ITO 17(3)(3), MUMBAI V. PRASHANTI RAVINDRA RAO, MUMBAI

ITA 4850/MUM/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4199 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 22-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHAMMED RIZWAN
• Keywords: Business income; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C, MUMBAI BEFORE SHRI JASON P. BOAZ (AM) AND SHRI SANDEEP GOS AIN (JM) ITA NO. 4850 /MUM/2014 ASSESSMENT YEAR: 2010-11 THE ITO 17(3)(3) , 613, PIRAMAL CHAMBERS, LALBAUG, MUMBAI- 400012. VS. SMT. PRASHANTI RAVINDRA RAO . 20, BIT BUILDING, LAXMINARAYAN LANE, MATUNGA (EAST), MUMBAI- 400019. PAN : AAAPR9787K (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI. MOHAMMED RIZWAN RESPONDENT BY : SHRI. SATISH MODY DATE OF HEARING: 04/02/2016 DATE OF PRONOUNCEMENT: 04/02/2016 O R D E R PER JASON P. BOAZ, AM THE AFORESAID APPEAL HAS BEEN FILED BY THE REV ENUE AGAINST THE IMPUGNED ORDER DATED 30/05/2014 PASSED BY THE CIT( A)-29, MUMBAI FOR THE ASSESSMENT YEAR 2010-11, ON THE FOLLOWING G ROUNDS:- 10) 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING TO TREAT THE SHORT TERM CAPITAL GAIN DECLARED BY THE ASSESSEE AT RS.30,93, 600/- AS SUCH AND NOT AS BUSINESS INCOME. 11) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAD FAILED TO APPRECIATE THE FA CT THAT THE HIGH FREQUENCY OF SUCH TRANSACTIONS AS WELL AS THE LOW HOLDING 2 ITA NO. 4850 /MUM/2014 ASSESSMENT YEAR: 2010-11 PERIOD AS BROUGHT OUT BY THE FACT THAT MORE THAN 51 .3% OF THE TOTAL NUMBER OF SHARES WERE SOLD WITHIN 15 DAYS, AS MUCH AS 24.6% OF THE SHARES WERE SOLD WITHIN A MONTH OF THE PURCHASE AND ANOTHER 15.7% OF THE SHARES WERE SOLD WITHIN 03 MONTHS CLEARLY REFLECT THE PROFIT MOTIVE ASSOCIATED WIT H THESE TRANSACTIONS. 12) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) ERRED IN TREATING BUSINESS INCO ME AS SHORT TERM CAPITAL GAIN WITHOUT APPRECIATING THE FACT THA T THE ASSESSEE HAS ALSO TREATED THE PROFIT/LOSS FROM THE TRANSACTIONS WHERE THE SHARES WERE SOLD THE SAME DAY AS PURCHASE D CLEARLY BRINGS OUT THE HOLLOWNESS IN THE ASSESSEES CONTEN TION THAT THE TRANSACTIONS HAD NO PROFIT MOTIVE. 13) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) ALSO ERRED IN TREATING BUSINESS INCOME AS SHORT TERM CAPITAL GAIN WITHOUT APPRECIATING THE FA CT THAT THE TRANSACTION IN QUESTION ARE NOT ISOLATED ONES. RATH ER THERE IS REGULARITY IN THESE TRANSACTIONS AS THE ASSESSEE HA S BEEN CARRYING ON SUCH TRANSACTIONS DURING EARLIER YEARS AND AN INTENTION TO CONTINUE THESE TRANSACTIONS IN FUTURE IS ALSO DISCERNIBLE. 14. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A ) ON THE ABOVE GROUNDS BE RESERVED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 15. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER AN Y GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 2. AT THE OUTSET, IT IS NOTICED THAT, IN RESPECT OF THE DISPUTED ISSUE THE TAX EFFECT ON THIS AMOUNT IS RS. 8,02,590 /- WHICH IS MUCH BELOW THE SPECIFIED MONETARY LIMIT OF RS. 10 L AKHS. AS PER 3 ITA NO. 4850 /MUM/2014 ASSESSMENT YEAR: 2010-11 THE LATEST CBDT CIRCULAR NO. 21 OF 2015, DATED 10 TH DECEMBER, 2015, NEW GUIDELINES OF MONETARY LIMIT FOR FILING O F APPEALS BY THE DEPARTMENT HAS BEEN ISSUED, WHEREBY THE TAX EFFECT FOR FILING OF APPEAL BEFORE THE ITAT HAS BEEN PRESCRIBED AT RS. 1 0 LAKHS. IN THE SAID CIRCULAR, IT HAS BEEN SPECIFICALLY CLARIFIED T HAT THE SAID INSTRUCTION WILL APPLY RETROSPECTIVELY TO ALL THE P ENDING APPEALS. ACCORDINGLY, THE APPEAL FILED BY THE REVENUE IS NOT MAINTAINABLE AND IS DISMISSED IN LIMINE . ORDER PRONOUNCED IN THE OPEN COURT ON 04 TH FEBRUARY, 2016 SD/- SD/- ( SANDEEP GOSAIN ) (JASON P.BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED: 04/02/2016 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. !' , $ !'% , / DR, ITAT, MUMBAI 6. &' ( / GUARD FILE. / BY ORDER, ) //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI