ITO 20(1)(5), MUMBAI V. HIREN M. DAND, MUMBAI

ITA 5479/MUM/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6820 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 08-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH DESHPANDE
• Keywords: Business income
• Section: 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, JM AND SHRI N. K. PRADHAN, AM ./ I.T.A. NO. 5479/MUM/2016 ( / ASSESSMENT YEAR: 2012 - 13 ) INCOME TAX OFF ICER 20(1)(5), ROOM NO. 121, 1 ST FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI - 400 012 / VS. SHRI HIREN M. DAND 2203, SPRINGS, ISLANDS CITY ENTRE, G. D. AMBEDKAR MARG, NEAR WADALA TELEPHONE EXCHANGE, DADAR (EAST), MUMBAI - 400 014 ./ ./ P AN/GIR NO. AACPD 9760 A ( / APPELLANT ) : ( / RESPONDENT ) & CROSS OBJECTION NO. 36/MUM/2018 (ARISING OUT OF ITA NO. 5479/MUM/2016) ( / ASSESSMENT YEAR: 2012 - 13 ) SHRI HIREN M. DAND MUMBAI - 400 014 / VS. INCOME TAX OFFICER 20(1)(5), MUMBAI - 400 012 ./ ./ PAN/GIR NO. AACPD 9760 A ( CROSS OBECTOR ) : ( / RESPONDENT ) / APPELLANT BY : SHRI SAURABH DESHP ANDE / RESPONDENT BY : SHRI MEHUL SHAH / DATE OF HEARING : 09.05.2018 / DATE OF PRONOUNCEMENT : 01.06 .2018 / O R D E R PER SA KTIJIT DEY , J . M.: TH E AFORESAID APPEAL BY THE DEPARTMENT AND THE CROSS OBJECTION BY THE ASSESSEE ARE AGAINST THE ORDER DATE D 17.06.2016 OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 32, MUMBAI FOR THE ASSESSMENT YEAR 2012 - 13. 2 ITA NO. 5479/MUM/2016 & CO NO.36/MUM/2018 SHRI HIREN M. DAND 2. THE DEPARTMENT IS AGGRIEVED WITH THE DECISION OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IN ACCEPTING ASSESSEES CLAIM THAT INCOME DERIVED FR OM SHARE TRANSACTION IS TO BE ASSESSED AS SHORT TERM CAPITAL GAIN AS AGAINST BUSINESS INCOME AS HELD BY THE ASSESSING OFFICER. 3. BRIEFLY THE FACTS ARE , THE ASSESSEE A N INDIVIDUAL IS STATED TO BE AN INVESTOR IN SHARES AND SECURITIES. FOR THE ASSESSM ENT YEAR UNDER DISPUTE, THE ASSESSEE FILED HIS RETURN OF INCOME ON 16.07.2012 DECLARING TOTAL INCOME OF RS.9,94,117/ - . DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICING THAT THE ASSESSEE HAS OFFERED THE INCOME DERIVED FROM SHARE TRANSACTION AMOUNTING TO RS.46,61,208/ - AS SHORT TERM CAPITAL GAIN, CALLED UPON THE ASSESSEE TO FURNISH THE NECESSARY DE TAILS OF THE SHARE TRANSACTIONS. AFTER VERIFYING THE DETAILS SUBMITTED BY THE ASSESSEE, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE HAS UNDERTAKEN THE ACTIVITIES IN SHARE TRANSACTION AS A BUSINESS. HENCE, THE INCOME DERIVED THERE FROM SUCH ACTIVITY SHOULD BE ASSESSED AS BUSINESS INCOME. ACCORDINGLY , HE ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE CALLING UPON HIM TO EXPLAIN WHY THE INCOME F ROM SHARE TRANSACTION SH OULD NOT BE ASSESSED AS BUSINESS INCOME. IN RESPONSE, THE ASSESSEE FILED ITS REPLY OB JECTING TO THE PROPOSED ACTION OF THE ASSESSING OFFICER. IT WAS SUBMITTED BY THE ASSESSEE THAT FROM THE VERY INCEPTION, THE ASSESSEE HAS CONSISTENT LY TREATED THE SHARE TRANSACTION AS AN INVESTMENT ACTIVITY AND OFFERED CAPITAL GAIN. THEREFORE, IT CANNOT BE CONSIDERED AS A BUSINESS ACTIVITY. THE ASSESSING OFFICER, HOWEVER, DID NOT FIND MERITS IN THE 3 ITA NO. 5479/MUM/2016 & CO NO.36/MUM/2018 SHRI HIREN M. DAND SUBMISSION OF THE ASSESSEE AND PROCEEDED TO ASSESS TH E INCOME DERIVED FROM SHARE TRANSACTION AS BUSINESS INCOME , AS AGAINST THE ASSESSEES CLAIM OF SHORT TERM CAPITAL GAIN. 4. BEING AGGRIEVED WITH THE AFORESAID DECISION OF THE ASSESSING OFFICER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS). 5. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE AND APPLYING HIS MIND TO THE FACTS AND MATERIALS BROUGHT ON RECORD, FOUND THAT RIGHT FROM THE INCEPTION, THE ASSESSEE HAS UNDE RTAKEN THE SHARE TRANSACTION AS AN INVESTMENT ACTIVITY AND OFFERED THE INCOME DERIVED THERE FROM AS CAPITAL GAIN. HE FOUND THAT IN THE ASSESSMENT YEAR 2004 - 05, THE INCOME OFFERED FROM SHARE TRANSACTION UNDER THE HEAD CAPITAL GAIN WAS TREATED AS BUSINESS IN COME BY THE ASSESSING OFFICER. HOWEVER, THE COMMISSIONER (APPEALS) ACCEPTED THE CLAIM OF THE ASSESSEE WHICH WAS NOT CONTESTED BY THE DEPARTMENT. HE FURTHER FOUND THAT IN THE ASSESSMENT YEAR 2008 - 09, THE TRIBUNAL HAS ACCEPTED THE CLAIM OF THE ASSESSEE IN OF FERING THE INCOME DERIVED FROM SHARE TRANSACTION UNDER THE HEAD CAPITAL GAIN. HE FOUND THAT IN THE ASSESSMENT YEARS 2006 - 07 AND 2007 - 08 AS WELL AS IN ASSESSMENT YEAR 2013 - 14, THE ASSESSING OFFICER HIMSELF HAS ACCEPTED THE CLAIM OF THE ASSESSEE IN OFFERING THE INCOME DERIVED FROM SHARE TRANSACTION UNDER THE HEAD CAPITAL GAIN. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAVING FOUND THAT THE FACTS IN THE IMPUGNED ASSESSMENT YEAR ARE MATERIALLY IDENTICAL, HENCE , APPLYING THE RULE OF 4 ITA NO. 5479/MUM/2016 & CO NO.36/MUM/2018 SHRI HIREN M. DAND CONSISTENCY AND FOLLOWING THE DECISION OF THE TRIBUNAL HE DELETED THE ADDITION MADE BY THE ASSESSING OFFICER FROM THE SHARE TRANSACTIONS UNDER THE HEAD BUSINESS AND IN THE PROCESS ACCEPTED ASSESSEES CLAIM. 6. WE HAVE HEARD THE PARTIES AND PERUSED THE MATERIALS ON RECORD. AT TH E OUTSET, THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE ISSUE IN DISPUTE IS COVERED BY THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008 - 09. IN THIS CONTEXT, HE DREW OUR ATTENTION TO A COPY OF THE ORDER IN ITA NO. 4163/MUM /2012 DATED 28.02.2014 WHICH ARE PLACED AT PAGE 36 OF THE PAPER BOOK. THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED , THE AFORESAID DECISION OF THE TRIBUNAL H AS ALSO BEEN UPHELD BY THE HON'BLE JURISDICTIONAL HIGH COURT IN THE I NCOME TAX APPEAL NO. 1750 OF 201 4 DATED 01.08.2017 WHILE DISMISSING THE DEPARTMENTS APPEAL. DRAWING AN ANALOGY BETWEEN THE FACTUAL POSITION AS INVOLVED IN ASSESSMENT YEAR 2008 - 09 AND IN THE IMPUGNED ASSESSMENT YEAR, THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED , AS AGAINST 10 SCRIPS DEALT WITH BY THE ASSESSEE IN ASSESSMENT YEAR 2008 - 09, IN THE IMPUGNED ASSESSMENT YEAR THE ASSESSEE HAS DEALT WITH ONLY 6 SCRIP S . THEREFORE, HE SUBMITTED , THE FACTS BEING IDENTICAL, THE DECISION OF THE TRIBUNAL AND THE HON'BLE JURISDICTIONAL HIGH COURT WILL APP LY TO THE IMPUGNED ASSESSMENT YEAR AS WELL. THE LD. DEPARTMENTAL REPRESENTATIVE FAIRLY SUBMITTED THAT THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE IN THE EARLIER ASSESSMENT YEAR BY THE TRIBUNAL AND THE HON'BLE JURISDICTIONAL HIGH COURT. CONSIDERING THE SUBMISSIONS MADE BY THE LD. COUNSEL S APPEARING FOR BOTH 5 ITA NO. 5479/MUM/2016 & CO NO.36/MUM/2018 SHRI HIREN M. DAND THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE ARE OF THE OPINION THAT THE ISSUE IN DISPUTE IS COVERED BY THE DECISION OF THE CO - ORDINATE BENCH IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 200 8 - 09 WHICH HAS ALSO BEEN UPHELD BY THE HON'BLE JURISDICTIONAL HIGH COURT IN THE ORDER REFERRED TO ABOVE. IN VIEW OF THE AFORESAID, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS). THE GROUNDS RAISED ARE DISMISSED. 7 . AS REGARDS THE CROSS OBJECTION FILED BY THE ASSESSEE, THERE IS A DELAY OF 07 DAYS IN FILING THE SAME. THE ASSESSEE HAS NOT FILED ANY APPLICATION EXPLAINING THE CAUSE OF DELAY AND SEEKING CONDONATION THEREOF. WHEN, THIS WAS BROUGHT TO THE NOTICE OF THE LEARNED AUTHORISED REPRESENTATIVE HE SUBMITTED THAT THE ASSESSEE DOES NOT WANT TO PRESS IT. IN VIEW OF THE ABOVE THE CROSS OBJECTION IS DISMISSED WITHOUT BEING ADMITTED. 8 . IN THE RESULT, THE DEPARTMENTS APPEAL AND ASSESSEES CROSS OBJECTION ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 01.06.2018 SD/ - SD/ - ( N. K. PRADHAN ) (S A KTIJIT DEY ) / A CCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 01.06.2018 . . ./ ROSHANI , SR. PS 6 ITA NO. 5479/MUM/2016 & CO NO.36/MUM/2018 SHRI HIREN M. DAND / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI