ACIT 19(1), MUMBAI V. PURNIMA B PILINJA, MUMBAI

ITA 5734/MUM/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2483 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 18-02-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 12-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C W ANGOLKAR
• Assessee Lawyers: S C TIWARI MS RUTUJA PAWAR
• Keywords: Capital asset; Business income
• Section: 143(3)

Judgement Text

C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO.5734 /MUM/2012 ( / ASSESSMENT YEAR : 2009-10 ACIT, 19(1), R. NO. 322, PIRAMAL CHAMBERS, 3 RD FLOOR, PAREL, MUMBAI- 12. / V. SMT. PURNIMA B. PILINJA, 401, SPRINGLEAF, 12 TH ROAD, KHAR (W), MUMBAI 400 052. ./ PAN :AGAPP6053C ( / APPELLANT ) .. ( / RESPONDENT ) REVENUE BY SHRI C.W. ANGOLKAR (D.R.) R E SPONDENT BY : SH S C TIWARI, MS. RUTUJA PAWAR / DATE OF HEARING : 29.10.2015 / DATE OF PRONOUNCEMENT : 13.11.2015 !' / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER : THIS APPEAL, FILED BY THE REVENUE, BEING ITA NO. 57 34/MUM/2012, IS DIRECTED AGAINST THE ORDER DATED 11 TH JUNE, 2012 PASSED BY THE LD. COMMISSIONER OF INCOME TAX(APPEALS) - 30, MUMBAI,(H EREINAFTER CALLED THE CIT(A)) FOR THE ASSESSMENT YEAR 2009-10 . THE MAIN ISSUE IN THIS APPEAL IS THE TREATMENT BY THE ASSESSING OFFICER OF SHORT TERM CA PITAL GAIN OF RS. 37,73,360/- EARNED BY THE ASSESSEE ON SALE OF SHARE S/MUTUAL FUND AS BUSINESS INCOME WHICH HAS SUBSEQUENTLY HELD BY THE CIT(A) TO BE ASSESSED AS THE SHORT TERM CAPITAL GAIN AS DECLARED BY THE ASSE SSEE IN THE RETURN OF INCOME FILED WITH THE REVENUE. ITA 5734/M/12 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL DERIVING INCOME FROM HOUSE PROPERTY, BUSINESS, CAPITAL GAIN AND INCOME FROM OTHER SOURCES BY WAY OF INTEREST. 3.THE ASSESSEE HAS DECLARED SHORT TERM CAPITAL GAIN IN SHARE TRANSACTIONS AMOUNTING TO RS. 37,73,360/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO SUBMIT THE DETAILS OF SHA RE TRANSACTIONS ALONG WITH COPIES OF BILLS, D-MAT ACCOUNTS ETC. ON VERIFICATIO N OF THE DETAILS FILED BY THE ASSESSEE, THE ASSESSING OFFICER(HEREINAFTER CALLED THE AO) OBSERVED THAT THE ASSESSEE HAS CARRIED OUT PURCHASES AND SALE OF TRAN SACTIONS OF SHARES AND THE ASSESSEE WAS ASKED AS TO WHY THIS ACTIVITY OF THE ASSESSEE IN TRANSACTING IN SHARES BE NOT TREATED AS BUSINESS ACTIVITY. IN RES PONSE THE ASSESSEE STATED VIDE LETTER DATED 2-8-2011, AS UNDER:- ..FURTHER ALTHOUGH THE HOLDINGS PERIOD OF THE ASSESSEE FOR SHARES IS LESS IN HER SHORT TERM CAPITAL GAINS, IT CANNOT BE CLASSIFIED AS BUSINESS ACTIVITY FOR THAT SINGLE REASON. WE ARE E NCLOSING THE COPY OF RECENT JUDGMENT BY ITAT, MUMBAI IN CASE OF HITESH S ATISHCHANDRA DOSHI STATING THAT CAPITAL GAINS EARNED EVEN IF SHA RES ARE HELD FOR LESS THAN 30 DAYS CANNOT BE TREATED AS BUSINESS INCOME. 4. THE A.O. AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE HELD THAT THE TREATMENT GIVEN BY THE ASSESSEE TO THE SHARE TRANSA CTIONS AS CAPITAL IS NOT CONCLUSIVE AND WHETHER DEALING IN SHARES AMOUNTS TO A BUSINESS OR AN INVESTMENT ACTIVITY WILL DEPEND UPON THE PARTICULAR FACTS OF THE CASE. THE A.O. HELD THAT THE ASSESSEE HAS EARNED HUGE INCOME FROM SHARE TRADING ACTIVITY AND THE INCOME EARNED FROM OTHER ACTIVITIE S IS NOMINAL AND THE ASSESSEE HAS INDULGED IN SHARE TRADING ACTIVITY AND NOT AS AN INVESTMENTS. THE A.O. HELD THAT THE ASSESSEE HAS DEVOTED MOST OF HER TIME IN SHARE TRADING WHICH IS CLEAR FROM THE VOLUME OF TRANSACTIONS UNDE RTAKEN BY THE ASSESSEE AND VERY SHORT DAYS OF HOLDING OF THE SHARES WHICH IN SOME CASES WAS FOR 1 ITA 5734/M/12 3 DAY AND SELLING FOR SUBSTANTIAL PROFITS AS PER CHAR T PRODUCED BY THE AO IN THE ASSESSMENT ORDER DATED 30.08.2011 U/S 143(3) OF THE ACT. THUS, THE A.O. TREATED THE SHORT TERM CAPITAL GAIN OF RS. 37,73,36 0/- EARNED BY THE ASSESSEE ON SALE OF SHARES AS BUSINESS INCOME OF THE ASSESSE E INSTEAD OF SHORT TERM CAPITAL GAIN OFFERED FOR TAXATION BY THE ASSESSEE I N THE RETURN OF INCOME FILED WITH REVENUE BY RELYING ON THE FOLLOWING DECISIONS: - 1, PM MOHD MIRA KHAN V. CIT (73 ITR 735 (SC)) 2. KEDARNATH JUTE MANUFACTURING CO. LTD. V.. CIT ( 82 ITR 363 (SC)) 3. JAIPURIA BROS LTD. V. CIT (180 ITR 208 (CAL)) 4. G. VENKATASWAMY NAIDU & CO. (35 ITR 594 (SC)). THE A.O. HELD THAT THE ASSESSEE DEVOTED HER MAJOR P ART OF TIME IN THE STOCK MARKET WHICH REQUIRED CONSIDERABLE TIME AND ATTENTI ON WHICH IS AKIN TO ANY BUSINESS ACTIVITY. 5.AGGRIEVED BY THE DECISION OF THE A.O., THE ASSESS EE CARRIED THE MATTER BEFORE THE CIT(A) AND SUBMITTED THAT THE ASSESSEE IS NOT A SHARE BROKER OR A DEALER AND HAS SHOWN DELIVERY BASED TRANSACTIONS AND NON-D ELIVERY BASED TRANSACTIONS SEPARATELY. THE ASSESSEE SUBMITTED THA T SHE HAS ENTERED INTO DELIVERY BASED TRANSACTION ONLY WITH THE INTENTION OF INVESTMENT TO EARN LONG TERM CAPITAL GAINS AND SHORT TERM CAPITAL GAINS. TH E NON-DELIVERY BASED TRANSACTIONS WHICH WERE SQUARED UP ON THE SAME DAY , THE ASSESSEE SUBMITTED THAT THE PROFIT AND LOSS OF SUCH TRANSACT ION HAS BEEN SHOWN AS SPECULATION PROFIT IN THE RETURN OF INCOME FILED WI TH REVENUE. THE ASSESSEE SUBMITTED THAT THE INTENTION OF THE ASSESSEE ON THE SE DELIVERY BASED TRANSACTIONS ON SHARES / MUTUAL FUNDS IS TO EARN DI VIDEND AND CAPITAL APPRECIATION .THE CAPITAL OF THE ASSESSEE INVESTED IS MUCH MORE THAN THE INVESTMENTS IN SHARES AND MUTUAL FUNDS. THE ASSESSE E HAS INVESTED IN SHARES/MUTUAL FUNDS AND CONSISTENTLY DECLARED THE R ESULTANT