ACIT 19(3), MUMBAI V. KANTI VANECHAND SHAH (HUF), MUMBAI

ITA 4858/MUM/2010

• Counselvise Citation: 485819914 RSA 2010
• Duration Of Justice: 1 year(s) 6 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 22-11-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 11-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K B MENON
• Keywords: Capital asset; Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: MUMBAI BEFORE SHRI G.E. VEERABHADRAPPA, PRESIDENT AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.4858/MUM/2010 (ASSESSMENT YEAR: 2006-07) ACIT- CIRCLE-19(3), ROOM NO.305, 3 RD FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI -400 012 ....... APPELLANT VS MR. KANTI VENECHAND SHAH (HUF), TEJAL, 35, PALLI HILL, BANDRA (W), MUMBAI -400 050 PAN: AAAHK 0748 K ..... RESPONDENT ITA NO.4859/MUM/2010 (ASSESSMENT YEAR:2006-07) ACIT- CIRCLE-19(3), ROOM NO.305, 3 RD FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI -400 012 ....... APPELLANT VS MR KANTI VANECHAND SHAH, TEJAL, 35, PALLI HILL, BANDRA (W), MUMBAI -400 050 PAN: AADPS 4111 P ..... RESPONDENT APPELLANT BY: SHRI P.K.B. MENON RESPONDENT BY: SHRI PRAMOD KUMAR PARIDA/ MS. SANJUKTA CHOWDHURY DATE OF HEARING: 30.11.2011 DATE OF PRONOUNCEMENT: 28.12.2011 O R D E R PER R.S. PADVEKAR, JM ITA 4858 & 4859/M/2010 MR. KANTI VENECHAND SHAH (HUF) & MR. KANTI VENECHAND SHAH 2 THESE TWO APPEALS FILED BY THE TWO DIFFERENT INDIVI DUAL ASSESSEES FOR THE A.Y. 2006-07. THE COMMON SOLITARY ISSUE IN BOTH THE APPEALS IS THE SHARE TRANSACTION UNDERTOOK BY BOTH THESE AS SESSES WHETHER ARE IN THE NATURE OF THE INVESTMENT OR THE BUSINESS. 2. FIRST WE TAKE THE APPEAL OF MR. KANTI VENECHAND SHAH (HUF) (ITA NO.4858/M/2010) FOR DISPOSAL. AS COMMON GROUND S ARE TAKEN IN BOTH THE APPEALS, HENCE WE REPRODUCE GROUNDS TAKEN IN THIS APPEAL WHICH READ AS UNDER: (1) ON THE FACT AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT (A) HAS ERRED IN DIRECTING THE AO TO TA X INCOME FROM UNDER THE HEAD SHORT TERM CAPITAL GAIN AND LO NG TERM CAPITAL GAIN WHICH WAS ASSESSED BY THE AO AS INCOME UNDER THE HEAD BUSINESS OR PROFESSION, IGN ORING THE FACT THAT THE ASSESSEE HAS RECEIVED ABOUT 99% O F INCOME FROM SHARES AND ONLY 1% FROM OTHERS. (2) ON THE FACT AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT (A) HAS FAILED TO APPRECIATE THE IN DEP TH ANALYSIS MADE BY THE A.O BEFORE TREATING THE GAINS AS BUSINESS INCOME AND THAT CIRCULAR NO. 4 OF 2007 HAS BE TAKEN INTO CONSIDERATION TO DECIDE WHETHER THE GAIN S ARE TO BE TREATED AS SUCH OR AS BUSINESS. (3) ON THE FACT AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT (A) HAS ERRED IN IGNORING THE FACT THAT THE ASSESSEE HAS ENTERED INTO 55,000 ODD TRANSACTIONS O F PURCHASE AND SALE OF SHARES DURING THE CURRENT YEAR . (4) ON THE FACT AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT (A) HAS ALSO ERRED IN TREATING BUSINESS INCOME AS LONG TERM CAPITAL GAIN WITHOUT APPRECIATING THE FACT THAT THE SHARES ARE HELD BY THE ASSESSEE AS HIS STO CK IN TRADE RATHER THAN AS INVESTMENT. ITA 4858 & 4859/M/2010 MR. KANTI VENECHAND SHAH (HUF) & MR. KANTI VENECHAND SHAH 3 (5) ON THE FACT AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT (A) HAS ERRED IN HOLDING THAT THE ASSES SEES USE OF OWN FUNDS FOR PURCHASE OF SHARES WOULD IMPLY THA T THE SHARES ARE PROCURED FOR THE PURPOSE OF INVESTMENT, THEREBY IGNORING THE FACT THAT THE ASSESSEE BEING A HIGH NE T WORTH INDIVIDUAL MAY NOT REQUIRE LOAN FUNDS. (6) ON THE FACT AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) HAS ERRED IN TREATING BUSINESS INCOM E AS SHORT TERM CAPITAL GAIN WITHOUT APPRECIATING THE FA CT THAT THE ASSESSEES INTENTION / MOTIVE WHILE INVESTING I S NOT APPRECIATION OF INVESTMENT BUT MAXIMIZE THE PROFIT. (7) THE APPELLANT PRAYS THAT THE ORDER OF THE CIT (A) ON THE ABOVE GROUND BE SET SIDE AND THAT OF THE AO BE REST ORED. (8) THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER A NY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 3. BRIEFLY STATED THE FACTS ARE AS UNDER. THE CORE CONTROVERSY IS IN RESPECT OF TREATING THE SHORT TERM CAPITAL GAIN DEC LARED BY THE ASSESSEE AS AN INCOME FROM BUSINESS. THE ASSESSEE HAS DECLA RED THE LONG TERM CAPITAL GAIN AT ` 69,21,591/- AND SHORT TERM CAPITAL GAIN OF ` 41,05,178/-. THE ASSESSEE HUF HAS ENTERED INTO SHA RE TRANSACTIONS. THE A.O. HAS NOTED THAT IN RESPECT OF THE SHORT TER M CAPITAL GAIN AS DECLARED BY THE ASSESSEE OF ` 41,05,178/,- THE ASSESSEE ENTERED INTO 55615 TRANSACTIONS IN THE SHARES WHICH INVOLVE THE TURNOVER OF ` 1,36,07,288/-. IN THE OPINION OF THE A.O. CONSIDER ING THE VOLUME OF TRANSACTIONS, THE PERIOD OF HOLDING AND THE REGULAR ITY OF PURCHASE AND SALE OF SHARES INVOLVED THE GAIN/PROFIT ON THE SALE TRANSACTIONS HAS TO BE TREATED AS A BUSINESS INCOME. THE A.O. SOUGHT THE EXPLANATION OF THE ASSESSEE. THE ASSESSEE STATED THAT THE MOTIVE FOR PURCHASE OF SHARES IS TO REALISE THE APPRECIATION IN MARKET VAL UE OF SHARES AND NOT TO MAKE A QUICK PROFIT. IT WAS FURTHER STATED THAT THERE WAS NO DAY- TODAY TRANSACTION WITHOUT DELIVERY AND THE SOURCE O F ACQUISITION OF THE ITA 4858 & 4859/M/2010 MR. KANTI VENECHAND SHAH (HUF) & MR. KANTI VENECHAND SHAH 4 SHARES IS FROM THE OWN