ITO 3(1)(2), MUMBAI V. MADHURI DOOT, MUMBAI

ITA 5546/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3583 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 02-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K V VISPUTE
• Assessee Lawyers: M SUBRAMANIAN
• Keywords: Business income; Rule of consistency; Earning of tax free income

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL G, BENCH MUM BAI , , , BEFORE SHRI RAJENDRA, AM AND SHRI RAM LAL NEGI, JM ./ ITA NO.5545 & 5546/MUM/2014 ( / ASSESSMENT YEAR: 2009-10 & 2010-11) THE ITO - 3(1)(2), ROOM NO. 666/668-A, 6 TH FLOOR, AAYAKAR BHAVAN, MUMBAI- 400 020. VS. SMT. MADHURI R. DHOOT 4B, 1L, PALAZZO, LITTLE GIBBS ROAD, MALABAR HILL, MUMBAI- 400 006. ./ ./ PAN/GIR NO. : AADPD1056E ( / APPELLANT ) .. ( !' / RESPONDENT ) /REVENUE BY : SHRI. K.V.VISPUTE #$% /ASSESSEE BY : SHRI. M.SUBRAMANIAN & ' ( %) / DATE OF HEARING : 25/08/2016 *+,- ( %) / DATE OF PRONOUNCEMENT : 25/08/2016 !' / O R D E R PER RAM LAL NEGI, JM THESE APPEALS HAVE BEEN PREFERRED BY THE RE VENUE AGAINST COMMON ORDER DATED 04/06/2014 PASSED BY THE LD. CIT(APPEALS)-27, MUMBAI, FOR THE ASST. YEARS 2009-10 & 2010-11. SINCE BOTH THESE APPEALS P ERTAIN TO THE SAME ASSESSEE FOR THE DIFFERENT ASSESSMENT YEARS, THE SA ME WERE CLUBBED AND HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON O RDER FOR THE SAKE OF CONVENIENCE. SINCE THE ISSUES ARE INVOLVED IN BOTH THE APPEALS ARE IDENTICAL. WE TAKE BRIEF FACTS OF THE CASE OF THE ASSESSEE PERTAI N TO THE ASST. YEAR 2009-10 AS LEAD CASE. 2 ITA NO 5545 & 5546/MUM/2014 ASSESSMENT YEAR: 2009-10 & 2010-11 ITA 5545/MUM/14 A.Y. 2009-10 2. THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE A.Y. 2009-10 ON 11/09/2009 DECLARING TOTAL LOSS OF RS. 1,58,62,670/ - AFTER EXCLUDING OF RS. 40,09,901/- AS SHORT TERM CAPITAL LOSS AND RS. 92,9 8,467/- AS LONG TERM CAPITAL GAIN, TREATING THE SAME AS EXEMPT INCOME. THE A.O TREATED THE LONG TERM CAPITAL GAINS AND SHORT TERM CAPITAL LOSS AS I NCOME FROM BUSINESS AND ASSESSED THE TOTAL LOSS AT RS. 62,97,389/-. 3. IN APPEAL THE LD. CIT(A) DIRECTED THE AO TO TREA T THE ENTIRE INCOME FROM SHARE TRANSACTIONS AS INCOME FROM CAPITAL GAIN INST EAD OF BUSINESS INCOME. THE REVENUE HAS CHALLENGED THE IMPUGNED ORDER ON TH E FOLLOWING EFFECTIVE GROUNDS OF APPEAL:- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN DIRECTING THE A.O T O TREAT ENTIRE INCOME FROM SHARE TRANSACTIONS AS INCOME FROM CAPITAL GAIN INSTEAD OF BUSINESS INCOME WITHOUT APPRECIATING THE FACT THAT THE MAGNITUDE OF TRANSACTIONS ARE VOLUMINOUS IN VERY FREQUENT INTERV AL WHICH CLEARLY ESTABLISH THAT THE MOTIVE FOR TRANSACTIONS WAS TO E ARN PROFIT BY PURSUING AN ADVENTURE IN THE NATURE OF TRADE. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION A FTER RELYING ON THE DECISION OF LD. CIT(A) AND HONBLE ITAT IN THE ASSE SSEES OWN CASE FOR A.Y. 2008-09 WITHOUT APPRECIATING THE FACT THA T THE SAID DECISION HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND FILED A PPEAL BEFORE HONBLE HIGH COURT. 3 ITA NO 5545 & 5546/MUM/2014 ASSESSMENT YEAR: 2009-10 & 2010-11 4. AT THE OUTSET THE LD. AUTHORISED REPRESENTATIVE (AR) FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEES CASE IS SQUARELY COVE RED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF MUMBAI ITAT IN ASSESSEE S OWN CASE, ITA NO. 6053/MUM/2011 FOR A.Y. 2008-09. THE LD. DR, ON THE OTHER HAND RELIED ON THE FINDINGS OF THE AO. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RECORD. WE FIND THAT THE IDENTICAL ISSUE HAS BEEN DECIDED IN FAVOUR OF T HE ASSESSEE IN BY THE CO- ORDINATE BENCH IN ASSESSEES OWN CASE ITA NO. 6053/ MUM/2011(SUPRA) FOR THE A.Y. 2008-09. THE RELEVANT PORTION OF ORDER REA DS AS UNDER:- 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT THE HONBLE JURISD ICTIONAL HIGH COURT IN THE CASE OF CIT V. GOPAL PUROHIT [(2011) 336 ITR 287 (BOM.)] HAS EMPHASIZED ON THE PRINCIPLE OF CONSISTENCY. IN THIS CASE THE HONBLE HIGH COURT, DEALING WITH SIMILAR ISSUE, HELD THAT: THERE OUGHT TO BE UNIFORMITY IN TREATMENT AND CONSISTENCY WHEN THE FA CTS AND CIRCUMSTANCES ARE IDENTICAL. AS INCOME FROM SALE O F SHARES HAS BEEN CONSISTENTLY ACCEPTED AS SHORT TERM / LONG TER M CAPITAL GAIN IN PRECEDING YEARS, WE SEE NO REASON FOR OBSERVING DEP ARTURE FOR THE CURRENT YEAR. RESPECTFULLY FOLLOWING THE PRECEDENT, WE UPHOLD THE IMPUGNED ORDER. THESE TWO GROUNDS ARE DISMISSED. 6. SINCE, THE IDENTICAL ISSUE HAS ALREADY BEEN DECI DED IN FAVOUR OF THE ASSESSEE IN AFORESAID CASE, WE, RESPECTFULLY FOLLOWING THE V IEW TAKEN BY THE CO-ORDINATE BENCH UPHOLD THE IMPUGNED ORDER PASSED BY THE LD. C IT(A) AND DISMISSED THE APPEAL FILED BY THE REVENUE. 4 ITA NO 5545 & 5546/MUM/2014 ASSESSMENT YEAR: 2009-10 & 2010-11 ITA 5546/MUM/14 A.Y. 2010-11 1. SINCE THE FACTS AND CIRCUMSTANCES OF THE CASE AR E IDENTICAL TO THE FACTS AND CIRCUMSTANCES OF THE PRESENT APPEAL EXCEPT THE AMOU NT INVOLVED AND SINCE WE HAVE ALLOWED THE IDENTICAL GROUND OF APPEAL OF THE ASSESSEE IN ITA NO. 5545/M/2014 AFORESAID, WE ALLOW THIS GROUND OF APPE AL OF THE ASSESSEE AND DISMISSED THE APPEAL FILED BY THE REVENUE. 2. IN THE RESULT APPEAL FILED BY THE REVENUE FOR TH E A.YS. 2009-10 AND 2010-11 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH AUGUST, 2016 SD/- SD/- ( RAJENDRA ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER & .' MUMBAI; / DATED: 25/08/2016 !' #$%& '&$ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT. 3. & 0% ( ) / THE CIT(A)- 4. & 0% / CIT 5. 34 !%5# , ) 5#- , & .' / DR, ITAT, MUMBAI 6. 6 7' / GUARD FILE. !' / BY ORDER, '3% !% //TRUE COPY// ()*+ (DY./ASSTT. REGISTRAR) , & .' / ITAT, MUMBAI PRAMILA