ASST CIT 5(2), V. RAJESH D. NANDU, MUMBAI

ITA 5866/MUM/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2625 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 04-06-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 03-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MANISH SANGHAVI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI D BENCH , MUMBAI BEFORE SHRI SHAILEND RA K UMAR YADAV, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR , ACCOUNTANT MEMBER . ITA. NO. 5866 / M UM /20 1 3 (ASSESSMENT YEAR: 2 0 09 - 1 0 ) A SSTT. C OMMISSIONER OF I NCOME - TAX - 25 ( 2 ) , MUMBAI 400 051 APPELLANT VS. SHRI RAJESH D NANDU C - 109, SHAILESH APARTMENT, S.V.P. ROAD, BORIVALI (WEST), MUMBAI - 400 103 RESPONDENT PAN: A ABPN3386R / BY APPELLANT : SHRI VIVEK ANAND OJHA , D.R. / BY RESPONDENT : SHRI MANISH SANGHAVI, A.R. / DATE OF HEARING : 07 . 1 0.2015 / DATE OF PRONOUNCEMENT : 30 . 1 0 .201 5 ORDER PER SHAILEN DRA KUMAR YADAV, J . M: THIS APPEAL HAS BEEN FILED BY REVENU E AGAINST THE ORDER OF COMMISSIONER OF INCOME - TAX (APPEALS) - 35 , MUMBAI , DATED 1 1 . 07 . 20 1 3 FOR A.Y. 200 9 - 1 0 ON FOLLOWING GROUND: I T A NO . 5866 / M UM / 1 3 A.Y. 0 9 - 1 0 [ AC IT VS. SHRI RAJESH D. NANDU ] PA GE 2 1. O N THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE L D. CIT(A) ERRED IN TREATING THE ASSESSEE AS INVESTOR AND ASSESS THE PROFIT ON SALE OF DELIVERY BASED SHARES AS SHORT TERM /LONG TERM CAPITAL GAIN TO THE TUNE OF RS.3,957/ - AND RS.21,06,430/ - RESPECTIVELY DESPITE THE FACT THAT IN A.Y.2008 - 09 THE ASSESSEE HAS ACCEPTED THAT HE IS ENGAGED IN TRADING OF SHARES. 2. ASSESSEE IS AN INDIVIDUAL AND FILED HIS RETURN OF INCOME ON 30.07.2009 DECLARING TOTAL INCOME OF RS.63,83,949/ - IN YEAR UNDER CONSIDERATION. SUBSEQUENTLY, ASSESSING OFFICER SELECTED THE CASE FOR S CRUTINY AND COMPLETED THE ASSESSMENT DETERMINING THE TOTAL INCOME AT RS.84,86,420/ - . MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, WHEREIN VARIOUS CONTENTIONS WERE RAISED ON BEHALF OF ASSESSEE AND HAVING CONSIDERED THE SAME, CIT(A) GRANTED RELI EF TO ASSESSEE. 3 . SAME HAS BEEN OPPOSED ON BEHALF OF REVENUE , INTER ALIA SUBMITTING THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, CIT(A) ERRED IN TREATING THE ASSESSEE AS I NVESTOR AND ASSESS THE PROFIT ON SALE OF DELIVERY BASED SHARES AS SHORT TE RM /LONG TERM CAPITAL GAIN TO THE TUNE OF RS.3,957/ - AND RS.21,06,430/ - RESPECTIVELY DESPITE THE FACT THAT IN A.Y.2008 - 09 ASSESSEE HAS ACCEPTED THAT HE IS ENGAGED IN TRADING OF SHARES. ACCORDINGLY, ORDER OF CIT(A) BE SET ASIDE AND THAT OF ASSESSING OFFICE R BE RESTORED. ON OTHER HAND, LEARNED AUTHORIZED REPRESENTATIVE SUPPORTED THE ORDER OF CIT(A) AND DREW OUR ATTENTION TO ITAT ORDER FOR A.Y. 2006 - 07 IN ASSESSEES OWN CASE, WHEREIN SIMILAR ISSUE HAS BEEN DECIDED IN FAVOUR OF ASSESSEE BY OBSERVING AS UNDER: I T A NO . 5866 / M UM / 1 3 A.Y. 0 9 - 1 0 [ AC IT VS. SHRI RAJESH D. NANDU ] PA GE 3 9. WE HEARD THE PARTIES AND PERUSED THE RECORD. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS TRANSACTED IN 19 SCRIPS WHICH RESULTED IN SHORT TERM CAPITAL GAINS OF RS.33.77 LAKHS. THE LONG TERM CAPITAL GAIN WAS EARNED ON SALE OF ONLY ONE SCRIP NAMED M/S ABHINAV HOME & RESORT LTD. IN THIS YEAR ALSO, THE SINGLE ORDER OF PURCHASE/SALE WAS EXECUTED IN MORE THAN ONE TRANSACTION. THUS, IT IS SEEN THAT THE FACTS PREVAILING IN THIS YEAR IS IDENTICAL TO THAT PREVAILED IN THE IMMEDIATELY PRECEDING YEAR. ACCORDINGLY, BY FOLLOWING OUR DECISION RENDERED IN A.Y.2006 - 07 ABOVE, WE UPHOLD THE ORDER OF LD CIT(A) ON THIS ISSUE. 4 . WE FIND THAT ISSUE IN APPEAL WAS DECIDED IN FAVOUR OF ASSESSEE BY CIT(A) VIDE THEIR ORDERS DATED 27.04.2009 FOR A.Y. 2008 - 09 AND 1 2.02.2010 FOR A.Y. 2009 - 10. IN FACT, CIT(A) HAS FOLLOWED THIS ORDER FOR A.Y. 2006 - 07. HONBLE BOMBAY HIGH COURT IN CASE OF CIT VS. GOPAL PUROHIT IN I NCOME T AX A PPEAL NO.1121 OF 2009 DATED 06.01.2010 , WHEREIN ISSUE WAS WHETHER A PARTICULAR HOLDING OF SHAR ES IS BY WAY OF INVESTMENT OR FORMS PART OF STOCK IN TRADE IS A MATTER WHICH IS WITHIN THE KNOWLEDGE OF ASSESSEE WHO HOLDS THE SHARES. HONBLE HIGH COURT HELD THAT PARTICULAR HOLDING OF SHARES IS BY WAY OF INVESTMENT OR FORMS PART OF STOCK IN TRADE IS A M ATTER WHICH IS WITHIN THE KNOWLEDGE OF ASSESSEE WHO HOLDS THE SHARES IN CASE OF ASSESSEE. SAME HAS BEEN DISCLOSED AT THE TIME OF ACQUISITION OF SHARES THAT SHARES WERE ACQUIRED AS INVESTMENT AND NOT AS TRADING IN SHARES. HENCE, ASSESSING OFFICER SHOULD N OT PRESUME OTHERWISE, MORE PARTICULARLY WHEN NOTHING HAS BEEN BROUGHT ON RECORD BY HIM TO SUBSTANTIATE HIS FINDINGS. THE SHARES PURCHASED BY ASSESSEE ON WHICH CAPITAL GAIN WAS ADMITTED, WERE SHOWN AS INVESTMENT IN BALANCE SHEET AND IN I T A NO . 5866 / M UM / 1 3 A.Y. 0 9 - 1 0 [ AC IT VS. SHRI RAJESH D. NANDU ] PA GE 4 EARLIER YEARS CLAIM OF CAPITAL GAIN HAS BEEN ACCEPTED AND ASSESSEE HAS CONSISTENTLY BEEN FOLLOWING THE METHOD OF ADMITTING THE PROFIT ON SALE OF SHARES SHOWN AS INVESTMENT UNDER THE HEAD CAPITAL GAIN. ASSESSING OFFICER HAS NOT DISPUTED THE FACT THAT ALL THE SHARES WERE TRAN SFERRED IN THE NAME OF ASSESSEE AS EVIDENCED BY DEMAT ACCOUNT AND AS SUCH ALL ARE DELIVERY BASED TRANSACTIONS IN RESPECT OF WHICH ASSESSEE ADMITTED CAPITAL GAIN. IN VIEW OF ABOVE, CIT(A) RIGHTLY DIRECTED THE ASSESSING OFFICER TO TREAT THE ASSESSEE AS INVE STOR AND ASSESS THE PROFIT ON SALE OF DELIVERY BASED SHARES AS SHORT TERM/LONG TERM CAPITAL GAINS AS DECLARED BY ASSESSEE. THIS VIEW IS SUPPORTED BY THE DECISION OF ITAT D BENCH , MUMBAI IN ASSESSEES OWN CASE IN ITA N O .4330/MUM/2009 AND OTHERS FOR A.Y. 2006 - 07 & 2007 - 08 AS DISCUSSED ABOVE. 5 . AS A RESULT, APPEAL FILED BY REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 30TH DAY OF OCTO BER , 201 5 . SD/ - SD/ - ( RAJESH KUMAR ) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI : DATED 30 / 1 0 /2015 S.K.SINHA / COPY OF ORDER FORWARDED TO: - 1 . / REVENUE 2 . / ASSESSEE 3 . / CONCERNED CIT 4 . - / CIT (A)