FUNDS. SHARES WERE HELD AS AN INVESTMENT AND ACCORDINGLY REFLECTED IN THE BALANCE-SHEET ALSO. T HE ASSESSEE HAD NEVER ANY INTENTION OF DOING ANY BUSINESS BUT THE S HARES WERE HELD AS AN INVESTMENT. THE A.O. WAS NOT IMPRESSED WITH T HE EXPLANATION OF THE ASSESSEE. HE REJECTED THE CONTENTION OF THE AS SESSEE THAT THE ASSESSEE IS AN INVESTOR AND HE IS NOT ENGAGED INTO BUSINESS OF SHARE TRANSACTIONS BY GIVING FOLLOWING SUMMARISED REASONS :- (I) THE TRANSACTION ARE CARRIED OUT REGULARLY; (II) QUANTITIES OF PURCHASES / SALES ARE GENERALLY LARGE; (III) THE ASSESSEE HAS EXCESS TO INFORMATION AND NECESSAR Y QUALIFICATION AND GUIDANCE TO CARRY OUT THE BUSINES S; (IV) THE ASSESSEE HAS SOLD SHARES EVEN FOR LOSS WHEREAS A PRUDENT INVESTOR NORMALLY DO NOT SALE SHARES ON LOS S; (V) THE ASSESSEE HAS DEVOTED FULL TIME FOR CARRYING ON SHARE TRADING BUSINESS AND ONLY TO TAKE THE BENEFIT OF TH E RATE OF TAX THE ASSESSEE HAS MADE PLANNING. 4. THE A.O. REFERRED TO CBDTS INSTRUCTION NO. 1827 DATED 31.7.1989 IN WHICH SOME GUIDELINES GIVEN FOR DETERM INING, WHETHER A PARTICULAR ASSESSEE IS A TRADER IN SHARES OR SHARES ARE HELD AS A CAPITAL ASSET OR INVESTMENT. THE A.O. HAS REPRODUCE D THE ENTIRE CIRCULAR NUMBER IN THE ASSESSMENT ORDER ON PAGE NO. 5 TO 8. THE A.O. ALSO REFERRED TO THE ANOTHER CIRCULAR ISSUED BY THE CBDT CIRCULAR NO.4/2007 DATED 15.06.2007 WHICH IS ALSO REPRODUCED IN FULL IN THE ASSESSMENT ORDER FROM PAGE NO.9 TO 11. THE A.O. WA S MUCH INFLUENCED AFTER CONSIDERING THE VOLUME OF TRANSACT IONS, SHORT PERIOD OF THE HOLDING AND AS PER THE GUIDELINES ISSUED BY THE CBDT, CAME TO THE CONCLUSION THAT THE ASSESSEE IS ENGAGED INTO TH E TRADING OF THE SHARES AND HE IS NOT AN INVESTOR. THE A.O. ALSO DI SCUSSED FEW DECISIONS ON THE ISSUE IN THE ASSESSMENT ORDER AND FINALLY CONCLUDED THAT SO FAR AS SHORT TERM CAPITAL GAIN DECLARED BY THE ASSESSEE IS CONCERNED, THE SAME IS TO BE TREATED AS INCOME FROM BUSINESS OF SHARES. IT IS PERTINENT TO NOTE HERE THAT THE A.O. ACCEPTED THE LONG TERM CAPITAL GAIN OF ` 69,21,591/- WHICH WAS CLAIMED AS EXEMPT U/S.10(30) OF THE ACT. THE ASSESSEE CHALLENGED THE ACTION OF THE A.O. ITA 4858 & 4859/M/2010 MR. KANTI VENECHAND SHAH (HUF) & MR. KANTI VENECHAND SHAH 5 BEFORE THE LD. CIT (A) AND LD. CIT (A) ACCEPTED THE CLAIM OF THE ASSESSEE THAT THE ASSESSEE IS AN INVESTOR AND SHORT TERM CAPITAL GAIN DECLARED BY THE ASSESSEE CANNOT BE TREATED AS BUSIN ESS INCOME. LD. CIT (A) DIRECTED THE A.O. TO ACCEPT THE ASSESSEES C LAIM OF THE SHORT TERM CAPITAL GAIN ON THE SHARES TRANSACTIONS WHERE THE DELIVERY HAS BEEN TAKEN AND SECURITY TRANSACTION TAX (STT) HAS B EEN PAID. ANY TRANSACTION WHICH IS OF SPECULATIVE NATURE, IS DIRE CTED TO BE TREATED AS FORMING PART OF SPECULATION BUSINESS. THE OPERATIV E PART OF THE FINDINGS OF THE LD. CIT (A) ARE AS UNDER:- 3.3 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MA DE BY THE AUTHORIZED REPRESENTATIVE, HAVE PERUSED THE ASSESSM ENT ORDER AND AFTER GOING THROUGH THE RELEVANT CASES LA WS REFERRED TO BOTH THE ASSESSING OFFICER AS WELL AUTH ORIZED REPRESENTATIVE FIND THAT APPELLANTS CASE STANDS SQ UARELY COVERED BY THE RATIO LAID DOWN IN THE CASE OF GOPAL PUROHIT OF THE ITAT G BENCH MUMBAI WHICH ORDER HAS SINCE BEEN APPROVED BY HONBLE BOMBAY HIGH COURT. EVEN ON FAC TS AND LAW I FIND THAT THOUGH IN APPELLANTS CASE THE VOLUME OF TRANSACTION IS QUITE SUBSTANTIAL BUT AS HELD BY JUD ICIAL AUTHORITIES ON THE BASIS OF THIS ALONE, APPELLANT C AN NOT BE HELD TO BE TRADER WHEN ALL OTHER FACTORS, SUCH AS M AKING INVESTMENT OUT OF OWN FUNDS WITHOUT UTILIZING ANY B ORROWED FUNDS FOR INVESTMENT IN SHARES, NOT INCLUDING IN DA Y TRADING, REFLECTING THE AMOUNT OF INVESTMENT IN SHA RES IN THE BALANCE SHEET AT COST AND DIVIDEND EARNINGS. EVEN THE CHART FURNISHED BY THE AR OF THE APPELLANT INCORPOR ATED HEREINABOVE IN RESPECT OF CAPITAL GAIN EARNED BY TH E APPELLANT INDICATE ONLY STRAY INCIDENCE WHERE SHARE S HAVE BEEN HELD FOR LESS THAN 30 DAYS. THEREFORE, THE AP PELLANT CANNOT BE HELD TO BE A TRADER IN SHARES WITH RESPEC T TO DELIVERY BASED TRANSACTIONS. THE ASSESSING OFFICER IS ACCORDINGLY DIRECTED TO ACCEPT APPELLANTS CLAIM OF SHORT TERM CAPITAL GAIN ON SHARE TRANSACTIONS WHERE THE DELIVERY HAS BEEN TAKEN OR GIVEN AND SECURITY TRANS ACTIONS ITA 4858 & 4859/M/2010 MR. KANTI VENECHAND SHAH (HUF) & MR. KANTI VENECHAND SHAH 6 WHERE THE DELIVERY HAS BEEN TAKEN OR AND SECURITY TRANSACTION TAX HAS BEEN PAID. CONCESSIONAL RATE @ 10% U/S.111A OF THE ACT WILL BE APPLICABLE ON STCG. TH E OTHER TRANSACTIONS INVOLVING NON-DELIVERY SPECULATIVE TRANSACTIONS, IF ANY, WILL BE TREATED AS FORMING PA RT OF SPECULATION BUSINESS AND WILL BE TAXED AS SUCH. TH E AO IS DIRECTED TO VERIFY AND QUANTIFY THE PROFIT / LOSS I N NON- DELIVERY BASED TRANSACTION, IF ANY, AND CHARGE IT T O TAX ACCORDINGLY. THE APPELLANT SUCCEEDS ON THESE GROUN DS. THIS GROUND OF APPEAL IS ALLOWED. 