ORDER DATED 10.12.2010. 2 ITA NO. 4794/MUM/2011 (A.Y. 2008-09) ANAND M. FATEHPURIA HUF VS. ASST. CIT 2.1 OPENING THE ARGUMENTS FOR AND ON BEHALF OF THE ASSESSEE, IT WAS EXPLAINED BY THE LD. AUTHORIZED REPRESENTATIVE (AR), THE ASSESSEES COUNSEL, THAT THE ONLY ISSUE ARISING IN THE INSTANT APPEAL IS THE TREATMENT OF THE SHORT TE RM CAPITAL GAIN (STCG) ARISING TO THE ASSESSEE ON THE SALE OF SHARES BY THE REVENUE AS BU SINESS INCOME. THE ASSESSEE IS AN INVESTOR FOR THE PAST SEVERAL YEARS. THE INCOME UND ER THE HEAD CAPITAL GAINS FOR AY 2007-08 STOOD ASSESSED AS RETURNED, I.E., AS SUCH, AT RS.30.71 LACS VIDE ORDER U/S.143(3) DATED 11.12.2009 (PB PGS. 19-21). THE PROPOSAL FOR A REVISION U/S. 263 OF THE ACT WAS SUBSEQUENTLY MOVED BY THE OFFICE OF THE COMMISSIONE R OF INCOME-TAX14, MUMBAI (CIT FOR SHORT) ON16.12.2010. HOWEVER, ON A DETAI LED REPLY DATED 18.02.011 FILED BY THE ASSESSEE, THE COMPETENT AUTHORITY VIDE HIS COMMUNIC ATION DATED 21/2/2011DROPPED THE SAID PROCEEDINGS ON THE BASIS THAT THE ASSESSING OF FICER (A.O.) HAD CONSIDERED THE MATTER AND TAKEN ONE OF THE VIEWS POSSIBLE AFTER ACTIVE CO NSIDERATION OF THE FACTS, SO THAT NO REVISION IN TERMS OF THE TRITE LAW COULD ARISE, REL YING ON THE DECISION IN THE CASE OF CIT VS. GREENWORLD CORPORATION [2009] 314 ITR 81 (SC) (PB PGS.22-25, 26). EVEN FO R A SUBSEQUENT YEAR, I.E., A.Y. 2010-11, THE ASSESSMENT STANDS FRAMED U/S.143(3) ON 01.03.2012, ASSESSING THE RETURNED INCOME AS SUCH, I.E., AT A LOSS, BOTH BY WAY OF STCG AS WELL AS LONG TERM CAPITAL GAINS (LTCG) (PB PGS.39-4 0). EVEN FOR THE INTERVENING YEARS, I.E., A.YS. 2008-09 AND 2009-10, THE INCOME STOOD A SSESSED AS RETURNED, ALBEIT U/S. 143(1). THE ASSESSEE HAS THUS BEEN ACCEPTED TO BE A N INVESTOR AS PER THE DEPARTMENTS RECORD ITSELF. HOW COULD IT TAKE AN AMBULATORY OR INCONSISTENT STA ND FOR ONE YEAR, I.E., CONTRARY TO THE CONSIDERED VIEW BOTH FOR THE PRECED ING AS WELL AS THE SUBSEQUENT YEARS ? 2.2 THE LD. DEPARTMENTAL REPRESENTATIVE (DR), ON TH E OTHER HAND, WOULD SUBMIT THAT THE SPECULATIVE INCOME EARNED BY THE ASSESSEE, THOU GH RETURNED AND ASSESSED AS BUSINESS INCOME, INVOLVES THE SAME SCRIPS FOR WHICH HE HAS R ETURNED STCG, TAKING US THROUGH THE RELEVANT PART OF THE IMPUGNED ORDER, LISTING 9 SUCH SCRIPS. HOW COULD THIS BE ? THIS IS AS THE CHARACTER OF TRADE IS DETERMINED AND BORNE OUT BY THE INTENT WITH WHICH IT, I.E., THE PURCHASE, IS MADE. THE FUTURE BEING UNCERTAIN, THE SUBSEQUENT CONDUCT MAY NOT A TRUE INDICATOR OF THE INTENT, WHICH MAY WELL BE OR COULD POSSIBLY BE AT VARIANCE THEREWITH. THE 3 ITA NO. 4794/MUM/2011 (A.Y. 2008-09) ANAND M. FATEHPURIA HUF VS. ASST. CIT SALE OF THE SCRIPS IMMEDIATELY UPON PURCHASE, WITHO UT TAKING DELIVERY, I.E., IN INTRA-DAY TRADE, CLEARLY REFLECTS THE INTENT OF THE PURCHASE. THOUGH A PART OF SUCH PURCHASE GETS SOLD SUBSEQUENTLY, I.E., AFTER TAKING DELIVERY, THE SAME WOULD BE TO NO CONSEQUENCE. THAT IS, IT IS NOT POSSIBLE AND WOULD BE INCONSISTENT TO STATE THAT WHILE THE PURCHASES SOLD IMMEDIATELY WAS BY WAY OF A SPECULATIVE TRADE, THAT PART THEREOF, MADE SIMULTANEOUSLY OR ROUND ABOUT, THOUGH SOLD LATER, WAS AN INVESTMENT . SIMILARLY, THERE ARE INSTANCES OF REPETITIVE TRANSACTIONS AS WELL. THE LD. CIT(A) HAS CARRIED OUT A DETAILED ANALYSIS OF THE ASSESSEES TRANSACTIONS (AT PB PGS. 41-43), BUILDIN G UPON THAT BY THE A.O., TO COME TO A CLEAR AND DEFINITE CONCLUSION OF THE SAME REPRESENT ING ONLY TRADING TRANSACTIONS. HE WOULD THEN TAKE US THROUGH THE IMPUGNED ORDER, RECO RDING THE FINDINGS BY THE FIRST APPELLATE AUTHORITY . 2.3 THE LD. AR, IN REJOINDER, AND UPON BEING CONFRO NTED WITH THOSE FINDINGS, WOULD REITERATE THAT THE ASSESSEE HAVING BEEN CONSIDERED AS AN INVESTOR FOR THE PRECEDING AS WELL AS THE SUBSEQUENT YEARS, THE TRANSACTIONS FOR THE C URRENT YEAR COULD NOT BE CONSIDERED AS A BUSINESS ACTIVITY. AS AGAINST 133 TRADES FOR THE CU RRENT YEAR, THE ASSESSEE HAS UNDERTAKEN 115 TRADES DURING THE PREVIOUS YEAR RELEVANT TO A.Y . 2010-11. WITHOUT PREJUDICE, IF THE TRANSACTIONS WERE TO BE CONSIDERED AS BUSINESS TRAN SACTIONS, THE ASSESSEE OUGHT TO BE ALLOWED A DEEMED CONVERSION OF INVESTMENT BROUGHT F ORWARD AS ON 01.04.2007 (AT RS.37.58 LACS / PB PG.45), BESIDES ALSO ALLOWED LOS S ON ACCOUNT OF THE FALL IN THE MARKET PRICE OF THE SHARES HELD AS AT THE YEAR-END (RS.22. 66 LACS) INASMUCH AND TO THE EXTENT THE SAID FALL IN VALUE IS BELOW COST, AND WOULD THUS WA RRANT BEING VALUED AT RS.88.69 LACS AS AGAINST THEIR CARRYING VALUE OF RS.111.31 LACS AS I NVESTMENTS (PB PGS.44). 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. 