ADDL CIT 19(2), MUMBAI V. RAMESH C. SHAH, MUMBAI

ITA 5426/MUM/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 55793 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2011
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 24-10-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 30-09-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: C G K NAIR
• Assessee Lawyers: VIPUL B JOSHI
• Keywords: Business income; Opportunity of being heard; Transactions in derivatives
• Section: 43(5)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES MUMBAI BENCHES MUMBAI BENCHES MUMBAI BENCHES D DD D, MUMBAI , MUMBAI , MUMBAI , MUMBAI BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI T.R.SOOD T.R.SOOD T.R.SOOD T.R.SOOD ( (( (A.M.) A.M.) A.M.) A.M.) AND AND AND AND SHRI R.S. PADVEKAR SHRI R.S. PADVEKAR SHRI R.S. PADVEKAR SHRI R.S. PADVEKAR (J (J (J (J.M.) .M.) .M.) .M.) ITA NO.5426/MUM/2009 ASSESSMENT YEAR : 2006-07 ADDITIONAL C.I.T. 19(2) R.NO.315, 3RD FLOOR, PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI 400012 VS. VS. VS. VS. DR.RAMESH C. SHAH, 26 B CLIFTON, 5 TH FLOOR, BIRLA CORNET, JUHU, MUMBAI 400047 PAN NO. AAFFA 1100 L (APPLICANT) (APPLICANT) (APPLICANT) (APPLICANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) APPLICANT BY : SHRI C.G.K. NAIR, SR.DR RESPONDENT BY : SHRI VIPUL B. JOSHI DATE OF HEARING: 24/10/2011 DATE OF PRONOUNCEMENT: /2011 O R D E R O R D E R O R D E R O R D E R PE PEPE PEP P P P R.S. PADVEKAR, (J R.S. PADVEKAR, (J R.S. PADVEKAR, (J R.S. PADVEKAR, (J. .. .M) M)M) M) IN THIS APPEAL, THE REVENUE HAS CHALLENGED THE IMP UGNED ORDER OF THE LD. CIT (A)-19 MUMBAI DATED 21 ST JULY, 2009 FOR THE ASSESSMENT YEAR 2006-07. 2. THE FIRST ISSUE IS FROM WHICH DATE THE INSERTION OF CLAUSE (D) TO SECTION 43(5) WILL BE OPERATIVE, WHETHER FROM THE D ATE OF NOTIFICATION OF STOCK EXCHANGE AS A RECOGNISED STOCK EXCHANGE OR FR OM 1.4.2006. 3. WE HEARD THE PARTIES. THE ISSUE ARISING FROM GRO UND NO.1 & 2 IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION O F THE HON'BLE SPECIAL ITA NO.5426 OF 2009 DR.RAMESH C.SHAH,JUHU- MUMBAI 2 BENCH OF THE TRIBUNAL IN THE CASE OF SHREE CAPITAL SERVICES LTD., VS. ACIT 121 ITD 498 (KOL) SB. THE SPECIAL BENCH HAS EXAMINE D THE APPLICABILITY OF CLAUSE (D) OF SEC.43(5) OF THE ACT, WHICH IS INTROD UCED BY THE FINANCE ACT, 2005 AND IT IS HELD THAT CLAUSE D IS APPLICABLE FRO M 1.4.2006 I.E. FROM ASSESSMENT YEAR 2006-07. MERELY BECAUSE NOTIFICATIO N IS ISSUED