5. NOW, THE REVENUE IS IN APPEAL BEFORE US. 6. NOW, WE TAKE-UP ANOTHER APPEAL, IN ITA NO.4859/M /2008 WITH REGARDS TO MR. KANTI VENECHAND SHAH. IN THIS APPEAL , THE GROUNDS ARE VERBATIM WITH GROUNDS IN ANOTHER ASSESSEES CASE. 7. IN THIS CASE, THE ASSESSEE IS AN INDIVIDUAL WHO IS AN ARCHITECT AND STRUCTURAL CONSULTANT BY PROFESSION. THE ASSES SEE HAS ENGAGED INTO THE SHARE TRANSACTIONS AND DECLARED LONG TERM CAPITAL GAIN (LTCG) OF ` 58,06,890/- WHICH WAS CLAIMED AS EXEMPT U/S.10(38) OF THE ACT. THE ASSESSEE ALSO DECLARED SHORT TERM CAPITAL GAIN (STCC) OF ` 46,08,032/-. THE A.O. HAD A RESERVATION ACCEPTING THE CLAIM OF THE ASSESSEE IN RESPECT OF THE SHORT TERM CAPITAL GAIN (STCC) AS IN THE OPINION OF THE A.O. TO THE EXTENT OF SHORT TERM CAP ITAL GAIN THE ASSESSEE WAS ENGAGED INTO THE BUSINESS / TRADING IN THE SHARES AND TO THAT EXTENT THE SHORT TERM CAPITAL GAIN DECLARED BY THE ASSESSEE IS IN THE NATURE OF THE BUSINESS INCOME. SAVE CHANGE IN T HE FIGURES, THE OBSERVATIONS, REASONS AND FINDINGS OF THE A.O. ARE VERBATIM AS IN ANOTHER CASE I.E. MR. KANTI VENECHAND SHAH (HUF), FOR TREATING THE SHORT TERM CAPITAL GAIN AS ASSESSEES BUSINESS INCO ME. 8. WE HAVE ALREADY NARRATED THE RELEVANT FACTS IN T HE SAID CASE HEREINABOVE. IN THIS CASE THE A.O. ACCEPTED THE CL AIM OF THE ASSESSEE IN RESPECT OF LONG TERM CAPITAL GAIN (LTCG) AND ALS O ALLOWED THE CLAIM ITA 4858 & 4859/M/2010 MR. KANTI VENECHAND SHAH (HUF) & MR. KANTI VENECHAND SHAH 7 OF EXEMPTION U/S.10(38) OF THE ACT. THIS ISSUE IS ALSO CARRIED BEFORE THE LD. CIT (A) AND LD. CIT (A) HELD AS UNDER:- 3.3 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MA DE BY THE AUTHORIZED REPRESENTATIVE, HAVE PERUSED THE ASSESSM ENT ORDER AND AFTER GOING THROUGH THE RELEVANT CASE LAWS REFE RRED TO BOTH BY THE ASSESSING OFFICER AS WELL AUTHORIZED REPRESENTA TIVE FIND THAT APPELLANTS CASE STANDS SQUARELY COVERED BY THE RAT IO LAID DOWN IN THE CASE OF GOPAL PUROHIT OF THE ITAT G BENCH MUMBAI WHICH ORDER HAS SINCE BEEN APPROVED BY HONBLE BOMBAY HIG H COURT. EVEN ON FACTS AND LAW I FIND THAT THOUGH IN APPELLA NTS CASE THE VOLUME OF TRANSACTION IS QUITE SUBSTANTIAL BUT AS H ELD BY JUDICIAL AUTHORITIES ON THE BASIS OF THIS ALONE, APPELLANT C AN NOT BE HELD TO BE A TRADER WHEN ALL OTHER FACTORS, SUCH AS MAKING INVESTMENT OUT OF OWN FUNDS WITHOUT UTILIZING ANY BORROWED FUNDS F OR INVESTMENT IN SHARES, NOT INDULGING IN DAY TRADING, REFLECTING THE AMOUNT OF INVESTMENT IN SHARES IN THE BALANCE SHEET AT COST A ND DIVIDEND EARNINGS. EVEN THE CHART FURNISHED BY THE AR OF THE APPELLANT INCORPORATED HEREINABOVE IN RESPECT OF CAPITAL GAIN EARNED BY THE APPELLANT INDICATE ONLY STRAY INCIDENCE WHERE SHARE S HAVE BEEN HELD FOR LESS THAN 30 DAYS. THEREFORE, THE APPELLAN T CANNOT BE HELD TO BE A TRADER IN SHARES WITH RESPECT TO DELIV ERY BASED TRANSACTIONS. THE ASSESSING OFFICER IS ACCORDINGLY DIRECTED TO ACCEPT APPELLANTS CLAIM OF SHORT TERM