A.C.I.T. CIRCLE 21(1), MUMBAI V. PANKAJ J. PATEL, MUMBAI

ITA 6006/MUM/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5819 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 04-03-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 03-10-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M L PERUMAL
• Assessee Lawyers: V G GINDE
• Keywords: Capital asset; Business income; Depreciation; Business expenditure; Earning of tax free income
• Section: 143(3); 14A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C , BENCH MUMBAI , BEFORE SHRI R.C.SHARMA , A M & DR.STM PAVLAN , J M ITA NO. 6006 / MUM/20 1 2 ( ASSESSMENT YEAR : 200 9 - 10 ) ACIT, CIR - 21(1), BANDRA (E), MUMBAI - 400 051 VS. MR. PANKAJ J. PATEL, DEV NEO VIKRAM SAHAKAR NAGAR, CHS, 2 ND FLOOR, NEW LINK ROAD, ABOVE AUDI SHOWROOM, ANDHERI (WEST), MUMBAI - 400 053 PAN/GIR NO. : A ABPP 2157 L ( APPELLANT ) .. ( RESPONDENT ) /REVENUE BY : MR. M.L.PERUMAL /ASSESSEE BY : MR. V.G.GINDE DATE OF HEARING : 13 TH MARCH , 201 4 DATE OF PRONOUNCEMENT : 28 TH MARCH , 201 4 O R D E R PER R.C.SHARMA ( A .M.) : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) DATED 2 - 7 - 2012 FOR THE ASSESSMENT YEAR 200 9 - 10 , IN THE MATTER OF ORDER PASSED UNDER SECTION 143(3) OF THE I.T. ACT. 2 . THE FIRST GRIEVANCE OF THE REVENUE RELATES TO DELETION OF DISALLOWANCE OF RS. 22,15,061/ - UNDER SECTION 14A READ WITH RULE 8D OF IT ACT. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FACTS IN BRIEF ARE THAT THE ASSESSEE IS ENGAGED IN INVESTME NT IN SHARES AS WELL ITA NO. 6006 /20 1 2 2 AS TRADING IN SHARES AND SECURITIES. DURING THE COURSE OF SCRUTINY ASSESSMENT, THE AO OBSERVED THAT ASSESSEE WAS IN RECEIPT OF EXEMPT INCOME IN THE FORM OF DIVIDEND AND ALSO LONG TERM CAPITAL GAIN IN RESPECT OF INVESTMENT IN SHARES. AC CORDINGLY, HE INVOKED PROVISIONS OF SECTION 14A AND DISALLOWED INTEREST AND OTHER EXPENDITURE OF RS. 22,15,061/ - . 4 . BY THE IMPUGNED ORDER, CIT(A) DELETED THE DISALLOWANCE AFTER OBSERVING AS UNDER : - ONCE THERE IS AN EXEMPT INCOME EITHER IN THE FORM OF DIVIDEND OR LTCG ON QUOTED SHARES, THE EXPENDITURE IN RELATION TO EARNING OF SUCH INCOME WILL BE HIT BY PROVISIONS U/S. 14A. BUT THE DISALLOWANCE U/S 14A R/W RULE 8D CAN BE MADE ONLY IN RESPECT EXPENDITURE WHICH HAS A NEXUS TO THE EXEMPT INCOME. IF THE EXP ENDITURE CLAIMED HAS NO NEXUS DIRECT OR INDIRECT TO THE EXEMPT INCOME THEN THERE CAN BE NO DISALLOWANCE U/S 14A R/W RULE 8D EVEN IF THE ASSESSEE HAS DERIVED EXEMPT INCOME. THIS PRINCIPLE HAS BEEN UPHELD IN CASE OF GODREJ BOYCE MFG. CO LTD (SUPRA) AS RELIED BY APPELLANT ALSO. IN CASE OF APPELLANT, IT IS NOTED FROM THE P&L A/C THAT THE APPELLANT HAS NOT DEBITED ANY DIRECT EXPENDITURE IN RELATION TO THE INCOME IN THE NATURE OF EXEMPT DIVIDEND OR EXEMPT LTCG. IT IS NOTED THAT THE WHATEVER EXPENDITURE INCURRED I N RELATION TO EXPENSES ON SHARES SUCH AS DEMAT CHARGES AND OTHER CHARGES PERTAINING THE SHARES ON WHICH APPELLANT HAS RECEIVED DIVIDEND OR EARNED LTCG, SAME HAS BEEN DEBITED DIRECTLY IN THE CAPITAL ACCOUNT AND NOT IN THE P&L A/C. REGARDING THE INDIRECT EXP ENDITURES DEBITED ,IN THE P&L A/C, IT IS NOTED THAT THE SAME ARE IN NATURE OF INTEREST ON CAR LOAN, CAR INSURANCE, DEPRECIATION ON CAR, AUDIT FEE, PROFESSIONAL FEE, BANK CHARGES AND LEGAL CHARGES WHICH HAVE NO NEXUS TO THE EARNING OF EXEMPT INCOMES. THE INTEREST OF RS.1, 14 093/ - DEBITED IN THE P&L A/C HAS BEEN PAID ON CAR LOAN AND HENCE THERE CAN BE NO QUESTION OF SUCH INTEREST BEING IN RELATION TO EARNING OF ANY EXEMPT DIVIDEND OR LTCG. THE AO HAS NOT SHOWN AS TO HOW THERE WAS NEXUS OF INTEREST ON CAR LO AN TO THE EXEMPT DIVIDEND INCOME. EVEN OTHERWISE THE INTEREST CLAIMED IS ONLY RS. 1,14,093/ - IN P& L A/C AND NOT RS. 5,33,772/ - AS MENTIONED BY THE AO FOR DISALLOWING THE INTEREST U/R 8D(2)(II). THE OTHER EXPENSES DEBITED IN P&L A/ C ARE ALSO IN THE NATURE WHICH DO NOT HAVE PROXIMATE NEXUS TO EARNING OF EXEMPT INCOME NOR THE AO HAS SHOWN IT TO BE SO ON FACTS. THUS IT IS CLEAR THAT NO PART OF THE INTEREST OR ADMINISTRATIVE EXPENDITURE WHICH HAVE BEEN DEBITED IN THE P&L A/ C ARE IN RELATION TO EXEMPT INCOME A ND ALL THE EXPENDITURE PERTAINING TO EXEMPT DIVIDEND OR LTCG HAVE BEEN DEBITED IN THE CAPITAL A/ C ONLY AND NOT IN THE P&L A/ C. HENCE THERE IS NO QUESTION OF ANY DISALLOWANCE IN RESPECT OF INTEREST OR ITA NO. 6006 /20 1 2 3 ADMINISTRATIVE EXPENDITURE. OUT OF THE INDIRECT EXPENDI TURE CLAIMED, DEPRECIATION IS THE MAIN EXPENDITURE BUT THE APPELLANT HAS ITSELF MADE DISALLOWANCE OF DEPRECIATION OF RS.2,20,575/ - IN COMPUTATION WHICH WILL TAKE CARE OF ANY NON - BUSINESS EXPENDITURE AND HENCE NO SEPARATE DISALLOWANCE U/ R 14A IS REQUIRED TO BE MADE ON THIS GROUND ALSO. HENCE DISALLOWANCE OF RS. 22,15,061/- UNDER RULE 8D IS DIRECTED TO BE DELETED. 5 . WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND FROM RECORD THAT THE RELEVANT ASSESSMENT YEAR UNDER CONSIDERATION IS 2009 - 10, THEREFORE, RULE 8D IS APPLICABLE FOR MAKING DISALLOWANCE OF EXPENDITURE INCURRED TOWARDS EARNING OF EXEMPT INCOME. ACCORDINGLY, THE DISALLOWANCE UNDER RULE 8D OF THE I.T. RULES, 1962 WAS WORKED OUT BY THE AO AS UNDER : - A) INTEREST PAID = RS.533772 B) AVERAGE INVES TMENTS = RS.369205737 ((22365851+256400025+17988100) + (15525107+399197681+26934711)/2 C) AVERAGE OF TOTAL ASSETS IN BALANCE SHEET = RS. 534020460 (408976398+659064523) WORKING OF DISALLOWANCE U/S.14A : I EXPENSES DIRECTLY ATTRIBUTABLE TO EXEMPT INCOME NIL II INTEREST NOT DIRECTLY ATTRIBUTABLE TO EXEMPT INCOME (AXB/C) 533772X369205737/ 534020460 RS.3,69,033 III 0.5% OF AVERAGE VALUE OF INVESTMENTS 0.5% OF RS. 369205737 RS.1846028 TOTAL DISALLOWANCE U/S.14A READ WITH RULE 8D OF I.T. RULES RS.22,15,061 AS PER THE OBSERVATION OF CIT(A), THE ASSESSEE HAS DEBITED ONLY INTEREST OF RS. 1,14,093/ - IN THE P& L ACCOUNT ON ACCOUNT OF CAR LOAN. SUCH INTEREST CANNOT BE SAID TO BE INCURRED IN RELATION TO LOAN TAKEN FOR INVESTMENT IN SHARES HAVING EXEMPT INCOME. THEREFORE, NO ITA NO. 6006 /20 1 2 4 DISALLOWANCE ON ACCOUNT OF INTEREST EXPENDITURE WAS WARRANTED. T HE CIT(A) HAS ALSO OBSERVED THAT THE ASSESSEE HIMSELF HAS MADE DISALLOWANCE OF RS. 2,20,575/ - IN COMPUTATION WHICH WILL TAKE CARE OF ANY NON - BUSINESS EXPENDITURE. SO FAR AS DISALLOWANCE OF INTEREST IS CONCERN ED , WE AGREE WITH THE OBSERVATION OF THE CIT(A) TO THE EFFECT THAT SINCE THE INTEREST EXPENDITURE DEBIT ED IN THE P&L ACCOUNT WAS NOT ATTRIBUTABLE TO THE EARNING OF EXEMPT INCOME, THE SAME CANNOT BE DISALLOWED . THE CIT(A) DELETED THE DISALLOWANCE OF OTHER EXPENDITURE BY OBSERVING THAT THERE IS NO CO - RELATION BETWEEN THE EXPENDITUR E SO INCURRED AND THE EXEMPT INCOME EARNED BY THE ASSESSEE. 6 . AFTER CONSIDERING THE ENTIRE MATERIAL PLACED ON RECORD WE ARE OF THE CONSIDERED VIEW THAT DISALLOWANCE UNDER SECTION 14A CAN BE MADE ONLY IF THE ASSESSEE HAS INCURRED EXPENDITURE AGAINST THE EXEMPT INCOME. IF NO EXPENDITURE HAS BEEN CLAIMED, NO DISALLOWANCE CAN BE MADE EVEN AS PER RULE 8D. IN THE INSTANT CASE, WE FOUND THAT TOTAL EXPENDITURE DEBITED BY THE ASSESSEE IN THE P&L ACCOUNT IS RS. 16,28,355/ - . AS PER THE WORKING GIVEN BY THE ASSESSEE BEFORE BENCH, THE ASSESSEE HIMSELF HAS MADE DISALLOWANCE OF 15% OF EXPENDITURE IN RESPECT OF DEPRECIATION, CAR EXPENSES, INTEREST ON CAR LOAN AND CAR INSURANCE. THUS, 15% OF EXPENDITURE WORKS OUT TO BE RS. 2,20,575/ - . AS PER THE ASSESSEE THERE IS ACTUAL CLA IM OF EXPENDITURE OF RS. 14,07,780/ - . HOWEVER, AS PER THE AUDITED P&L ACCOUNT PLACED ON RECORD, WE FOUND THAT ASSESSEE HAS ACTUALLY CLAIMED EXPENDITURE OF RS.16,28,355/ - AND NOT RS. 14,07,780/ - . THEREFORE, IT IS NOT CLEAR AS TO ITA NO. 6006 /20 1 2 5 WHETHER THE ASSESSEE HIMSELF HAS MADE A DISALLOWANCE OF RS. 2,20,575/ - AS THE SAME IS NOT COMING OUT OF THE ORDER OF THE AO NOR IN THE DOCUMENTS PLACED ON RECORD. IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE RESTORE THIS GROUND TO THE FILE OF THE AO WITH A LIMITED EXTENT OF FINDING OUT IF ASSESSEE HIMSELF HAS DISALLOWED A SUM OF RS. 2,20,575/ - . IF THE AO FINDS THAT ASSESSEE HAS MADE DISALLOWANCE OF RS. 2,20,575/ - AND ACTUALLY CLAIMED EXPENDITURE OF RS. 14,07,780/ - , NO FURTHER DISALLOWANCE IS WARRANTED UNDER SECTION 14A. HOWEVER, WE CONFIRM THE ACTION OF THE CIT(A) FOR DELETING THE DISALLOWANCE OF INTEREST OF RS. 3,69,033/ - AS TAKEN BY THE AO WHILE COMPUTING TOTAL DISALLOWANCE UNDER SECTION 14A READ WITH RULE 8D. 7 . IN THE RETURN OF INCOME, THE ASSESSEE HAS DISCLOSED SHORT TERM CAPITAL OF RS. 73,03,168/ - AND LONG TERM CAPITAL GAIN OF RS. 25,60,729/ - . HOWEVER, THE AO DID NOT ACCEPT ASSESSEES CONTENTION REGARDING CAPITAL GAIN AND TREATED THE SAME AS BUSINESS INCOME. BY THE IMPUGNED ORDER THE CIT(A) AFTER APPLYING THE VARIOUS PARAMETERS TO THE CAPITAL GAIN SO EARNED BY THE ASSESSEE HELD THAT PROFIT ON SALE OF SHARES WERE LIABLE TO BE TAXED AS CAPITAL GAIN DEPENDING ON PERIOD OF HOLDING. THE PRECISE OBSERVATION OF THE CIT(A) WAS AS UNDER : - 5.3 I HAVE CONSIDERED THE ARGUMENTS OF THE LD.AR. THE AO IN THE ASSESSMENT ORDER HAS NOT AT ALL ANALYZED THE NUMBER OF TRANSACTIONS, THE FREQUENCY AND THE OTHER RELEVANT FACTORS. THERE IS NO DOUBT THAT ONE CAN SIMULTANEOUSLY HAVE TWO PORTFOLIOS OF TRADER AS WELL AS INVESTOR AS ALSO CLARIFIED IN CBDT CIRCULAR NO 4/2007. FOR DECIDING THE QUESTION WHETHER THE PROFIT FROM SALE OF SHARES IS CAPITAL GAIN OR BUSINESS INCOME, NO SINGLE THUMB RULE CAN BE APPLIED. THE OVERALL EFFECT OF FACTORS LIKE VOLUME AND NUMBER OF TRANSACTIONS, PERIOD OF HOLDING, PERCENTAGE OF NUMB ER OF ITA NO. 6006 /20 1 2 6 TRANSACTIONS AS WELL AS PROFITS IN SHARES HELD FOR SHORTER PERIOD, NUMBER OF TRANSACTIONS WHERE NO DELIVERY OF SHARES WAS TAKEN, REPETITIVE DEALING IN SAME SCRIP, UTILIZATION OF BORROWED FUNDS FOR PURCHASE OF SHARES, EXISTENCE OF SPECULATIVE ACTIVITY , TURNOVER /INVESTMENT RATIO, EXISTENCE OF PROPER BUSINESS ESTABLISHMENT AND INFRASTRUCTURE FOR SHARE ACTIVITY, TREATMENT OF SHARES IN BOOKS OF ACCOUNTS, PAST ASSESSMENTS, EXISTENCE OF LTCG, ETC WILL BE REQUIRED TO BE CONSIDERED TO DETERMINE WHETHER THE AS SESSEE IS INVESTOR OR TRADER. THE MAGNITUDE IS NOT TO BE SEEN IN ABSOLUTE TERMS BUT ONLY IN RELATIVE TERMS I.E IT HAS TO BE SEEN W.R.T THE TOTAL CAPITAL AVAILABLE, PRICE OF SHARES, ETC. THE SMALL OR LARGE PERIOD OF HOLDING SHOULD BE SEEN W.R.T MAJORITY OF SHARES AND NOT W .R. T FEW SHARES WHICH MAY BE HELD FOR VERY SMALL OR VERY LARGE PERIODS . CASES OF EXCEPTIONALLY HIGHER OR LOWER HOLDING PERIOD IN FEW SHARES CAN GIVE A DISTORTED PICTURE. THE INTENTION HAS TO BE SEEN WITH REFERENCE MAJORITY OF TRANSACTIONS ONLY. WHILE ACQUIRING SHARES WITH INTENTION OF APPRECIATION, THE ASSESSEE IS NOT PRECLUDED FROM SELLING SOME SHARES AFTER HOLDING THEM FOR SHORT PERIOD ALSO IF IN HIS OPINION THE HOLDING THOSE SHARES FURTHER MAY RESULT IN FALL M VALUES AS THE SHARE MARKET IS A VOLATILE MARKET WHERE THE PRICES OF ALL SHARES MAY NOT APPRECIATE ON STRAIGHT LINE BASIS JUST BY HOLDING THEM FOR LONGER PERIODS. MERELY BECAUSE THE ASSESSEE HAS EARNED PROFIT BY SELLING IT WITHIN 1 YEAR WILL NOT NECESSARILY MEAN THAT THERE WAS INTEN TION TO EARN .THE PROFIT. IF SUCH PRINCIPLE IS APPLIED, THEN NO PROFIT ON SALE OF SHARES WITH HOLDING PERIOD OF LESS THAN 1 YEAR WOULD QUALIFY THE TAX AS SHORT TERM CAPITAL GAIN. IN THE CASE OF SUGANDH P SHAH 37 DTR 34S(AHD)(TRIB) IT WAS HELD THAT THE SHAR ES HELD FOR LESS THAN 30 DAYS WERE TREATED AS HELD AS STOCK IN TRADE AND THE ONES HELD FOR MORE THAN 30 DAYS WERE TREATED TO BE HELD AS ST CAPITAL ASSET. THE NATURE OF TREATMENT GIVEN IN BOOKS WOULD ALSO BE A GUIDING FACTOR. MOREOVER WHEN THE COURTS AS WEL L AS THE CBDT IN CIRCULAR NO 4/2007, HAVE ALREADY HELD THAT AN ASSESSEE CART BE INVESTOR AS WELL AS TRADER SIMULTANEOUSLY, IT IS CLEAR THAT MERELY THE ASSESSEE WAS TREATED AS TRADER IN ONE YEAR DOES NOT NECESSARILY MEAN THAT HE WOULD CONTINUE TO REMAIN TRA DER FOR ALL THE SUBSEQUENT YEARS IN RESPECT OF THE ALL TRANSACTIONS IN SHARES. THUS THE ACTIVITY OF AN ASSESSEE AMOUNTS TO TRADING OR INVESTMENT CAN CHANGE FROM YEAR TO YEAR DEPENDING UPON VARIOUS OTHER FACTORS SUCH AS VOLUME AND NUMBER OF TRANSACTIONS, PE RIOD OF HOLDING, UTILIZATION OF BORROWED FUNDS, HIGH PERCENTAGE OF NUMBER OF TRANSACTIONS AS WELL AS PROFITS IN SHARES HELD FOR SHORTER PERIOD, TURNOVER/INVESTMENT RATIO, ETC FOR EACH YEAR WHICH WILL DETERMINE WHETHER THE ASSESSEE IS INVESTOR OR TRADER IN THAT PARTICULAR YEAR. IN SHORT, NO SINGLE FACT O R BUT IT IS ONLY THE CUMULATIVE EFFECT OF ALL RELEVANT FACTORS AND CIRCUMSTANCES AS DISCUSSED ABOVE THAT WOULD DETERMINE WHETHER THE NATURE OF TRANSACTION OF THE APPELLANT WAS AS AN INVESTOR OR AS A TRADER IN A PARTICULAR Y EAR? . 5.4 I F THE ABOVE PARAMETERS ARE APPLIED TO THE FACTS OF THE APPELLANT'S CASE THEN IT IS CLEAR THAT THE APPELLANT HAS DONE ONLY 87 TRANSACTIONS OF SALE IN ONLY 35 SCRIPTS WHICH WERE HELD AS INVESTMENTS ONLY. ONLY 87 T RANSACTIONS OF SA LE IN FULL YEAR CANNOT BE SAID TO BE HIGH VOLUME. FURTHER OUT OF 87 TRANSACTIONS, ONLY IN 21 TRANSACTIONS THE HOLDING PERIOD IS LESS THAN 30 DAYS AND IN MORE ITA NO. 6006 /20 1 2 7 THAN 50 TRANSACTIONS THE HOLDING PERIOD IS MORE THAN 90 DAYS. THESE FACTS SHOW THAT THE HOLDING PERIOD IS ALSO LONGER IN MAJORITY OF SHARES. THE APPELLANT HAS EARNED SUBSTANTIAL LTCG ALSO. THE APPELLANT HAS ALSO NOT UTILIZED ANY BORROWED FUNDS FOR THE PURCHASE OF SHARES, HELD AS INVESTMENT AND IN THE BOOKS OF ACCOUNTS THE INVESTMENTS THEY ARE VALUED AT COST ONLY. THE EARNING OF DIVIDEND OF MORE THAN RS. 53 LACS FURTHER SUBSTANTIATES THE INTENTION OF THE APPELLANT TO HOLD SHARES AS INVESTMENT. THUS, NONE OF THE PARAMETERS OF A TRADER EXIST IN THE CASE OF THE APPELLANT IN RESPECT OF SHARES WHICH HAS BEE N HELD AS INVESTMENTS IN BALANCE SHEET. THE AO HAS NOT AT ALL DEALT ANY OF THE RELEVANT FACTORS AND MERELY DRAWN HIS CONCLUSIONS BASED ON FACT THAT IN AY 2003 - 04 & 2004 - 05 THE APPELLANT HAS BEEN HELD TO BE A TRADER BY THE AO. HOWEVER IT IS NOTED THAT IN A. Y. 2003 - 04 & 2004 - 05 ALSO, THE TRIBUNAL ITAT MUMBAI VIDE ORDER IN ITA NO. 5954/MUM/2006 & 3738/MUM/2007 HAS ALSO HELD THE INCOME OF THE APPELLANT FROM SALE OF SHARES AS CAPITAL GAINS AND NOT AS BUSINESS INCOME. FURTHER, IN LIGHT OF THE VARIOUS DECISIONS RE LIED UPON BY THE LD AR AS ABOVE, THE PROFIT HAS TO BE ASSESSED AS CAPITAL GAINS(STCG AND LTCG AS THE CASE MAY BE) IN RESPECT OF THE SHARES HELD AS INVESTMENTS IN BOOKS OF A/ C ON THE FACTS AND CIRCUMSTANCES OF THE CASE OF APPELLANT. ACCORDINGLY, THE LTCG & STCG DECLARED BY THE ASSESSEE IS DIRECTED TO BE TREATED AS CAPITAL GAINS ONLY AND NOT AS BUSINESS INCOME. THE CIT(A) RECORDED THE FINDING TO THE EFFECT THAT ASSESSEE HAS SHOWN ONLY 87 TRANSACTIONS OF SALE IN 35 SCRIPS WHICH WERE HELD AS INVESTMENT AND TH AT 87 TRANSACTIONS OF SALE IN FULL YEAR CANNOT BE SAID TO BE HIGH VOLUME. HE FURTHER FOUND THAT OUT OF 87 TRANSACTIONS, ONLY IN 21 TRANSACTIONS HOLDING PERIOD WAS LESS THAN 30 DAYS AND IN MORE THAN 50 TRANSACTIONS, HOLDING PERIOD WAS MORE THAN 90 DAYS. IT WAS ALSO FOUND THAT ASSESSEE HAS EARNED SUBSTANTIAL LONG TERM CAPITAL GAIN WHICH INDICATE THAT ASSESSEE WAS HOLDING SHARES AS INVESTMENT FOR LESSER PERIOD WHEREIN NO BORROWED FUNDS WERE UTILIZED FOR PURCHASE OF SHARES. ASSESSEE HAD ALSO EARNED DIVIDEND INC OME OF MORE THAN 53 LAKHS AFTER SUBSTANTIATING THE INTEREST OF THE ASSESSEE TO HOLD SHARES AS INVESTMENT. WE FOUND THAT IN THE ASSESSMENT YEARS 2003 - 04 & 2004 - 05, THE ITAT MUMBAI BENCH IN ITA NO. 5954 /MUM/2006 AND ITA ITA NO. 6006 /20 1 2 8 NO. 3738/MUM/2007 HAS ALSO HELD THAT INCOME OF THE ASSESSEE FROM SALE OF SHARES AS CAPITAL GAINS AND NOT AS BUSINESS INCOME. RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE AND ALSO THE FINDING RECORDED BY THE CIT(A) AT PAGE S 28, 29 & 30 OF HIS APPELLATE ORDER, WE D O NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF THE CIT(A) FOR TREATING THE GAIN ON SALE OF SHARES AS CAPITAL GAIN DEPENDING ON PERIOD OF HOLDING . 8 . IN THE RESULT, APPEAL FILED BY THE REVENUE IS ALLOWED IN PART FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28 TH MARCH . 201 4 . 28 TH MARCH ,2014 SD/ - SD/ - ( ) ( S.T.M.PAVLAN ) ( ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 28 / 0 3 /2014 /PKM , PS COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( ASSTT. REGISTRAR) / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A), MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//