KAPIL KAILASH SUNEJA, MUMBAI V. ACIT CIR 10(2), MUMBAI

ITA 4998/MUM/2012

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0336 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 14-06-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 03-08-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M C OMI NINGSHEN LD
• Keywords: Business income; Salary income; Opportunity of being heard
• Section: 143(3)

Judgement Text

ITA NO.4998/MUM/2012 KAPIL KAILASH SUNEJA ASSESSMENT YEAR-2009-10 IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI , , BEFORE SHRI SANJAY GARG, JM AND SHRI MANOJ KUMAR AGGARWAL, AM I.T.A. NO.4998/MUM/2012 ( ASSESSMENT YEAR: 2009-10) KAPIL KAILASH SUNEJA 9, VIMAL MAHAL, PEDDAR ROAD, MUMBAI -400026 NEW ADDRESS (AS PER RECORD) 1501 B WING LODHA BELLISIMO APOLLO MILLS COMPOUND N.M.JOSHI MARG MAHALAXMI (EAST) MUMBAI 400 011 VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 10(2) ROOM NO.432 AAYAKAR BHAWAN MUMBAI 400 020 !' # PAN/GIR NO. AADPS-3363-E ( '$ APPELLANT ) : ( %&'$ RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : M.C.OMI NINGSHEN, LD. DR ' ( DATE OF HEARING : 14/06/2017 )*+ ( / DATE OF PRONOUNCEMENT : 16 /06/2017 ITA NO.4998/MUM/2012 KAPIL KAILASH SUNEJA ASSESSMENT YEAR-2009-10 2 O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2009-10 ASSAILS THE ORDER OF THE LD. COMMISSIONER O F INCOME-TAX (APPEALS)- 21 [CIT(A)], MUMBAI DATED 03/04/2012. TH E ONLY ISSUE INVOLVED IN THE APPEAL IS ASSESSMENT OF GAINS ON SH ARES UNDER THE HEAD BUSINESS INCOME OR CAPITAL GAINS. 2. NONE HAS APPEARED ON BEHALF OF THE ASSESSEE DESP ITE BEING PROVIDED WITH SUFFICIENT OPPORTUNITY OF BEING HEARD AS PER ORDER SHEET ENTRY AND RPAD NOTICES. NO ADJOURNMENT APPLICATION IS ON RECORD. L EFT WITH NO OPTION, WE PROCEED FURTHER ON THE MERITS OF THE CASE. 3. BRIEFLY STATED, THE ASSESSEE BEING RESIDENT INDIVIDUAL , ENGAGED IN THE BUSINESS OF MANUFACTURING OF AUTO PARTS, WAS ASSESSED U/S 143(3) ON 30/11/2011 FOR IMPUGNED AY AT RS.41,97,900/- AGAINS T RETURNED INCOME OF RS.40,98,173/- FILED BY THE ASSESSEE ON 29/09/20 09. THE ASSESSEE DERIVED INCOME FROM SALARY, HOUSE PROPERTY, BUSINESS, CAPITAL GAINS & OTHER SOURCES. THE ASSESSEE REFLECTED AN AMOUNT OF RS.5,97,334/- AS SHORT TERM CAPITAL GAINS ON PURCHASES AND SALE OF CERTAIN SCRIPS, WHICH IN THE OPINION OF LD. AO WAS ADVENTURE IN THE NATUR E OF TRADE AND HENCE ASSESSABLE UNDER THE HEAD BUSINESS INCOME. 4. AGGRIEVED, THE ASSESSEE ASSAILED THE SAME WITHOU T ANY SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 03/04/2 012. THE ASSESSEE CONTENDED THAT HIS MAIN SOURCE OF INCOME WAS SALARY INCOME AND ITA NO.4998/MUM/2012 KAPIL KAILASH SUNEJA ASSESSMENT YEAR-2009-10 3 BUSINESS INCOME FROM PROPRIETARY CONCERN AND SHARES ACTIVITY CONSTITUTED INVESTMENT ACTIVITY FOR THE ASSESSEE AND HENCE RIGH TLY BEEN OFFERED UNDER THE HEAD CAPITAL GAINS. THE LD. CIT(A) AFTER CONSIDERING THE TRANSACTIONS PATTERN, QUANTITY, PERIOD OF HOLDING E TC. WAS NOT CONVINCED WITH THE ASSESSEES CONTENTION AND DISMISS THE ASSE SSEE GROUND OF APPEAL BY MAKING THE FOLLOWING OBSERVATION:- 3.3 1 HAVE CONSIDERED THE FACTS OF THE CASE. DURIN G APPELLATE PROCEEDINGS THE APPELLANT FILED STATEMENT/CHART OF SHORT TERM CAPITAL GAINS G IVING THEREIN THE DETAILS OF DATE OF PURCHASE, NAME OF SECURITY, QUANTITY PURCHASED PURC HASE AMOUNT, SALE DATE, QUANTITY SOLD, SALE AMOUNT, PROFIT OR LOSS. THE STATEMENT ALSO SHO WS NUMBER OF DAYS FOR WHICH THE SECURITY WAS HELD BY APPELLANT. THE SHARES OF TOTAL 25 COMPA NIES WERE INVOLVED, THE SHARES WHICH WERE PURCHASED AND SOLD BY THE APPELLANT. THE NUMBE R OF SHARES PURCHASED OF EACH SECURITY WAS ALSO EITHER WITHIN 100 OR LESS THAN 1C EXCEPT IN S CASES WHERE THE QUANTITY PURCHASED WAS 1000 OR 5000 SHARES. THE TOTAL PURCHA SE AMOUNT WAS RS:31,80,370/- WHEREAS THE TOTAL SALE AMOUNT WAS RS.37,63,722/- GI VING OVERALL PROFITS /CAPITAL GAINS OF RS.5,97,334/.. THERE WERE SHARES OF ONLY 35 COMPANI ES WHOSE SHARES WERE SUBJECT MATTER OF SALE AND PURCHASE GIVING RISE TO ALLEGED SHORT T ERM CAPITAL GAIN. OUT OF THESE 35 NUMBERS OF TRANSACTIONS, THE SHARES OF 29 COMPANIES WERE HE LD FOR LESS THAN 30 DAYS. IN 15 EASES, THE SHARES WERE HELD FOR 10 OR LESS THAN 10 DAYS. O NLY IN CASE OF 5 TRANSACTIONS, THE SHARES WERE HELD FOR MORE THAN 30 DAYS. THOUGH THE FACTORS OF VOLUME, FREQUENCY, ETC. WERE NOT THERE BUT THE FACTORS OF VERY MINIMUM PERIOD OF HOL DING WERE THERE. IN MOST OF THE CASES THE SHARES WERE HELD FOR LESS THAN 30 DAYS WHICH SHOWS THE INTENTION OF CANING QUICK PROFIT. SUCH INTENTION OF EARNING QUICK PROFIT IS THE INDIC ATION OF BUSINESS ACTIVITY AND NOT THAT OF INVESTMENT ACTIVITY. IT CANNOT HE SO THAT THE BUSIN ESS INCOME ON ACCOUNT OF SALE/PURCHASE OF SHARES CAN BE ONLY EARNED IF ONE IS HAVING HUGE VOL UME, FREQUENCY, USE OR BORROWED FUNDS ETC. ETC. THE BUSINESS PROFIT ON SALE OF SHARES CAN ALSO BE THERE IN SMALL VOLUME TRANSACTIONS AS IN THE CASE OF APPELLANT. THE SINGL E FACTOR OF VERY SHORT PERIOD OF BALDING SHOWS THAT THE APPELLANT WAS ACTING AS A TRADER IN SHARES AND NOT AS AN INVESTOR IN SHARES. THE AO WAS THEREFORE, JUSTIFIED IN HOLDING THAT THE PROFIT OF RS.5,97,334J- EARNED BY APPELLANT ON SALE / PURCHASE OF SHARES WAS BUSINESS INCOME. THIS GROUND OF APPEAL IS THEREFORE, DISMISSED. 5. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. THE LD. DEPARTMENTAL REPRESENTATIVE PLACED RELIANCE ON THE FINDINGS OF THE LD. CIT(A) AND CONCLUSIONS REACHED THEREIN AND CONTENDE D THAT KEEPING IN VIEW THE NATURE OF TRANSACTION AND HOLDING PERIOD, THE SAME HAS RIGHTLY BEEN ASSESSED AS BUSINESS INCOME. ITA NO.4998/MUM/2012 KAPIL KAILASH SUNEJA ASSESSMENT YEAR-2009-10 4 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED RELEVANT MATERIAL ON RECORD. WE FIND THAT THE LD. CIT(A) AFTER ELABOR ATE EXAMINATION OF THE TRANSACTIONS CARRIED OUT BY THE ASSESSEE REACHED TH E CONCLUSION THAT THESE TRANSACTIONS WERE CARRIED OUT AS TRADER IN SH ARES AND NOT AS AN INVESTOR IN SHARES. WE ALSO NOTE THAT PERIOD OF HOL DING IN MOST OF THE CASES WAS LESS THAN 30 DAYS AND SOME PORTION OF GAI N INCLUDED SPECULATION PROFIT ALSO. THEREFORE, WE SEE NO REASO N TO INTERFERE WITH THE ORDER OF LD. CIT(A). 7. RESULTANTLY, THE ASSESSEES APPEAL STANDS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH JUNE, 2017. SD/- SD/- (SANJAY GARG) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER ,' MUMBAI; DATED : 16 .06.2017 SR.PS:- THIRUMALESH COPY OF THE ORDER FORWARDED TO : 1. '$ / THE APPELLANT 2. %&'$ / THE RESPONDENT 3. - / THE CIT(A) 4. - / CIT CONCERNED 5. . % ( / /+ ,' / DR, ITAT, MUMBAI 6. 0 1 ' GUARD FILE ! / BY ORDER, ' !# $ (DY./ASSTT. REGISTRAR) ,' / ITAT, MUMBAI