RECOGNISING STOCK EXCHANGE FROM 25.1.2006, BUT AS R ECOGNITION IS MADE PRIOR TO 31.3.2006, ALL THE DERIVATIVES AND FUTURE AND OPTIONAL TRANSACTIONS ARE TO BE TREATED AS BUSINESS TRANSACTIONS FROM THE ASSESSMENT YEAR 2006-07 AND PROFIT OR GAIN FROM THE SAID TRANSACTIO NS WOULD BE TREATED AS NON SPECULATIVE I.E. BUSINESS INCOME. WE ACCORDINGL Y FIND NO REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT (A) AND WE CONFIRM THE SAME. ACCORDINGLY GROUND NOS.1 & 2 IS REPLACED. 4. GROUND NO.3 READS AS UNDER. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT (A) ERRED IN HOLDING THAT THE TREAT MENT GIVEN BY THE AO TO THE SHARES TRANSACTIONS AS BUSINESS IN COME WAS NOT CORRECT DESPITE THE FACT THAT THE TRANSACTIONS WERE REPEATITIVE, NUMEROUS AND PURCHASE AND SALE OF SHAR ES HAD BEEN RESTORED TO WITHIN A SHORT SPAN OF TIME WITH A N INTENTION TO EARN PROFIT. RELIANCE IS PLACED ON THE DECISION OF THE HONBLE ITAT, AHMEDABAD BENCH IN THE CASE OF CIT VS . SMT. DEEPABEN AMITAB SHAH (2006, 100 ETJ)(AHD)(1065). ITA NO.5426 OF 2009 DR.RAMESH C.SHAH,JUHU- MUMBAI 3 5. THE ASSESSEE IS A DOCTOR BY PROFESSION WHO IS AN EYE SURGEON. THE ASSESSEE HAS DECLARED SHORT TERM CAPITAL GAIN ON SA LES TRANSACTIONS OF SHARES AND SECURITIES TO THE EXTENT OF `3,18,08,566 /-. THE ASSESSING OFFICER ASKED THE ASSESSEE TO SUBMIT DETAILED CHART SHOWING SCRIPS WISE DETAILS PERTAINING TO THE SHORT TERM CAPITAL GAIN, BY GIVING THE DETAILS OF THE PURCHASE OF SHARES, SALES OF THE SHARES, HOLDIN G PERIOD, QUANTITY, AMOUNT OF GAIN AND LOSS IN EACH TRANSACTIONS ETC. T HE ASSESSEE FILED ITS REPLY SUPPORTING HIS STAND THAT IT IS ONLY THE CAPI TAL GAIN AND CANNOT BE THE BUSINESS INCOME OF THE ASSESSEE. THE SUM AND SUBSTA NCE OF THE EXPLANATION OF THE ASSESSEE WAS THAT HE IS VERY MUC H PRE-OCCUPIED IN HIS PROFESSION AND HENCE, IT IS VERY DIFFICULT FOR HIM TO TAKE OUT TIME FOR DOING ANY BUSINESS OR TO ORGANISE THE ACTIVITY OF THE SHA RE TRADING. THE ASSESSEE CONTENDED THAT HE IS AN INVESTOR AND NOT A TRADER. THE ASSESSEE ALSO STATED THAT EVEN IF THE SENSEX WAS CRASHED ON SOM E OCCASIONS FROM 21,000 TO 8000 IN THE LAST SIX MONTHS, THE ASSESSEE CONTINUED TO HOLD SUBSTANTIAL INVESTMENTS EVEN TAKING THE RISK OF THE LOSS. THE ASSESSEE ALSO STATED THAT THE SHARES ARE TREATED AS INVESTMENT AN D NOT AS A STOCK IN TRADE. THE ASSESSING OFFICER WAS NOT IMPRESSED WITH ALL THE EXPLANATION OF THE ASSESSEE. IN HIS OPINION, THE CLAIM OF THE ASSE SSEE AS AN INVESTOR CANNOT BE ACCEPTED AS THE ASSESSEE WAS INVOLVED IN THE ORGANISED ACTIVITY. MOREOVER, THERE WAS VOLUME OF THE TRANSAC TIONS AND FREQUENCY OF THE TRANSACTIONS WERE ALSO MORE. THE ASSESSING OFFI CER FINALLY REJECTED THE CONTENTION THAT THE GAINS/PROFIT ON THE SHARE TRANS ACTIONS IS TO BE TREATED ITA NO.5426 OF 2009 DR.RAMESH C.SHAH,JUHU- MUMBAI 4 AS SHORT TERM CAPITAL GAIN. THE REASONS GIVEN BY TH E ASSESSING OFFICER TO ARRIVE AT THESE CONCLUSIONS ARE AS UNDER: 11.10. ON APPLICATION OF THE AFORESAID GUIDING PRI NCIPLES TO THE FACTS OF THE CASE UNDER CONSIDERATION, FOLLOWIN G CONCLUSIONS CAN BE DRAWN: 1. VOLUME OF TRANSACTIONS IN SHARES: AS STATED DURING THE PERIOD RELEVANT TO ASSESSMENT YEAR 2006-07 UNDER CONSIDERATION, THE ASSESSEE HAS PURCHASED SHARES AMOUNTING TO `14,52,72,736/- AND SOLD THE SAME FOR THE CURRENT YEAR. 2. 2.2. 2. FREQUENCY OF TRANSACTION FREQUENCY OF TRANSACTION FREQUENCY OF TRANSACTION FREQUENCY OF TRANSACTION: IN THE ASSESSEES CASE IT IS CLEAR THAT THERE HAS BEEN A VERY HIGH REGULARITY IN THE T RADING PATTERN AND SHARES HAVE BEEN PURCHASED AND SOLD AT VERY PURCHASED AND SOLD AT VERY PURCHASED AND SOLD AT VERY PURCHASED AND SOLD AT VERY REGULAR INTERVALS, WHETHER IT IS IN RESPECT OF BUYI NG REGULAR INTERVALS, WHETHER IT IS IN RESPECT OF BUYI NG REGULAR INTERVALS, WHETHER IT IS IN RESPECT OF BUYI NG REGULAR INTERVALS, WHETHER IT IS IN RESPECT OF BUYI NG OF OF OF OF SHARES OF A SINGLE COMPANY OR IN RESPECT OF BUYING AND SHARES OF A SINGLE COMPANY OR IN RESPECT OF BUYING AND SHARES OF A SINGLE COMPANY OR IN RESPECT OF BUYING AND SHARES OF A SINGLE COMPANY OR IN RESPECT OF BUYING AND SELLING OF SHARES OF ANY A COMPANIES. SELLING OF SHARES OF ANY A COMPANIES. SELLING OF SHARES OF ANY A COMPANIES. SELLING OF SHARES OF ANY A COMPANIES. 3. 3.3. 3. THE ASSESSEE HAS BORROWED MONEY FROM FAMILY MEMBERS . 4. THE ASSESSEE IS ACTIVELY ENGAGED IN STOCK MARKET OPERATIONS DIRECTLY. THE ASSESSEE HAS ALSO DECLARED SPECULATION/F&O INCOME FROM SHARES. IT WOULD ALSO B E IT WOULD ALSO BE IT WOULD ALSO BE IT WOULD ALSO BE GERMANE TO NOTE THAT THE INTENTION OF THE ASSESSEE IS QUITE GERMANE TO NOTE THAT THE INTENTION OF THE ASSESSEE IS QUITE GERMANE TO NOTE THAT THE INTENTION OF THE ASSESSEE IS QUITE GERMANE TO NOTE THAT THE INTENTION OF THE ASSESSEE IS QUITE CLEAR GIVEN THE LARGE SCALE, VOLUMINOUS PERIODIC RE PETITIVE CLEAR GIVEN THE LARGE SCALE, VOLUMINOUS PERIODIC RE PETITIVE CLEAR GIVEN THE LARGE SCALE, VOLUMINOUS PERIODIC RE PETITIVE CLEAR GIVEN THE LARGE SCALE, VOLUMINOUS PERIODIC RE PETITIVE AND NUMEROUS TRANSACTIONS AND NUMEROUS TRANSACTIONS AND NUMEROUS TRANSACTIONS AND NUMEROUS TRANSACTIONS. 5. PERIOD OF HOLDING: PERIOD OF HOLDING: PERIOD OF HOLDING: PERIOD OF HOLDING: - AS REGARD THE AVERAGE PERIOD OF HOLDING, IT CAN BE APPRECIATED THAT OUT OF TOTAL TRANSACTIONS OF 874 RESULTING IN THE TOTAL SHORT TE RM CAPITAL GAIN CLAIMED OF `3,18,31,739/-, TRANSACTION S WHERE THE PERIOD OF HOLDING IS UPTO SIX (6) MONTHS ARE 64 0 AND GAIN RESULTING FROM THE SAID TRANSACTIONS AMOUNTS T O `2,25,05,263/- WHICH IS MORE THAN 70% OF THE TOTAL GAIN ITA NO.5426 OF 2009 DR.RAMESH C.SHAH,JUHU- MUMBAI 5 AND MORE THAN 73% OF THE TOTAL TRANSACTIONS DURING THE YEAR. 6. MOTIVE O THE ASSESSEE MOTIVE O THE ASSESSEE MOTIVE O THE ASSESSEE MOTIVE O THE ASSESSEE :- IN THE CASE UNDER CONSIDERATION, THE ASSESSEE HAS FREQUENTLY PURCHASE AND SOLD SHARE S IN LARGE QUANTITIES AND THE AVERAGE HOLDING PERIOD OF THESE SHARES IS VERY SHORT. ALSO DURING THE YEAR, TOTAL D IVIDEND INCOME DECLARED BY THE ASSESSEE IS MERELY `14,89,62 5/- WHICH ALSO INCLUDES DIVIDEND EARNED IN RESPECT OF S HARES HELD FOR A PERIOD OF MORE THAN ONE YEAR AND WHICH H AS BEEN INDICATED AS LONG TERM CAPITAL WHEREAS SHORT T ERM GAIN CLAIMED IS `3,18,31,739/-. HENCE IT IS CLEAR T HAT THESE SHARES WERE NOT PURCHASED BY THE ASSESSEE FOR INVESTMENT PURPOSE, BUT WERE PURCHASED AND SOLD WIT H THE SOLE INTENTION OF EARNING PROFIT FROM THEM. 11.11. FURTHER, RELIANCE IS PLACED ON THE DECISION OF THE LD. ITAT AHMEDABAD BENCH IN THE CASE OF DCIT VS. DEEPAB EN A. SHAH 100 TTJ (AHD.), 1065, WHEREIN IT IS HELD THAT WHETHER OR NOT THE ASSESSEE CARRIES ON A BUSINESS IN A PARTICU LAR COMMODITY CAN BE INFERRED FROM THE FREQUENCY CONTIN UITY AND HOLDING PERIOD OF THE SCRIPTS AS WELL AS THE MO TIVE INVOLVED. WHILE DECIDING THE ABOVE JUDGMENT HON'BLE ITAT FOLLOWED THE DECISION MENTIONED IN 113 ITR 173. THE RATIO LAID DOWN BY THEN AFORESAID DECISION IS SQUARELY APPLICABLE IN THE CASE UNDER CONSIDERATION SINCE THERE IS ENOUGH VOLUME, CONTINUITY AND FREQUENCY OF TRANSACTIONS. MOST IMPORTANTLY, THE CIRCUMSTANCES I NDICATE THAT THE MOTIVE OF THE ASSESSEE IS TO GAIN PROFIT B Y CARRYING OUT A SYSTEMATIC ACTIVITY OF PURCHASE AND SALE OF S HARES WITH A CLOSE WATCH ON THE MARKET SITUATION. THERE IS NO MOTIVE APPARENT O HOLDING THE SHARES AS ASSETS. IN VIEW OF THE FOREGOING, IT EMERGES THAT THE ASSESSEE HAS REGULAR LY BEEN INDULGING IN BUYING AN SELLING SHARES OF COMPANIES, THE FREQUENCY OF THE TRADE AND THE VOLUME OF TRADES ARE VERY HIGH AN THE RATIO BETWEEN THE PURCHASE AND THE SALE IS ALSO QUITE HIGH. THE TRANSACTIONS ARE NUMEROUS INVOLVING BOTH PURCHASE AND SALE. ITA NO.5426 OF 2009 DR.RAMESH C.SHAH,JUHU- MUMBAI 6 11.12 THE FACT THAT THE AUTHORITIES DID NOT IN SPIT E OF TRANSACTIONS, TREAT THE ASSESSEE AS A SHARE DEALER IN THE PRECEDING YEAR CANNOT IN ANY WAY OPERATE AS RES JU DICATA TO PRELUDE THE AUTHORITIES FROM HOLDING THAT HIS TR ANSACTIONS THIS YEAR AMOUNTED TO DEALINGS (NEW JEHANGIR VAKIL MILL LTD. VS. CIT (1963) 49 ITR (SC) 137). 11.13 IN ASSESSMENT YEAR 2004-05, FOR THIS PURPOSE, THE ASSESSEE WAS ASKED TO GIVE A DETAILS TRIFURCATION O F THE CONCERNED SCRIPTS WITH RESPECT TO THE LENGTH OF THE AVERAGE HOLDING PERIOD I.E. TO SAY THREE PERIODS WERE CHALK ED OUT. THE SAID PERIODS WERE SCRIPTS WITH AVERAGE HOLDING PERIOD OF LESS THAN THREE MONTHS, THOSE WITH HOLDING PERIOD G REATER THAN THREE MONTHS AND UPTO SIX MONTHS AND SCRIPTS W ITH AVERAGE HOLDING PERIOD GREATER THAN SIX MOTHS. FURT HER, FOR EACH SUCH CATEGORY OF THE SCRIPTS SO CLASSIFIED, TH E SCRIPT WISE GAIN AND LOSS WAS ALSO COMPUTED. FURTHER, THE ASSESSEE WAS ASKED TO JUSTIFY HIS CLA IM IN THE LIGHT OF THE DECISION OF THE LD. ITAT AHMEDABAD BENCH IN THE CASE OF DCIT VS. SMT. DEEPABEN AMITBHAI SHAH (2 006, 100 TTJ (AHD) 1065), WHEREIN IT IS HELD THAT WHETHE R OR NOT A PERSON CARRIES ON BUSINESS IN A PARTICULAR COMMODIT Y CAN BE INFERRED FROM THE VOLUME, FREQUENCY, CONTINUITY AND REGULARITY OF THE TRANSACTIONS AND THE MOTIVE INVOL VED. 11.14 IT WAS HELD IN ASSESSMENT YEAR 2004-05 THAT L OOKING INTO THE MULTIPLICITY OF TRANSACTIONS AND THE POSIT ION OF THE AVERAGE HOLDING PERIOD, THE GAIN/LOSS FROM THE SCRI PTS HELD UPTO 6 MONTHS SHALL BE HELD TO BE FOR PURPOSES OF B USINESS WHEREAS THE SCRIPTS WHERE THE AVERAGE HOLDING PERIO D IS GREATER THAN SIX MONTHS WOULD BE ALLOWED TO REMAIN AS PARTAKING OF THE CHARACTER OF CAPITAL LOSS OR GAIN. IN THE ABOVE REFERRED YEAR, THE LD. CIT (A) ALLOWED THE CL AIM OF THE ASSESSEE OBSERVING THAT THE ASSESSING OFFICER DID N OT FOLLOW THE BOARDS CIRCULAR NO.4 DATED 15 TH JUNE 2007. HOWEVER, THE LD. CIT (A) ERRED IN IGNORING THE FACTS THAT THE SA ID ORDER WAS PASSED MUCH BEFORE THE BOARDS CIRCULAR CAME IN FOR CE. THE LD. CIT (A) ALSO FAILED TO APPRECIATE THAT THE SAID ASSESSMENT ITA NO.5426 OF 2009 DR.RAMESH C.SHAH,JUHU- MUMBAI 7 ORDER WAS BASED ON THE FINDINGS OF AHMEDABAD TRIBUN AL (SUPRA). 11.15 AS HELD IN ASSESSMENT YEAR 2004-05, ON SIMILA R LINES, IN THIS PARTICULAR CASE IT IS THE AVERAGE HOLDING P ERIOD WHICH WILL HOLD THE KEY FOR THE ULTIMATE DECISION AND RES OLUTION OF WHETHER THE SCRIPTS HAVE BEEN HELD AS ASSETS OR WHE THER THEY PARTAKE THE CHARACTER OF INSTRUMENTS BEING HEL D FOR DERIVING GAIN OUT OF THEM. THE ASSESSEE WAS ASKED TO GIVE A TRIFURCATION ON SIMILAR LINES WITH ASSESSMENT YEAR 2004-05. THE AVERAGE HOLDING PERIOD WISE CLASSIFICATION OF S CRIPTS AS SUBMITTED AND THE OVERALL POSITION AS REGARDS THE G AIN AS DETERMINED THEREIN IS AS UNDER:- AVERAGE HOLDING PERIOD AVERAGE HOLDING PERIOD AVERAGE HOLDING PERIOD AVERAGE HOLDING PERIOD GAIN/LOSS GAIN/LOSS GAIN/LOSS GAIN/LOSS LESS THAN 3 MONTHS 89,90,339 BETWEEN 3 MONTHS TO 6 MONTHS 1,35,14,924 MORE THAN 6 MONTHS 93,26,476 CUMULATIVE CUMULATIVE CUMULATIVE CUMULATIVE GAIN GAIN GAIN GAIN : :: :- -- - 3,18,31,739/ 3,18,31,739/ 3,18,31,739/ 3,18,31,739/- -- - 11.16 AS HELD IN ASSESSMENT YEAR 2004-05, THE GAIN /LOSS FROM THE SCRIPTS HELD UPTO 6 MONTHS SHALL BE HELD T O BE OR PURPOSES OF BUSINESS WHEREAS THE SCRIPTS WHERE THE AVERAGE HOLDING PERIOD IS GREATER THAN SIX MOTHS WOULD BE A LLOWED TO REMAIN AS PARTAKING OF THE CHARACTER OF CAPITAL LOS S OR GAIN. 11.17 THEREFORE, IN VIEW OF THE ABOVE DISCUSSION, SHORT TERM CAPITAL GAINS OF `.2,25,05,263/- IN RESPECT OF GAIN /LOSS FROM THE SCRIPTS HELD UPTO 6 MONTHS IS TREATED AS BUSINE SS INCOME. 6. THE ASSESSEE CHALLENGED THE ACTION OF THE ASSESS ING OFFICER BEFORE THE LD. CIT (A) AND LD. CIT (A) ACCEPTED THE CONTEN TION AND PLEA OF THE ASSESSEE AND HELD THAT THE TRANSACTIONS OF THE SHAR ES ARE IN THE NATURE OF AN INVESTMENT AND CANNOT BE TREATED AS STOCK IN TRA DE. THE LD. CIT (A) ALSO PLACED HIS RELIANCE ON THE DECISION OF GOPAL P UROHIT VS. CIT 29 SOT ITA NO.5426 OF 2009 DR.RAMESH C.SHAH,JUHU- MUMBAI 8 117 MUM AS WELL AS CIRCULAR NO.4 OF THE CBDT WHICH LAYS DOWN THE GUIDELINES IN A SITUATION WHEN A PERSON CAN HAVE 2 PORTFOLIOS. THE LD. CIT (A) HELD THAT THE ASSESSING OFFICER WAS NOT JUSTIFI ED IN TREATING THE SHORT TERM CAPITAL GAIN DECLARED AT `.2,25,05,263/-. THE REVENUE IS IN APPEAL BEFORE US. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTI ES AND PERUSED THE RECORD. WE ASKED THE LD. COUNSEL WHETHER THE ASSESS EE HAS FILED THE DETAILS OF THE DAY-TO-DAY TRANSACTIONS OF THE SCRIP T. THE LD. COUNSEL SUBMITTED THAT ALL THE DETAILS WERE BEFORE THE ASSE SSING OFFICER. WE HAVE GIVEN OUR ANXIOUS CONSIDERATION TO THE REASONS GIVE N BY BOTH THE PARTIES. THE LD. CIT (A) HAS ACCEPTED AT ENTIRETY THE CONTEN TION OF THE ASSESSEE THAT HE WAS VERY BUSY IN HIS PROFESSIONS AND HE HAS NO TIME TO ORGANISE ACTIVITY IN THE SHARE TRADING. THE LD. CIT (A) HAS ALSO PLACED HIS HEAVY RELIANCE ON THE DECISION IN THE CASE OF GOPAL PUROH IT (SUPRA). (THE SAID DECISION STANDS AFFIRMED BY THE HON'BLE SUPREME CO URT). THE LD. CIT (A) ALSO PREFERRED TO THE CIRCULAR NO.4 OF THE CBDT. SO FAR AS THE ASSESSING OFFICER IS CONCERNED, THOUGH HE HAS DISCUSSED SOME OF THE PARAMETERS, BUT THE VERY IMPORTANT PARAMETER WHAT WAS THE INTEN TION OF THE ASSESSEE TO INDULGE INTO SHARE TRANSACTIONS, WHETHER AS AN I NVESTOR OR AS A TRADER HAS NOT BEEN PROPERLY LOOKED IN TO. IN OUR OPINION, THIS ISSUE NEEDS FRESH CONSIDERATION. MOREOVER, THE REQUIRED DETAILS OF TH E SCRIPTS ARE ALSO NOT FILED BEFORE US. UNDER THE CIRCUMSTANCES WE CONSID ER IT FIT TO RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR FRES H ADJUDICATION. WE MAY ITA NO.5426 OF 2009 DR.RAMESH C.SHAH,JUHU- MUMBAI 9 MAKE IT CLEAR THAT EACH OF THE CASE HAS TO BE EXAMI NED ON ITS OWN FACT AND AS PER THE FACTS ON RECORD IN EACH CASE THE AUT HORITY HAS TO ARRIVE AT A CONCLUSION. NEEDLESS TO SAY THE ASSESSING OFFICER S HOULD GIVE AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND GIVE THE SPECIFIC REASON FOR ARRIVING A HIS CONCLUSION. 8. ACCORDINGLY GROUND NO.3 IS ALLOWED FOR STATISTI CAL PURPOSES. 9. IN THE RESULT, THE APPEAL FILED BY REVENUE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS DAY OF 28TH OCTOBER, 2011 . SD/- (T.R. SOOD) ACCOUNTANT MEMBER SD/- (R.S. PADVEKAR) JUDICIAL MEMBER MUMBAI, DATED: 28TH 28TH 28TH 28TH OCTOBER, OCTOBER, OCTOBER, OCTOBER, 2011 2011 2011 2011 VNODAN/SPS COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT (A) CONCERNED 4. THE CIT CONCERNED 5. DEPARTMENTAL REPRESENTATIVE, BENCH D MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI ITA NO.5426 OF 2009 DR.RAMESH C.SHAH,JUHU- MUMBAI 10 DATE INITIAL DRAFT DICTATED ON 24. 10.2011 SR. P.S. DRAFT PLACED BEFORE THE AUTHOR 25-10-2011 SR. P.S . DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER AM/JM DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM APPROVED DRAFT COMES TO THE SR. PS SR. P.S. KEPT FOR PRONOUNCEMENT ON SR. P.S. FILE SENT TO THE BENCH CLERK SR. P.S. DATE ON WHICH FILE GOES TO THE HEAD CLERK DATE ON WHICH FILE GOES TO THE ASSTT. REGISTRAR FOR SIGNATURE ON THE ORDER. DATE OF DISPATCH