UPENDRA K DOSHI, MUMBAI V. ACIT CIR 4(2), MUMBAI

ITA 543/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78996 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2009-2010
• Appeal Filed On: 18-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PITAMBAR DAS
• Keywords: Capital asset; Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUM BAI , BEFORE SHRI D. MANMOHAN, VP AND SHRI SANJAY ARORA, AM I.T.A. NOS. 542 & 543/MUM/2013 ( / ASSESSMENT YEAR: 2007-08 & 2009-10) UPENDRA K. DOSHI B-30, PARAMESHWAR DHAM, ROAD NO.7, RAJAWADI, GHATKOPAR (E), MUMBAI-400 077 VS. ASST. CIT, CIRCLE 4(2) AAYAKAR BHAVAN, 6 TH FLOOR, M. K. MARG, MUMBAI-400 002 ! ' ./PAN/GIR NO. AABPD 4155 E ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) !#&' / APPELLANT BY : SHRI RASHMIKANT MODI $%!#&' / RESPONDENT BY : SHRI PITAMBAR DAS ( )*&+, / DATE OF HEARING : 08.04.2014 -./&+, / DATE OF PRONOUNCEMENT : 28.05.2014 0 O R D E R PER SANJAY ARORA, A. M.: THIS IS A SET OF TWO APPEALS BY THE ASSESSEE DIRECT ED AGAINST THE ORDERS BY THE COMMISSIONER OF INCOME TAX (APPEALS)-8, MUMBAI (CI T(A) FOR SHORT) DATED 05.11.2012, PARTLY ALLOWING THE ASSESSEES APPEALS CONTESTING ITS ASSESSMENTS U/S.143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMENT YEARS (A.YS.) 2007-08 AND 2009-10. 2 ITA NOS. 542 & 543/MUM/2013 (A.YS. 07-08 & 09-10) UPENDRA K. DOSHI VS. ASST. CIT 2. THE PRINCIPAL ISSUE IN THESE APPEALS IS THE NATU RE OF THE GAINS INURING TO THE ASSESSEE ON THE PURCHASE AND SALE OF SHARES, ARISIN G IN A POSITIVE SUM OF RS.57.43 LACS AND IN THE NEGATIVE SUM OF RS. 22.20 LACS FOR THE SUCCE SSIVE YEARS RESPECTIVELY, I.E., EITHER AS SHORT TERM CAPITAL GAIN/LOSS (STCG), AS RETURNED BY THE ASSESSEE, OR AS BUSINESS INCOME, AS ASSESSED. THE SAME BEING CONFIRMED AS BUSINESS I NCOME IN FIRST APPEAL, THE ASSESSEE IS IN SECOND APPEAL. 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. WE FIND THIS TO BE A SUBSISTING ISSUE IN THE ASSESS EES CASE, WITH THE TRIBUNAL HAVING DECIDED THE SAME FOR BOTH THE EARLIER AS WEL L AS SUBSEQUENT YEAR/S, BEING A.YS. 2004-05 TO 2006-07 AND A.Y. 2008-09. THE CONSOLIDAT ED ORDER FOR A.YS. 2005-06, 2006- 07 AND 2008-09 IS ON RECORD (ITA NOS.1499 & 3541/MU M(F)/2009 AND 7854/MUM/2011, DATED 14.08.2013). FOR ALL THE SAID YEARS, THE TRIB UNAL HAS TAKEN A CONSISTENT VIEW THAT THE ASSESSEE IS IN RESPECT OF THE SHARES HELD AND DISCL OSED BY HIM AS AN INVESTMENT IN HIS ACCOUNTS, TO BE TREATED AS AN INVESTOR, SO THAT THE SAME ARE CAPITAL ASSETS, YIELDING CAPITAL GAINS, WHETHER LONG-TERM OR SHORT-TERM, I.E., DEPEN DING UPON THE PERIOD OF HOLDING. FURTHER, THE REVENUE HAS IN FACT ACCEPTED THE ASSES SEES CLAIM WITH REGARD TO LONG TERM CAPITAL GAIN (LTCG), AND WHICH APPEARS CONTRAD ICTORY TO ITS STAND IN-AS-MUCH AS IT IS THE NATURE OF ASSETS, WHETHER CAPITAL OR TRADING , THAT IS RELEVANT, WITH THE NATURE OF THE GAIN ARISING ON ITS TRANSFER, I.E., CAPITAL GAINS OR BUSINESS INCOME, BEING CONSEQUENTIAL. IF AN ASSET IS PURCHASED WITH THE INTENTION OF HOLD ING IT AS AN INVESTMENT, IT STANDS TO BE CLASSIFIED AS A CAPITAL ASSET. WHEN THE SAME IS SOL D, WHICH IS A MATTER BOTH SUBSEQUENT AND UNCERTAIN IN TIME (AT THE RELEVANT TIME), WOULD NOT DETERMINE IT BEING A CAPITAL ASSET OR NOT SO AND, AS SUCH, THE LENGTH OF THE HOLDING WOULD ON LY ALTER THE CATEGORY OF THE CAPITAL GAINS, I.E., LONG-TERM OR SHORT-TERM, AND NOT THE N ATURE OF THE GAIN ITSELF, I.E., AS CAPITAL GAINS OR AS BUSINESS INCOME. WE ARE CONSCIOUS THAT THE ASSESSEES DISCLOSURE IN ACCOUNTS IS, THOUGH RELEVANT, NOT CONCLUSIVE BY ITSELF, AND A NUMBER OF RELEVANT PARA METERS, VIZ. REGULARITY, FREQUENCY, VOLUME, TRADING AND FINANCING PATTERN, ETC., ALSO S PECIFIED BY THE BOARD PER ITS CIRCULAR, 3 ITA NOS. 542 & 543/MUM/2013 (A.YS. 07-08 & 09-10) UPENDRA K. DOSHI VS. ASST. CIT ARE REQUIRED TO BE LOOKED INTO TO DETERMINE THE NAT URE OF AN ASSET, WHICH IS THUS PRIMARILY A FACTUAL MATTER. HOWEVER, WE ARE NOT INCLINED TO E ITHER UNDERTAKE OR DIRECT ANY EXERCISE ALONG THE SAID LINES TO BE UNDERTAKEN. THIS IS, AS AFORE-STATED, IN THE INSTANT CASE THE ASSESSEE HAS BEEN FOUND BY THE TRIBUNAL TO BE AN IN VESTOR QUA THE SHARES HELD AS INVESTMENTS. THE SHARES BROUGHT FORWARD FROM THE EA RLIER YEARS WOULD THEREFORE ONLY BE CAPITAL ASSETS. IN FACT, WE OBSERVE THE AUTHORITIES BELOW TO HAVE ALSO RELIED ON THEIR FINDINGS FOR AN EARLIER YEAR, I.E., A.Y. 2006-07, D ECISION FOR WHICH STANDS ALREADY RENDERED BY THE TRIBUNAL, CITED BY US SUPRA. 4. IN VIEW OF THE FOREGOING, FOLLOWING THE CONSISTE NT VIEW OF THE TRIBUNAL, WE ARE INCLINED TO ACCEPT THE ASSESSEES STAND OF THE SHAR ES TRANSFERRED AS REPRESENTING CAPITAL ASSETS, SO THAT THE IMPUGNED GAIN/LOSS IS ASSESSABL E UNDER THE HEAD CAPITAL GAINS AND NOT AS BUSINESS INCOME. WE DECIDE ACCORDINGLY. 5. THE ONLY OTHER ISSUE ARISING IN THE INSTANT APPE ALS IS PER GD. NO. 2 FOR A.Y. 2007- 08, I.E., QUA DISALLOWANCE U/S. 14A. THE SAME WAS SPECIFICALLY N OT PRESSED BY THE LD. AR DURING HEARING. THE SAME IS ACCORDINGLY DISMISSED A S NOT PRESSED. WE DECIDE ACCORDINGLY. 6. IN THE RESULT, THE ASSESSEES APPEAL FOR A. Y. 2 007-08 IS PARTLY ALLOWED, AND THAT FOR A.Y. 2009-10 ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON MAY 28, 2014 SD/- SD/- (D. MANMOHAN) (SANJAY ARORA) / VICE PRESIDENT / ACCOUNTANT MEMBER ( 1* MUMBAI; 2 DATED : 28.05.2014 )3 ROSHANI , SR. PS 4 ITA NOS. 542 & 543/MUM/2013 (A.YS. 07-08 & 09-10) UPENDRA K. DOSHI VS. ASST. CIT !' # $%&' (!'% COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. ( 4+ 5 6 / THE CIT(A) 4. ( 4+ / CIT - CONCERNED 5. 7)89$3+3:; ,:;/ ( 1* / DR, ITAT, MUMBAI 6. 9<=* GUARD FILE !' ) / BY ORDER, */)+ , (DY./ASSTT. REGISTRAR) , ( 1* / ITAT, MUMBAI