CAPITAL ITA 5734/M/12 4 GAIN/LOSS IN THE EARLIER ASSESSMENT YEAR WHICH HAS BEEN ACCEPTED BY THE A.O. AS CAPITAL GAIN. THE ASSESSEE HAS VALUED SHARES AN D MUTUAL FUNDS AT COST BECAUSE IT WAS HER INVESTMENT AND THE SHARES AND MU TUAL FUNDS HELD WERE NOT VALUED AT COST OR MARKET VALUE WHICHEVER IS LES S WHICH IS METHOD OF VALUATION IN CASE OF STOCK IN TRADE HELD FOR BUSINE SS. THE NUMBER OF TRANSACTIONS WERE NOT MANY CONSIDERING TOTAL INVEST MENT AND NUMBER OF COMPANIES WAS ALSO LIMITED AND DETAILED CHART WAS S UBMITTED WHEREBY THE ASSESSEE CONTENDED THAT SOME SHARES SOLD ARE HELD F OR A VERY LONG PERIOD OF TIME. THE ASSESSEE IS NOT MAINTAINING ANY INFRASTR UCTURE AND STAFF LIKE ANALYSTS. THE ASSESSEE SUBMITTED THAT INCOME TAX A CT DOES NOT PRESCRIBE ANY MINIMUM PERIOD OF HOLDING OF SHARES AND MUTUAL FUND S TO BE CATEGORIZED AS SHORT TERM CAPITAL GAIN AND SHARE HELD FOR A PERIOD OF NOT MORE THAN TWELVE MONTHS IMMEDIATELY PRECEDING THE DATE OF TRANSFER S HALL QUALIFY AS SHORT TERM CAPITAL ASSET. IN SUPPORT OF THE CONTENTIONS, THE ASSESSEE RELIED UPON THE FOLLOWING JUDICIAL PRONOUNCEMENTS:- 1. R AJA BAHADUR KAMAKHYA NARAIN SINGH V. CIT 77 ITR 253 (SC) 2. HOLCK LARSEN V. ITO (SC) 160 ITR 67 (SC) 3. JANAK A. RANGWALA V. ACIT (011) SOT 0627 TBOM 4. J.M. SHARE AND STOCK BROKERS LTD. V. CIT 5. GOPAL PUROHIT V JT. CIT (2009) 29 SOT 117 CONFIRM ED BY BOMBAY HIGH COURT 228 CTR 582 (BOM). (SPECIAL LEAVE PETITION AGAINST THE JUDGMENT OF THE BOMBAY HIGH COURT IN CIT V. GOPAL PUROHIT HAS BEEN DISMISSED BY THE H ONBLE SUPREME COURT VIDE ORDER DT. 15.11/2010. 6. SARNATH INFRASTRUCTURE LTD. V. ACIT (2009) 120 TTJ 216 7. HITESH SATISHCHANDRA DOSHI V. JCIT 21(3), 2011 (D2) GLX-3515-TBOM 8. DCIT V. M/S SMK SHARES & STOCK BROKING PVT. LTD. 20 10 (ID2) GLX 865 TBOM. ITA 5734/M/12 5 9. CBDT CIRCULAR NO. A/2007 DT. 15.6.2007 AND INSTRUCT ION NO. 1827 DTD. 31-8-1989. 10. RADHASOAMI SATSANG V CIT (1992) 193 ITR 321 (60 TAX MAN 248)(SC) 11. CIT V BELPAHAR REFRACTORIES LTD. (1981) 128 ITR 610 (6 TAXMAN 382(ORI)) THE ASSESSEE ALSO SUBMITTED THAT THE MOTIVE IN DELI VERY BASED TRANSACTION IS ALWAYS INVESTMENT. THE SHARES ARE TRANSFERRED IN TH E NAME OF THE ASSESSEE. THE SHARES WERE SOLD WHEN IT BECOMES NECESSARY TO S ELL DUE TO MARKET CONDITION AND WHEN THE SHARES HAVE BECOME RIPE FOR REALIZATION OF PROFIT AS THE MARKETS ARE HIGHLY VOLATILE. TO THIS EFFECT, T HE ASSESSEE RELIED UPON THE CBDT CIRCULAR NO. A/2007 DATED 15.6.2007 AND INSTRU CTION NO. 1827 DATED 31.8.1989. THE ASSESSEE SUBMITTED THAT THE REVENUE HAS FRAMED THE ASSESSMENT FOR ASSESSMENT YEAR 2008-09 U/S 143(3) OF THE ACT UNDER SCRUTINY, AND THE A.O. HAS ACCEPTED THE TREATMENT WHICH THE ASSESSEE ADOPTED BY INCLUDING THE INCOME FROM DELIVERY BASED TRANSACTIONS OF SHARES AS CAPITAL GAIN WHILE GAIN/LOSS ON SALE OF NON DEL IVERY BASED SHARES WHICH ARE SQUARED ON THE SAME DAY IS TREATED AS SPECULATIVE P ROFIT/LOSS BY THE ASSESSEE. THE ASSESSEE RELIED ON THE DECISION OF HONBLE SUPR EME COURT IN THE CASE OF RADHASOANI SATSANG (SUPRA) AND PLEADED THAT ON PRI NCIPLES OF CONSISTENCY THE INCOME FROM SALE OF DELIVERY BASED SHARES HELD FOR NOT MORE THAN ONE YEAR BE TREATED AS SHORT TERM CAPITAL GAINS. 6. THE CIT(A) AFTER CONSIDERING THE CONTENTIONS OF THE ASSESSEE HELD THAT THE ASSESSEE HAS SHOWN DELIVERY BASED TRANSACTIONS AND NON-DELIVERY BASED TRANSACTIONS SEPARATELY. THE DELIVERY BASED TRANSAC TION ENTERED INTO BY THE ASSESSEE WERE ONLY WITH THE INTENTION OF INVESTMENT AND TO EARN GAIN AS LONG TERM AND SHORT TERM CAPITAL GAINS. THE NON-DELIVER Y BASED TRANSACTIONS WHICH WERE SQUARED UP ON THE SAME DAY AND THE PROFI TS AND LOSS OF SUCH TRANSACTION HAS BEEN SHOWN AS SPECULATION PROFIT IN THE RETURN OF INCOME FILED ITA 5734/M/12 6 WITH REVENUE. THE ASSESSEE HAS SHOWN INVESTMENTS I N SHARES AND MUTUAL FUNDS AND VALUED THE SHARES AND MUTUAL FUNDS AT COS T BECAUSE IT IS INVESTMENT AND NOT VALUED AT COST OR MARKET VALUE W HICHEVER IS LESS WHICH SHOWS THE INTENTION OF THE ASSESSEE OF NOT TREATING THE SAME AS BUSINESS. DURING THE YEAR UNDER CONSIDERATION, THE NUMBER OF TRANSACTIONS ARE NOT MANY, THE ASSESSEE HAS PURCHASED AND SOLD ONLY 19 S CRIPS. THE CIT(A) ALSO FOUND THAT THE ASSESSEE IS NOT MAINTAINING ANY INFR ASTRUCTURE AND TRAINED ASSISTANT AND IS NOT A REGISTERED DEALER. FOR ASSE SSMENT YEAR 2008-09, THE ASSESSMENTS HAVE BEEN COMPLETED U/S 143(3) OF THE A CT AND THE CAPITAL GAIN SHOWN THEREIN HAS BEEN ACCEPTED AS SUCH BY THE A.O. THE A.O., ON THE OTHER HAND, TREATED THE INCOME FROM THE SALE OF SHARES BE ING SHORT TERM CAPITAL ASSET AS BUSINESS INCOME BASED UPON THE CONTENTION THAT THE PERIOD OF HOLDING IS VERY SHORT. THERE IS NO MATERIAL BROUGH T ON RECORD BY THE A.O. TO JUSTIFY THAT THE ASSESSEE HAS INDULGED IN BUSINESS TRANSACTIONS OF PURCHASE AND SALE OF SHARES SUCH AS EXISTENCE OF LOAN TO PU RCHASE SHARES, REPETITIVE TRANSACTIONS IN THE SHARES, HUGE NUMBER OF TRANSACT IONS FOR PURCHASE AND SALE OF SHARES ETC. UNDER THE PROVISIONS OF THE AC T, WHERE SHARES ARE HELD FOR NOT MORE THAN TWELVE MONTHS IMMEDIATELY PRECEDING T HE DATE OF TRANSFER, THE SAME QUALIFY TO BE ASSESSED AS SHORT TERM CAPITAL A SSETS AND HOLDING OF EVEN ONE DAY MAY RESULT INTO A SHORT TERM CAPITAL ASSET. UNDER THESE CIRCUMSTANCES, THE ASSESSEE CANNOT BE TREATED AS A TRADER IN SHARE TRANSACTIONS. THE ASSESSEE HAS ALSO NOT UTILIZED A NY BORROWED FUNDS, THE SHARES ARE ALSO DELIVERY BASED, THE TRANSACTIONS AR E NOT HUGE, SHOWING THE CLOSING STOCK OF SHARES AT COST, THE ASSESSEE CANNO T BE TREATED AS TRADER IN SHARES. HENCE, THE SHORT TERM CAPITAL GAIN OF RS. 37,73,360/- AS SHOWN BY THE ASSESSEE IN THE RETURN OF INCOME FILED WITH REV ENUE WHICH WAS TREATED BY THE A.O. AS BUSINESS INCOME WAS HELD TO BE SHORT TE RM CAPITAL GAIN AND NOT BUSINESS INCOME. HENCE, THE FINDINGS OF THE A.O. W AS REVERSED BY THE CIT(A) IN THE CASE OF DELIVERY BASED SHARES WHILE THE NON- DELIVERY BASED TRANSACTIONS WOULD CONTINUE TO BE ASSESSED AS SPECULATIVE TRANS ACTIONS. ITA 5734/M/12 7 7. AGGRIEVED BY THE DECISION OF THE CIT(A), THE REV ENUE PREFERRED AN APPEAL BEFORE THE TRIBUNAL. 8. THE LD. D.R. RELIED UPON THE ORDERS OF AUTHORITI ES BELOW AND SUBMITTED THAT THE PERIOD OF HOLDING IS VERY SMALL AND THE SH ARES ARE SOLD WITHIN A SHORT SPAN OF TIME. THE ASSESSEE IS REPETITIVELY DEALING IN THE SHARES THROUGHOUT THE YEAR WHICH HAS A CHARACTER OF BUSINESS INCOME. IN SUPPORT, THE LD. D.R. RELIED UPON THE DECISIONS OF ITAT IN THE FOLLOWING CASES:- 1. SMT. SADHAN NABERA V. ACIT IN ITA NO. 2586/MUM/ 09 2. DCIT V. SHRI VISHAL D. SHAH IN ITA NO. 5381/MUM /09 9. THE ASSESSEE, ON THE OTHER HAND, RELIED UPON THE ORDER OF THE CIT(A) AND REITERATED HER SUBMISSIONS AS MADE BEFORE THE AUTHO RITIES BELOW. THE ASSESSEE SUBMITTED THAT THIS ISSUE IS SQUARELY COVE RED BY THE DECISION OF HONBLE JURISDICTIONAL BOMBAY HIGH COURT IN THE CAS E OF CIT V. GOPAL PUROHIT (2010) 228 CTR 582(BOM.). THE ASSESSEE SUBMITTED T HAT THE ASSESSEE HAS CORRECTLY SHOWN THE INCOME AS CAPITAL GAIN ON THE S ALE OF DELIVERY BASED SHARES. THE SHARES TRANSACTIONS HAVE BEEN DULY REF LECTED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AND HAVE BEEN VALUED AT COS T. THE ASSESSEE HAS BEEN CONSISTENTLY FOLLOWING THIS SYSTEM IN THE CASE OF D ELIVERY BASED SHARES IN THE EARLIER ASSESSMENT YEARS WHICH HAS BEEN ACCEPTED BY REVENUE. IN THE ASSESSMENT COMPLETED U/S 143(3) OF THE ACT FOR THE ASSESSMENT YEAR 2008-09, THE A.O. ACCEPTED THE TREATMENT GIVEN BY THE ASSESS EE IN RESPECT OF CAPITAL GAIN WHEREBY INCOME FROM SALE OF DELIVERY BASED SHA RES ARE CATEGORIZED AS CAPITAL GAINS AND WHILE THE INCOME FROM NON-DELIVER Y BASED SHARES SQUARED ON THE SAME DAY IS TREATED BY THE ASSESSEE AS SPECU LATIVE PROFITS AND OFFERED FOR TAX AS SUCH IN RETURN OF INCOME FILED WITH REVE NUE. THE ASSESSEE ALSO RELIED UPON THE DECISION IN THE CASE OF RADHASOAMI SATSANG V.CIT (SUPRA) AND ITA 5734/M/12 8 SUBMITTED THAT PRINCIPLES OF CONSISTENCY NEED TO BE FOLLOED IN THE CASE OF THE ASSESSEE. 10. WE HAVE CONSIDERED THE RIVAL CONTENTION AND PER USED THE MATERIAL ON RECORD. WE HAVE OBSERVED THAT THE ASSESSEE HAS MA DE INVESTMENT IN SHARES WHICH HAS BEEN SHOWN AS INVESTMENT IN THE BOOKS OF ACCOUNT AND ARE VALUED AT COST WHICH IS NOT CONTROVERTED BY REVENUE. THE ASSESSEE HAS ITS OWN SUFFICIENT CAPITAL IN THE BOOKS AGGREGATING TO RS.1 ,95,20,265/- AS AT 31 ST MARCH 2008 WHILE INVESTMENT IN SHARES /MUTUAL FUNDS IS RS. 35,98,195/- AS AT 31 ST MARCH 2008 , THUS OWN CAPITAL IS MUCH HIGHER THAN HER INVESTMENT IN SHARES/MUTUAL FUNDS. THE ASSESSEE IS REGULARLY FOL LOWING THE SAME METHOD OF ACCOUNTING WHEREBY INCOME FROM SALE OF DELIVERY BAS ED SHARES / MUTUAL FUND IS TREATED AS CAPITAL GAINS WHILE INCOME FROM SALE OF NON-DELIVERY BASED SHARES WHICH ARE SQUARED ON THE SAME DAY IS TREATED BY THE ASSESSEE AS INCOME FROM SPECULATION AND THE REVENUE HAS ACCEPTE D THE SAME IN THE EARLIER ASSESSMENT YEARS AND FOR IMMEDIATELY PRECED ING ASSESSMENT YEAR, THE REVENUE HAS ASSESSED THE ASSESSEE UNDER SCRUTINY U/ S 143(3) OF THE INCOME TAX ACT,1961 READ WITH SECTION 143(2) OF THE ACT AN D ACCEPTED THE DELIVERY BASED GAINS ON SALE OF SHARES AS CAPITAL GAINS VIDE ORDERS DATED 08.11.2010.WE ARE AWARE THAT PRINCIPLES OF RES-JUDI CATA ARE NOT APPLICABLE TO INCOME TAX PROCEEDINGS BUT PRINCIPLES OF CONSISTENC Y HAS TO BE FOLLOWED. WE HAVE OBSERVED THAT THE ASSESSEE IS NOT DEALER IN SH ARES NOR THE ASSESSEE IS HAVING ANY INFRASTRUCTURE AND TRAINED ASSISTANT LIK E ANALYSTS NOR SHE IS A REGISTERED TRADER. DEALING IN SHARES IS NOT REPETIT IVE AND IS ALSO NOT ON VERY LARGE BASIS AS PER DETAILS PLACED AT PAGE 3 OF PAPE R BOOK FILED BY THE ASSESSEE. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V. GOPAL PUROHIT (2010) 228 CTR 582(BOM.) HAS HELD AS UNDER : 2. THE TRIBUNAL HAS ENTERED A PURE FINDING OF FACT THA T THE ASSESSEE WAS ENGAGED IN TWO DIFFERENT TYPES OF TRANSACTIONS. THE FIRST SET OF T RANSACTIONS INVOLVED INVESTMENT IN SHARES. ITA 5734/M/12 9 THE SECOND SET OF TRANSACTIONS INVOLVED DEALING IN SHARES FOR THE PURPOSES OF BUSINESS (DESCRIBED IN PARAGRAPH 8.3 OF THE JUDGMENT OF THE T RIBUNAL AS TRANSACTIONS PURELY OF JOBBING WITHOUT DELIVERY). THE TRIBUNAL HAS CORRECTLY APPLIED THE PRINCIPLE OF LAW IN ACCEPTING THE POSITION THAT IT IS OPEN TO AN ASSESS EE TO MAINTAIN TWO SEPARATE PORTFOLIOS, ONE RELATING TO INVESTMENT IN SHARES AND ANOTHER RELATI NG TO BUSINESS ACTIVITIES INVOLVING DEALING IN SHARES. THE TRIBUNAL HELD THAT THE DELIVERY BASED TRANSACTIONS IN THE PRESENT CASE, SHOULD BE TREATED AS THOSE IN THE NATURE OF INVESTMENT TRAN SACTIONS AND THE PROFIT RECEIVED THEREFROM SHOULD BE TREATED EITHER AS SHORT-TERM OR, AS THE CASE MAY BE, LONG-TERM CAPITAL GAIN, DEPENDING UPON THE PERIOD OF THE HOLDING. A F INDING OF FACT HAS BEEN ARRIVED AT BY THE TRIBUNAL AS REGARDS THE EXISTENCE OF TWO DISTINCT TY PES