CAPITAL GAIN ON SHARE TRANSACTIONS WHERE THE DELIVERY HAS BEEN TAKEN OR G IVEN AND SECURITY TRANSACTION TAX HAS BEEN PAID. CONCESSIONA L RATE 10% U/S.111A OF THE ACT WILL BE APPLICABLE ON STCG. THE OTHER TRANSACTIONS INVOLVING NON-DELIVERY SPECULATIVE TRA NSACTIONS, IF ANY, WILL BE TREATED AS FORMING PART OF SPECULATION BUSINESS AND WILL BE TAXED AS SUCH. THE AO S DIRECTED TO VERIFY AND QUANTIFY THE PROFIT/LOSS IN NON-DELIVERY BASED TRANSACTION, IF ANY AND CHARGE IT TO TAX ACCORDINGLY. THE APPELLANT SUCCEED S ON THESE GROUNDS. THIS GROUND OF APPEAL IS ALLOWED. NOW, IN BOTH THE CASES THE ASSESSEE IS IN APPEAL BEFORE US. ITA 4858 & 4859/M/2010 MR. KANTI VENECHAND SHAH (HUF) & MR. KANTI VENECHAND SHAH 8 9. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTI ES AND ALSO PERUSED THE RECORDS. AS STATED EARLIER, THE GROUND S AS WELL AS THE FINDINGS OF THE LD. CIT (A) ARE VERBATIM SAVE FIGUR ES. MOREOVER, THE FACTS ARE ALSO IDENTICAL. THE SHORT ISSUE IN CONTR OVERSY IS IN RESPECT OF THE TREATMENT OF THE SHORT TERM CAPITAL GAIN DECLAR ED BY THE ASSESSEE IN RESPECT OF THE SHARE TRANSACTIONS. BOTH THE ASS ESSEES ARE NOT IN TRADING OR BUSINESS OF THE SHARES AS A BROKER OR SU B-BROKER. THE A.O. HAS ONLY CONSIDERED VOLUME OF THE TRANSACTIONS FOR ARRIVING AT CONCLUSION THAT BOTH THE ASSESSEES ARE ENGAGED IN THE TRADING OF THE SHARES. IT IS PERTINENT TO NOTE HERE THAT SO FAR A S THE DECLARATION OF THE LONG TERM CAPITAL GAIN ON THE SHARE TRANSACTION IS CONCERNED IN RESPECT OF BOTH THESE ASSESSES, THE A.O. HAS ACCEPTED THE S AME AND ALSO ALLOWED THE EXEMPTION. THERE IS NO DISPUTE IN BOTH THE CASES THAT THE ASSESSEES ARE SHOWING THE SHARES AS AN INVESTMENT I N THE BALANCE- SHEET AND SAME TREATMENT IS GIVEN IN PAST MANY YEAR S. THE LD. COUNSEL HAS PLACED HIS RELIANCE ON THE PLETHORA OF DECISIONS OF OTHER CO-ORDINATE BENCHES OF THE TRIBUNAL. IT IS VERY DI FFICULT TASK FOR JUDICIAL ADJUDICATION WHEN THE PART OF THE SHARE TR ANSACTIONS ARE TREATED OUT OF THE INVESTMENT AND PART OF THE SHARE TRANSACTIONS ARE TREATED TOWARD THE BUSINESS OR TRADING IN SHARES. THOUGH THERE IS NO STRAIGHT JACKET FORMULA TO ARRIVE AT A CONCLUSION F OR DETERMINING WHETHER THE ASSESSEE IS AN INVESTOR OR IN THE BUSIN ESS OF SHARES BUT THERE ARE SOME GUIDING LAID DOWN IN THE DIFFERENT J UDICIAL PRONOUNCEMENTS. ONE OF THE FACTORS TO BE CONSIDERE D IS THE INTENTION OF THE ASSESSEE AT THE TIME OF PURCHASING THE SHARE S WHETHER TO EARN THE PROFIT OR TO GET THE APPRECIATION IN THE VALUE OF THE ASSET. ANOTHER FACTOR WHETHER THE ASSESSEE IS HAVING ORGANISED ACT IVITY AS BUSINESS REQUIRES CERTAIN