3.1 THERE IS NO DISPUTE ON THE LAW IN THE MATTER, S O THAT THE ISSUE INVOLVED ESSENTIALLY REVOLVES AROUND THE APPLICATION OF THE LAW IN THE M ATTER, WHICH IS CLEAR, I.E., THE DETERMINATION OF WHETHER THE ACTIVITY UNDER REFERENCE AMOUNTS TO A TRADE OR INVESTMENT ACTIVITY, WHICH IS ESSENTIALLY A QUESTION OF FACT. AS SUCH, THE DETERMINATION OF THE ISSUE AT 4 ITA NO. 4794/MUM/2011 (A.Y. 2008-09) ANAND M. FATEHPURIA HUF VS. ASST. CIT HAND WOULD DEPEND ON THE FINDINGS OF FACT, AND THE DECISIONS BY THE TRIBUNAL RELIED UPON BY THE ASSESSEE BEFORE US, VIZ. NAGINDAS P. SHETH (HUF) (IN ITA NO.961/MUM/2010 & 1836/MUM/2010 DATED 05.04.2011/COPY ON RECORD) AND SHANTILAL M. JAIN VS. ASST. CIT (IN ITA NO.2690/MUM/2010 DATED 27.04.2011/COPY ON R ECORD) WOULD BE, EVEN AS OBSERVED DURING HEARING, OF LITTLE MOMENT. IT WOULD, NEVERTHELESS, BE RELEVANT TO BRIEFLY RECO UNT AND/OR VISIT THE LAW IN THE MATTER, WHICH IS TO SERVE AS A GUIDELINE, HAVING BE EN EXQUISITELY BROUGHT OUT BY THE AUTHORITIES BELOW IN THEIR ORDERS. THE APEX COURT I N CIT VS. SUTLEJ COTTON MILLS SUPPLY AGENCY LTD. [1975] 100 ITR 706 (SC) HELD AS UNDER: IT IS NOT NECESSARY TO CONSTITUTE TRADE THAT THERE SHOULD BE A SERIES OF TRANSACTIONS, BOTH OF PURCHASE AND OF SALE. A SI NGLE TRANSACTION OF PURCHASE AND SALE OUTSIDE THE ASSESSEES LINE OF BU SINESS MAY CONSTITUTE OF ADVENTURE IN THE NATURE OF TRADE. NEI THER REPETITION NOR CONTINUITY OF SIMILAR TRANSACTIONS IS NECESSARY TO CONSTITUTE A TRANSACTION AN ADVENTURE IN THE NATURE OF TRADE. IF THERE IS REPETITION OR CONTINUITY, THE ASSESSEE WOULD BE CARRYING ON A BUSINESS AND THE QUESTION WHETHER THE ACTIVITY IS AN ADVENTURE IN TH E NATURE OF TRADE CAN HARDLY ARISE . A TRANSACTION MAY BE REGARDED AS ISOLATED ALTHOUGH A SIMILAR TRANSACTION MAY HAVE TAKEN PLACE A FAIRLY LONG TIME BEFORE. THE INTENTION TO RESELL WOULD, IN CONJ UNCTION WITH THE CONDUCT OF THE ASSESSEE AND OTHER CIRCUMSTANCES, PO INT TO THE BUSINESS CHARACTER OF THE TRANSACTION . [EMPHASIS, OURS] THE WORD BUSINESS, ALSO DEFINED U/S. 2(13) OF THE ACT, IS OF WIDE IMPORT, AND STANDS JUDICIALLY WELL-SETTLED, TOWARD WHICH WE MAY REFER TO THE CASES IN THE CASE OF LAXMINARAYAN RAMGOPAL VS. GOVT. OF HYDERABAD [1954] 25 ITR 449 (SC); BARENDRA PROSAD RAY VS. ITO [1981] 129 ITR 295 (SC); CIT VS. MOTILAL HIRABHAI SPINNIN & WEAVING CO. LTD . [1978] 113 ITR 373 (GUJ.); AND BHARAT DEVELOPMENT (P.) LTD. VS. CIT [1980] 4 TAXMAN 58 (DEL) RELIED UPON BY THE ASSESSE E. THE HONBLE SUPREME COURT IN SAROJ KUMAR MAZUMDAR VS. CIT [1959] 37 ITR 242 (SC) EXPLAINED THAT A PURCHASE W ITH AN INTENTION TO RESALE IN ORDER TO GAIN PROFIT WILL BE BUSINESS PROFIT DEPENDING ON THE CIRCUMSTANCES OF THE CASE, LIKE NATURE AND QUANTITY OF PURCHASE AND NATURE OF OPERATIONS, ETC. WHAT, THEREFORE, IS TO BE CONSIDERED IS THE TR UE NATURE OF THE TRANSACTION, AND THE 5 ITA NO. 4794/MUM/2011 (A.Y. 2008-09) ANAND M. FATEHPURIA HUF VS. ASST. CIT ENTRIES IN THE ACCOUNTS OR THE TREATMENT BY THE ASS ESSEE IN ITS BOOKS OF ACCOUNTS CANNOT BE REGARDED AS CONCLUSIVE OF THE MATTER (REFER: SUTLEJ COTTON MILLS LTD. VS. CIT [1979] 116 ITR 1 (SC); RAJA BAHADUR VISHESHWARA SINGH VS. CIT [1961] 41 ITR 685 (SC); AND CIT VS. MOTILAL HIRABHAI SPG. & WVG. CO. LTD . [1978] 113 ITR 173 (GUJ.)). FURTHER, AS EXPLAINED IN THE CASE OF JANKI RAM BAHADUR RAM VS. CIT [1965] 57 ITR 21 (SC), NO SINGLE FACT HAS ANY DECISIVE SIGNIFICANCE AND THE Q UESTION WHETHER IT IS A TRADING OR AN INVESTMENT ACTIVITY MUST BE ANSWERED DEPENDING ON C OLLECTIVE EFFECT OF ALL RELEVANT MATERIALS BROUGHT ON RECORD. 3.2 COMING TO THE FACTS OF THE CASE, WE FIRSTLY OBS ERVE THAT THE ASSESSEE HAS DISCLOSED, AND THE REVENUE HAS ACCEPTED, THE INCOME ON SHARES HELD FOR MORE THAN ONE YEAR AS LTCG. THE ASSESSEE HAS, THEREFORE, TO THAT EXTENT B EEN ACCEPTED TO BE AN INVESTOR BY THE REVENUE (PB PG.43). FIRSTLY, THEREFORE, THERE IS NO QUESTION OF ANY DEE MED CONVERSION OF CAPITAL ASSETS HELD AS ON 31.03.2007 AS STOCK-IN-TR ADE FOR THE CURRENT YEAR. THE SAME WOULD, IF SO, OPERATE TO BOTH THE CATEGORIES OF CAP ITAL ASSETS, I.E., LTCA AS WELL AS THE STCA; FOR ALL WE KNOW, A SHORT TERM CAPITAL ASSET ( STCA) AS ON 01.04.2007 MAY STAND TO BE CATEGORIZED AS LONG TERM AS ON 31.03.2008, I.E., WHERE REMAINING UNSOLD BY THAT DATE, WHICH CANNOT BE PRE-DETERMINED ON 01.04.2007 . THE TRANSACTIONS QUA THESE ASSETS ALSO REFLECT AN INVESTMENT BEHAVIOR INASMUCH AS, FIRSTLY , THE SAME EXTENDS TO ABOUT 15 SCRIPS (PB PG.45). THOUGH NONE BUT ONE SURVIVE 31.03.2008 (REFER PARA 13/PG.5 OF THE IMPUGNED ORDER), THE AVERAGE HOLDING PERIOD IS AT A REASONAB LE 123 DAYS, WITH THE SAME INCREASING EVEN FURTHER IF THE WEIGHTED AVERAGE INVESTMENT WAS TO BE TAKEN INTO ACCOUNT. THE GAIN ARISING ON THEIR SALE (RS.3,93,402/-), SUBJECT OF C OURSE TO THE A.O.S VERIFICATION, I.E., QUA FACTS, AS THE DATES AND THE QUANTUM, AS WELL AS THE COMPUTATION ASPECT, IS TO BE CONSIDERED AS STCG. 3.3 WE NOW COME TO THE BALANCE TRANSACTIONS UNDERTA KEN DURING THE YEAR, I.E., QUA THE SHARES PURCHASED DURING THE YEAR, WHICH SPREAD OVER 133 TRADES IN 102 SCRIPS (PB PGS. 41- 42). IN FACT, 110 TO BE PRECISE, I.E., EXCLUDING THE 23 TRADES IN RE SPECT OF SHARES BROUGHT 6 ITA NO. 4794/MUM/2011 (A.Y. 2008-09) ANAND M. FATEHPURIA HUF VS. ASST. CIT FORWARD, WHICH HAVE BEEN CONSIDERED AS CAPITAL ASSE TS. THE NUMBER OF SCRIPS WOULD ALSO LIKEWISE FALL BY 18 TO 84 SCRIPS (PB PG.45). THIS REDUCTION WOULD, HOWEVER, IN OUR VIEW, NOT MATERIALLY DISTURB THE PRINCIPAL FINDING OF THE REVENUE, I.E., OF REGULAR, SYSTEMATIC AND ORGANIZED ACTIVITY OF TRADING, I.E., BUSINESS BY DE FINITION, BEING CARRIED ON BY THE ASSESSEE. ON THE CONTRARY, THIS WOULD SKEW THE RATIOS WORKED OUT BY LD. CIT(A) EVEN FURTHER; AS AFORE-STATED, THE AVERAGE HOLDING PERIOD OF THE BRO UGHT FORWARD SCRIPS, CONSIDERED BY US AS CAPITAL ASSETS, BEING FAIRLY HIGH, I.E., IN EXCE SS OF 125 DAYS. HIS ANALYSIS, BEING BASED ON, AMONG OTHERS, THE TOTAL VOLUME, I.E., INCLUDING THE TRANSACTIONS NOW CONSIDERED BY US AS INVESTMENT TRANSACTIONS, EXCLUDING THE SAME WOUL D THEREFORE FURTHER ACCENTUATE THE RATIO WORKED OUT THUS, PUSHING THEM EVEN HIGHER OR LOWER, AS THE CASE MAY BE. WE ALSO ENDORSE THE VIEW, SOUGHT TO BE PRESSED BY THE A.O. WITH REFERENCE TO THE DECISION IN THE CASE OF ACIT VS. NAGESH (IN ITA NO.5410/M/2008 DATED 24.09.2009), THAT IT I S THE INTENTION, AS MANIFEST, WHICH IS DECISIVE OF THE MA TTER. A PERSON MAY KEEP VIGIL OF THE MARKET. THE SAME MAY NOT RESULT IN ANY TRADE BY THE END OF THE DAY, YET HAS OCCUPIED HIS TIME AND ATTENTION. THIS IS DUE TO THE VERY NATURE OF THE TRADE. RATHER, IT IS ON ACCOUNT OF THESE FACTORS THAT THE TRIBUNAL HAS, IN CASES AS HARSHA N. MEHTA VS. DY. CIT (IN ITA NO.1859/M/2009 DATED 16.07.2010); IMMORTAL FINANCIAL SERVICES PVT. LTD. (IN ITA NO. 4094/MUM/2010 DATED 20.10.2010; AND SADHANA NABERA VS. CIT (IN ITA NO. 2586/MUM/2009 DATED 26.03.2010), HELD THE TRANSACTI ONS TO CONSTITUTE BUSINESS EVEN WHERE THE SAME EXTENDED TO A MUCH LOWER NUMBER OF T RADES AS OBTAINING IN THE INSTANT CASE. 3.4 WE CAPSULE THE SPECIFIC FINDINGS BY THE LD. CIT (A), NONE OF WHICH ARE CONTROVERTED, BEING IN FACT BASED ON THE DATA PROVI DED BY THE ASSESSEE ITSELF (REFER PARA 4, PAGES 4 THROUGH 7, OF THE IMPUGNED ORDER): A) THE ASSESSEE HAS TRADED IN A LARGE NUMBER OF COMPAN IES (SUPRA) AND FOR 129 DAYS DURING THE YEAR DURING WHICH THE STOCK EXCHANGE IS OPEN - FOR PRACTICALLY 250 DAYS, OVER A LARGE NUMBER OF SCRIPS; 7 ITA NO. 4794/MUM/2011 (A.Y. 2008-09) ANAND M. FATEHPURIA HUF VS. ASST. CIT B) THERE IS ADMITTEDLY SPECULATIVE TRADE IN 9 SCRIPS, OF WHICH 8 ARE COMMON, I.E., FOR WHICH THE ASSESSEE HAS CLAIMED STCG; C) 60 OF THE TOTAL (110) TRADES HAVE A HOLDING PERIOD OF LESS THAN 60 DAYS, WITH 36 (ABOUT 1/3 RD ) OF THEM BEING BETWEEN 2-15 DAYS; D) REPETITIVE TRANSACTION OF PURCHASE AND SALE WERE AL SO OBSERVED IN SOME SCRIPS, VIZ. GENUS OVERSEAS; INDERGIRI FINANCE; LOKESH MACHINE; MCPALLY BHARAT; WIRE & WIRE INDUSTRIES, ETC.; E) ALL TRANSACTIONS ACQUIRED THROUGH THE IPO ROUTE (8) , STOOD SOLD DURING THE YEAR; F) ALL THE SHARES, SAVE ONE (1700 SHARES IN INDIA CEME NTS LTD.), HELD AS STOCK AS AT THE YEAR-END, HAVE BEEN PURCHASED DURING THE CURRENT YE AR, AND; G) THE INTEREST ON BORROWED CAPITAL (RS.91,221/-) CLAI MED AGAINST BILL DISCOUNTING INCOME, WHILE THE BALANCE-SHEET WOULD SHOW THAT THE SAME IS AGAINST, AT LEAST SUBSTANTIALLY, AGAINST PURCHASE OF SHARES. HE, ACCORDINGLY, HELD THE TRANSACTIONS TO CONSTITUT E BUSINESS ACTIVITY. CONSEQUENTLY, THE DIVIDEND INCOME EARNED (RS.79,999/-), WHICH IS MEAG ER IN RELATION TO THE SHARE TRADING INCOME (RS.34.93 LACS), WAS ALSO REQUIRED TO BE EXA MINED FROM THE STAND POINT OF APPLICATION OF SECTION 94(7); THERE BEING LOSS MAKI NG TRANSACTIONS AS WELL. IT MAY ALSO BE EMPHASIZED, BEING, AGAIN, A PRIMARY FACT, THAT THE ASSESSEE IS MAINTAINING THE SAME SET OF BOOKS OF ACCOUNTS FOR B OTH ITS ADMITTEDLY BUSINESS TRANSACTIONS (SPECULATIVE SHARE TRADING, BILL DISCO UNTING) AND THE PURPORTED INVESTMENT ACTIVITY, OUT OF THE SAME COMMON POOL OF FUNDS. THE DISTINCTION DRAWN BETWEEN THE INVESTMENT AND BUSINESS (TRADING) ACTIVITY BY THE A SSESSEE IS HYPOTHETICAL, AND ITS RECORDS ARE INCAPABLE OF LEADING TO THE SAID DISTINCTION, T HE ONUS FOR WHICH IS ONLY ON IT (REFER: CIT VS. ASSOCIATED INDUSTRIAL DEVELOPMENT CO. (P.) LTD . [1971] 82 ITR 586 (SC)). ALL ITS TRANSACTIONS ARE IMBUED WITH SAME PROFIT MOTIVE, WH ICH CONTINUED NOT ONLY THROUGHOUT THE YEAR, BUT ALSO FROM YEAR TO YEAR. DECISION 4. IN VIEW OF THE FOREGOING, UNCONTROVERTED FINDING S, WE HAVE NO HESITATION IN AFFIRMING THE FINDINGS BY THE FIRST APPELLATE AUTHO RITY INASMUCH AS THESE ARE FINDINGS OF 8 ITA NO. 4794/MUM/2011 (A.Y. 2008-09) ANAND M. FATEHPURIA HUF VS. ASST. CIT FACT, WHEREIN NO INFIRMITY HAS BEEN POINTED OUT NOR HAVE WE OBSERVED ANY AND, FURTHER, GIVEN THE LAW IN THE MATTER AS DELINEATED ABOVE. IN ADDITION, IN VIEW OF THE FINDINGS AFORE- SAID, WE DIRECT THE FOLLOWING MODIFICATION/S IN CON SONANCE THEREWITH: (A) THE COMPUTATION OF BUSINESS INCOME IS, UNDER THE CI RCUMSTANCES, TO BE RESTRICTED TO THE SHARES/UNITS OTHER THAN THOSE SHARES CARRIED OV ER AS CAPITAL ASSETS AS ON 01.04.2007. OF ALL THE SHARES AS ON 31.03.2008, ONL Y SHARES IN INDIA CEMENT LTD. WOULD CONTINUE TO BE CLASSIFIED AS AN INVESTMENT, A ND CARRIED OVER AT COST. THE BALANCE WOULD BE VALUED AT COST OR MARKET VALUE, WH ICHEVER IS LESS, RECKONED INDIVIDUALLY AND NOT IN AGGREGATE, AS DONE BY THE A SSESSEE (REFER PB PG.44 ). THE BUSINESS INCOME IS TO BE COMPUTED ACCORDINGLY. FURT HER, THE SAME VALUE (OF THE CLOSING STOCK) IS TO BE TAKEN INTO ACCOUNT IN COMPU TING THE INCOME FOR THE SUBSEQUENT YEARS, I.E., AS AND WHEN ACTUALLY THE SA ID SHARES ARE ACTUALLY SOLD; (B) THE ASSESSEE SHALL BE ENTITLED TO CLAIM THE BENEFIT OF SECURITY TRANSACTION TAX (STT) TO THE EXTENT IT RELATES TO BUSINESS INCOME, THOUGH THE ONUS TO ESTABLISH ITS CLAIM WOULD ONLY BE ON THE ASSESSEE; AND (C) THE D-MAT CHARGES, TO THE EXTENT THE SAME RELATE TO SHARES CONFIRMED AS CAPITAL ASSET (LONG TERM OR SHORT TERM) WOULD HAVE TO BE AD JUSTED AGAINST THE COST THEREOF. WE DECIDE ACCORDINGLY. 5. IN THE RESULT, THE ASSESSEE APPEAL IS PARTLY ALL OWED. 1/+23451+' 60) 7 +'+8 ORDER PRONOUNCED IN THE OPEN COURT ON OCTOBER 18, 2 013 SD/- SD/- (D. MANMOHAN) (SANJAY ARORA) / VICE PRESIDENT / ACCOUNTANT MEMBER ( 9* MUMBAI; : DATED : 18.10.2013 )3 ROSHANI , SR. PS 9 ITA NO. 4794/MUM/2011 (A.Y. 2008-09) ANAND M. FATEHPURIA HUF VS. ASST. CIT ! ' #$%& ' &$ COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. ( ;+ < = / THE CIT(A) 4. ( ;+ / CIT CONCERNED 5. >)?@$3+3A4 ,A4/ ( 9* / DR, ITAT, MUMBAI 6. @5B* GUARD FILE ! ( / BY ORDER, )/(* + (DY./ASSTT. REGISTRAR) , ( 9* / ITAT, MUMBAI
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