OF TRANSACTIONS NAMELY, THOSE BY WAY OF INVESTMENT ON ONE HAND AND THOSE FOR THE PURPOSE S OF BUSINESS ON THE OTHER HAND. QUESTION (A) ABOVE, DOES NOT RAISE ANY SUBSTANTIAL Q UESTION OF LAW. 3. INSOFAR AS QUESTION (B ) IS CONCERNED, THE TRIBUNAL HAS OBSERVED IN PARAGRAPH 8.1 OF ITS JUDGMENT THAT THE ASSESSEE HAS FOLLOWED A CONSISTEN T PRACTICE IN REGARD TO THE NATURE OF THE ACTIVITIES, THE MANNER OF KEEPING RECORDS AND THE P RESENTATION OF SHARES AS INVESTMENT AT THE END OF THE YEAR, IN ALL THE YEARS. THE REVENUE SUBM ITTED THAT A DIFFERENT VIEW SHOULD BE TAKEN FOR THE YEAR UNDER CONSIDERATION, SINCE THE PRINCIP LE OF RES JUDICATA IS NOT APPLICABLE TO ASSESSMENT PROCEEDINGS. THE TRIBUNAL CORRECTLY ACCEP TED THE POSITION, THAT THE PRINCIPLE OF RES JUDICATA IS NOT ATTRACTED SINCE EACH ASSESSM ENT YEAR IS SEPARATE IN ITSELF. THE TRIBUNAL HELD THAT THERE OUGHT TO BE UNIFORMITY IN TREATMENT AND CONSISTENCY WHEN THE FACTS AND CIRCUMSTANCES ARE IDENTICAL, PARTICULARLY IN THE CA SE OF THE ASSESSEE. THIS APPROACH OF THE TRIBUNAL CANNOT BE FAULTED. THE REVENUE DID NOT FURNI SH ANY JUSTIFICATION FOR ADOPTING A DIVERGENT APPROACH FOR THE ASSESSMENT YEAR IN QUEST ION. QUESTION (B), THEREFORE, DOES NOT ALSO RAISE ANY SUBSTANTIAL QUESTION. NO CONTRARY DECISION OF HONBLE JURISDICTIONAL HIGH COURT OR OF HONBLE SUPREME COURT IS BROUGHT TO OUR NOTICE BY THE REVEN UE. THE FACTS AND THE CIRCUMSTANCES IN THE CASE OF THE ASSESSEE ARE IDENT ICAL AS IN THE CASE OF GOPAL PUROHIT(SUPRA) AND IN OUR CONSIDERED VIEW , THE AS SESSEE HAS RIGHTLY CLASSIFIED THE INVESTMENT MADE IN SHARES WHEREBY DE LIVERY BASED TRANSACTIONS ARE CATEGORIZED AS INVESTMENT AND INCOME THEREOF IS OFFERED FOR TAXATION AS CAPITAL GAINS WHILE INCOME ARISING FROM NON-DELIVER Y BASED TRANSACTIONS ARE TREATED AS SPECULATIVE INCOME. WE DO NOT FIND ANY INFIRMITY IN THE ORDERS OF THE CIT(A) IN DIRECTING THE A.O. TO TREAT THE INCOM E OF RS. 37,73,360/- AS SHORT TERM CAPITAL GAIN IN THE CASE OF DELIVERY BAS ED TRANSACTION INSTEAD OF BUSINESS INCOME AND ACCORDINGLY , WE CONFIRM THE OR DERS OF THE CIT(A) AND DISMISS THE APPEAL OF REVENUE. WE ORDER ACCORDINGLY . ITA 5734/M/12 10 11. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13TH NOVE MBER 2015. !' # $% &! ' 13 NOV. 2015 ( ) SD/- SD/- (SHAILENDRA KUMAR YADAV) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER $ 8 MUMBAI ; &! DATED 13.11.2015 [ .9../ R.K. R.K. R.K. R.K. , SR. PS ! '#$% &%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. : () / THE CIT(A)-30, MUMBAI 4. : / CIT- CITY -19, MUMBAI 5. =>( 99?@ , ?@ , $ 8 / DR, ITAT, MUMBAI C BENCH 6. (BC D / GUARD FILE. ' / BY ORDER, = 9 //TRUE COPY// (/') * ( DY./ASSTT. REGISTRAR) , $ 8 / ITAT, MUMBAI