INFRASTRUCTURE. IT IS TRUE THAT I N THE NEW ERA OF THE E- COMMERCE, THE HUGE INFRASTRUCTURE MAY NOT BE REQUIR ED FOR DOING ANY BUSINESS BUT THERE ARE BASIC REQUIREMENTS LIKE GENE RATING THE FUNDS FOR DOING THE DAY TODAY TRANSACTIONS AND IT IS NORM AL PRACTICE IN THE BUSINESS WORLD TO GENERATE THE FUNDS FROM THE BANKS AND OTHER FINANCIAL INSTITUTIONS AND TO AVAIL THE CREDIT ALSO . IN THE PRESENT CASE, AS PER THE RECORD BEFORE US, BOTH THE ASSESSEES HAV E UTILISED THEIR OWN ITA 4858 & 4859/M/2010 MR. KANTI VENECHAND SHAH (HUF) & MR. KANTI VENECHAND SHAH 9 FUNDS AND NO BORROWED FUNDS ARE USED. WHICH SHOWS T HAT THE FUNDS AVAILABLE WITH THE ASSESSEE ARE PUT FOR THE INVESTM ENT PURPOSE. THOUGH, IT MAY NOT BE 100% LOGICAL BUT AS PER THE H UMAN PSYCHOLOGY THE PERSON PUTS HIS MONEY IN ANTICIPATION OF GETTIN G APPRECIATION OF HIS OWN MONEY AND MANY TIMES HE CONVERT MONEY INTO SOME VALUABLE ASSET WITH SAME INTENTION. 10. ANOTHER ASPECT HERE TO BE CONSIDERED IS THAT BO TH THE ASSESSES, ARE CONSISTENTLY SHOWING SHARES AS AN INVESTMENT IN PAST MANY YEARS AND SAID FACT REMAINED UNDISTURBED BY THE A.O.. IN THE CASE OF CIT VS. GOPAL PUROHIT 336 ITR 287(BOM) THE HONBLE JURISDIC TIONAL HIGH COURT HAS HELD THAT AS IN THE SAID CASE THE DEPARTMENT HA S ACCEPTED THE SHARES HELD BY THE ASSESSEE AS AN INVESTMENT CONSIS TENTLY FOR MANY YEARS, THE DEPARTMENT CANNOT TAKE SUMMERSAULT AND T AKE THE DIFFERENT APPROACH. IN SUM AND SUBSTANCE, IN THERE IS NO CHANGE IN THE FACTS AND NATURE OF TRANSACTIONS, THE CONSISTEN CY IN JUDICIAL APPROACH IS DESIRED. AFTER GIVEN OUR ANXIOUS CONSI DERATION TO THE ENTIRETY OF THE FACTS IN BOTH THE CASES, WE ARE OF THE OPINION, THAT THE ORDERS OF THE LD. CIT (A) IN BOTH THESE CASES HAVE TO BE CONFIRMED. WE, ACCORDINGLY, DO SO. 11. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 2 8TH OF DECEMBER, 2011. SD/- SD/- ( G.E. VEERABHADRAPPA ) PRESIDENT ( R.S. PADVEKAR ) JUDICIAL MEMBER MUMBAI, DATE : 28TH DECEMBER, 2011 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) 30, MUMBAI. 4) THE CIT-CITY -19, MUMBAI. 5) THE D.R. A BENCH, MUMBAI. ORDER PRONOUNCED IN THE OPEN COURT ON 28.12.2011 SD/- SD/- (JSR) (RSP) ITA 4858 & 4859/M/2010 MR. KANTI VENECHAND SHAH (HUF) & MR. KANTI VENECHAND SHAH 10 BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR I.T.A.T., MUMBAI *CHAVAN ITA 4858 & 4859/M/2010 MR. KANTI VENECHAND SHAH (HUF) & MR. KANTI VENECHAND SHAH 11 SR.N. EPISODE OF AN ORDER DATE INITIALS CONCERNED 1 DRAFT DICTATED ON 14.12.2011 SR.PS 2 DRAFT PLACED BEFORE AUTHOR 15.12.2011 SR.PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER