Shri Utpal Kanubhai Patel, Ahmedabad V. The Income Tax Officer, Ward-1(4), Ahmedabad

ITA 605/AHD/2014

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 1789 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 02-04-2020
• Assessment Year: 2008-2009
• Appeal Filed On: 28-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S SHUKLA
• Assessee Lawyers: PF JAIN
• Keywords: Capital asset; Business income; Source of fund; Set aside; Capital Gains
• Section: 45(2); 13; 22

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL , SMC BENCH, AHMEDABAD (CONDUCTED THROUGH VIRTUAL COURT AT AHMEDABAD) BEFORE SHRI WASEEM AHMED , ACCOUNTANT MEMBER AND MS . MADHUMITA ROY , JUDICIAL MEMBER ./ ITA NO. 605/AHD/2014 / ASSTT. YEAR: 2008 - 2009 UTPAL KANUBHAI PATEL , 2, ANAND PARK SOCIETY , NARANPURA GAM BUS STAND , NARANPURA , AHMEDABAD - 380013. PAN : ADSPP7500P VS. THE INCOME TAX OFFICER, WARD - 1(4) AHMEDABAD. (APPLICANT) ( RESPON D ENT ) ASSESSEE BY : SHRI P.F. JAIN , A.R REVENUE BY : SHRI S.S. SHUKLA, SR .D. R / DATE OF HEARING : 07 / 01 / 2021 / DATE OF PRONOUNCEMENT: 22 / 02 /2021 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE A GAINST THE ORDER OF THE LEARNED COMM ISSIONER OF INCOME TAX (APPEALS) - III , AHMEDABAD , DATED 16/12/2013 ARISING IN THE MATTER OF ASSESSM ENT ORDER PASSED UNDER S.143(3) OF THE INCOME TAX ACT, 1961 ( HERE - IN - AFTER REFERRED TO AS 'THE ACT') RELEVANT TO THE ASSESSMENT YEAR 2008 - 20 09 . ITA NO. 605 /AHD/20 14 ASSTT. YEAR 2008 - 09 2 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. T HE LD.C.I.T. (AP PEALS) HAS ERRED IN LAW AND O FACTS IN UPHOLDING THE TAXING THE SUM OF RS.23, 92, 371/ - AS BUSINESS INCOME INSTEAD OF SHORT TERM CAPITAL GAIN AS CLAIMED BY APPELLANT F WITHOUT PROPERLY APPRECIATING THE FACTS AND EVIDENCE. 2. THE LD. C. I .T. (APPEALS) HAS ERRED IN LAW AND ON FACTS IN UPHOLDING THE TAXING THE SUM OF RS.3,38,604/ - AS BUSINESS INCOME INSTEAD OF LONG TERM CAPITAL GAIN CLAIMED AS EXEMPT BY APPELLANT , WITHOUT PROPERLY APPRECIATING THE FACTS AND EVIDENCE. 3. HE HAS ERRED I N LAW AND ON FACTS IN UPHOLDING THE ADDITION OF RS.4,72,OOO/ - ON ACCOUNT OF CONVERSION OF THE SHARES HELD AS CAPITAL ASSETS IN TO STOCK - IN - TRADE WITHOUT PROPERLY APPRECIATING THE FACTS AND EVIDENCE AND BY WRONGLY APPLYING THE PROVISIONS OF SECTION 45(2) OF THE ACT. 4. ON THE FACTS THE RETURN INCOME OF RS. 25,06_,2 20/ - OUGHT TO HAVE BEEN ACCEPTED IN TOTO WITHOUT ANY MODIFICATION. 5. THE APPELLANT CRAVES LEAVE, TO ADD/TO ALTER AND/OR MODIFY ANY GROUNDS OF APPEAL. 3 . THE 1 ST ISSUE RAISED BY THE ASSESSEE IS THAT THE LEARNED CIT (A) ERRED IN CONFIRMING THE ORDER OF THE AO BY TREATING THE INCOME SHOWN UNDER THE HEAD CAPITAL GAIN AS BUSINESS INCOME. 4 . THE FACTS IN BRIEF ARE THAT THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L AND FILED HIS RETURN OF INCOME DECLARING INCOME UNDER THE HEAD SALARY, CAPITAL GAIN AND DIVIDEND . THE ASSESSEE HAS TREATED THE INCOME FROM THE PURCHASE AND SALE OF SHARES AS THE INCOME UNDER THE HEAD CAPITAL GAIN. HOWEVER THE AO FOUND THAT: I. THE ASSESSEE HAS SHOWN PURCHASE S AND SALE OF SHARES OF THE SUBSTANTIAL VALUE I.E. SALE OF THE SHARES OF 119.14 LACS. II. THE ASSESSEE HAS SHOWN STOCK IN TRADE FOR THE INVESTMENT IN SHARES AT 22,30,115/ - AND 1,10,92,590/ - RESPECTIVELY IN THE BALANCE SHEET AS ON 31 ST M ARCH 2007 AND 31 ST MARCH 2008. III. THE ENTIRE ACTIVITY OF THE PURCHASE AND SALE OF SHARES WAS FINANCED OUT OF THE BORROWED FUND. IV. THE AMOUNT OF PROFIT SHOWN BY THE ASSESSEE FROM THE PURCHASE AND SALE OF SHARES CONSTITUTES 88% OF THE ENTIRE INCOME SHOWN BY HIM ( THE ASSESSEE ) IN THE YEAR UNDER CONSIDERATION. SIMILARLY, THE INCOME FROM ITA NO. 605 /AHD/20 14 ASSTT. YEAR 2008 - 09 3 THE PURCHASE AND SALE OF SHARES TO THE TUNE OF 87% WAS ARISING TO HIM (THE ASSESSEE) WITHIN THE PERIOD OF 12 MONTHS. 4 .1 IN VIEW OF THE ABOVE, THE AO TREATED THE INCOME SHOWN BY THE ASSESSEE UNDER THE HEAD CAPITAL GAIN AS THE INCOME FROM THE ACTIVITY OF THE BUSINESS. THUS THE AO DISALLOWED THE EXEMPTION CLAIMED BY THE ASSESSEE FOR 3,38,604/ - BEING LONG - TERM CAPITAL GAIN. 5 . AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LEARNED CIT (A) WHO CONFIRMED THE ORDER OF THE AO BY OBSERVING AS UNDER: 1 1. WHEN THE FACTS OF THIS CASE ARE EXAMINED IN VIEW OF THIS LEGAL POSITION, IT IS FOUND THAT THE MAGNITUDE OF SHARE TRANSACTIONS CARRIED OUT BY APPELLANT IS QUITE SUBSTANTIAL. THE EN - TIRE SOURCE OF FUNDS FOR CARRYING OUT TRANSACTIONS IN SHARES IS BY WAY OF BORROWINGS FROM OTHERS, BECAUSE THE OWN CAPITAL OF APPELLANT WAS ENTIRELY LOCKED UP IN INVESTMENTS. MOREOVER, THE APPELLANT HAS HIMSELF SHOWN SHARES HELD BY HIM AT THE BEGINNING AND AT T HE END OF THE FINANCIAL YEAR AS STOCK - IN - TRADE. THE TRANSACTIONS IN SHARES HAVE BEEN CARRIED OUT CONTINUOUSLY AND REPEATEDLY THROUGHOUT THE YEAR. IT HAS BEEN ALSO POINTED OIIT BY AO THAT APPELLANT HAS DERIVED NEARLY 88% OF ITS INCOME BY WAY OF SALE OF SECU RITIES AND ONLY 12% BY WAY OF DIVIDEND. THIS CLEARLY INDICATES THAT THE MAIN MOTIVE OF APPELLANT WAS EARNING OF PROFIT AND NOT MAKING INVESTMENT FOR EARNING DIVIDEND. IN VIEW OF THESE FACTS, AO HAS RIGHTLY PLACED RELIANCE ON THE DECISIONS OF HON'BLE SUPREM E COURT IN THE CASES OF G VENKATA SWAMI NAIDU & CO., KARAM CHAND THAPAR AND BROTHERS AND RAJABAHADTIR VISHESHWARA SINGH. ON THE OTHER HAND, THE RELIANCE PLACED BY APPELLANT ON DECISIONS OF HON'BLE I TAT, AHMEDABAD BENCH IN THE CASES OF SMT. GARGI PATEL AND SHRI SUGAMCHAND C SHAH IS OF NO HELP, BECAUSE FACTS OF THOSE CASES ARE DIFFERENT. IN VIEW OF DETAILED REASONS GIVEN BY AO IN THE ASSESSMENT ORDER IT CAN BE REASONABLY CONCLUDED THAT APPELLANT HAS TRANSACTED IN SHARES WITH A VIEW TO EARN PROFIT AND NOT FOR EARNING DIVIDEND INCOME. I THEREFORE, HOLD THAT AO HAS RIGHTLY TREATED THE SUM OF RS.27,30,975/ - AS INCOME FROM BUSINESS. THIS ACTION OF AO IS CONFIRMED. GROUNDS 1& 2 OF THE APPEAL ARE THUS DISMISSED. 6 . BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT ( A) THE ASSESSEE IS IN APPEAL BEFORE US. 7 . THE LEARNED AR FOR THE ASSESSEE BEFORE US FILED A PAPER BOOK RUNNING FOR FROM THE PAGES 1 TO 79 AND FURTHER CONTENDED AS UNDER: (1) THE ASSESSEE IS AN INVESTOR AND IS NOT DOING ANY BUSINESS. HIS INVESTMENT IN PREVI OUS YEARS HAS ALSO BEEN ACCEPTED ON SALE AS STCG/ LTCG AND THE COPY OF SCRUTINY ASSESSMENT OF 2007 - 08 ON SIMILAR FACTS HAS BEEN PLACED AT PAPER BOOK PAGE NO. 27 TO 29. HE HAS NOT BORROWED ANY FUNDS FROM ANY EXTERNAL SOURCES BUT THESE ARE FAMILY FUNDS USED FOR INVESTMENT ON WHICH NO INTEREST HAS BEEN PAID AND THE TRANSACTIONS ARE ALSO VERY FEW. ITA NO. 605 /AHD/20 14 ASSTT. YEAR 2008 - 09 4 (2) XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX (3) THE ISSUE OF THE ASSESSEE IS COVERED BY THE SUBSEQUENT CIRCULAR NO.6/2016 DATED 29/02/2016 ISSUED BY THE CBDT WHICH HAS BEEN CONSIDERED BY THE HON BLE ITAT AHMEDABAD A BENCH IN THE CASE OF BHANUPRASAD T. TRIVEDI ITA NO.460/461 & OTHERS ORDER DATED 11/07/ 2016. IT HAS BEEN CONFIRMED BY HON BLE ITAT IN TAX APPEAL NO.676 TO 680 OF 2017 DATED 12/09/2017. 8 . ON THE OTHER HAND THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 9 . W E HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MAT ERIALS AVAILABLE ON RECORD. FROM THE PRECEDING DISCUSSION, WE NOTE THAT THE ACTIVITY OF THE ASSESSEE FOR MAKING THE INVESTMENT IN THE SHARES HAS BEEN TREATED BY THE AO AS BUSINESS ACTIVITY. THUS THE SHORT - TERM AND LONG - TERM CAPITAL GAIN SHOWN BY THE ASSESSEE AMOUNTING TO 23,92,371/ - AND 3,38,604/ - RESPECTIVELY WAS TREATED AS BUSINESS INCOME. THE VIEW TAKEN BY THE AO WAS ALSO SUBSEQUENTLY CONFIRMED BY THE LEARNED CIT (A). 9 .1 ADMITTEDLY, THE ISSUE WHETHER THE ASSESSEE IS CARRYING OUT BUSINESS ACTIVITY FOR THE PURCHASE AND SALE OF SHARES OR IT REPRESENTS THE INVESTMENT ACTIVITY HAD BEEN A CONTENTIOUS ISSUE OVER A PERIOD OF TIME. HOWEVER THE CBDT TO PUT AN END ON THIS ONGOING DISPUTE HAS ISSUED CIRCULARS IN THE YEAR 2007 AS WELL AS IN TH E YEAR 2016 WHICH HAVE A DIRECT BEARING ON THE ISSUE ON HAND. THE CBDT CIRCULAR NO - 04 OF 2007 DATED 15 TH JUNE 2007 READS AS UNDER: 11. ASSESSING OFFICERS ARE ADVISED THAT THE ABOVE PRINCIPLES SHOULD GUIDE THEM IN DETERMINING WHETHER, IN A GIVEN CASE, THE SHARES ARE HELD BY THE ASSESSEE AS INVESTMENT (AND THEREFORE GIVING RISE TO CAPITAL GAINS) OR AS STOCK - IN - TRADE (AND THEREFORE GIVING RISE TO BUSINESS PROFITS). THE ASSESSING OFFICERS ARE FURTHER ADVISED THAT NO SINGLE PRINCIPLE WOULD BE DECISIVE AND THE T OTAL EFFECT OF ALL THE PRINCIPLES SHOULD BE CONSIDERED TO DETERMINE WHETHER, IN A GIVEN CASE, THE SHARES ARE HELD BY THE ASSESSEE AS INVESTMENT OR STOCK - IN - TRADE. ITA NO. 605 /AHD/20 14 ASSTT. YEAR 2008 - 09 5 9 .2 FROM THE ABOVE IT IS TRANSPIRED THAT TO HOLD THE SURPLUS ARISING ON THE SALE AND P URCHASE OF THE SHARES/ SECURITIES AS CAPITAL GAIN , THE INVESTMENT IN SHARES / INVESTMENTS SHOULD BE ACCOUNTED AS INVESTMENT AND NOT STOCK IN TRADE IN THE BOOKS OF THE ASSESSEE . O N PERUSAL OF THE BALANCE SHEET OF THE ASSESSEE FOR THE YEAR ENDING 31 MARCH 2008 AS WELL AS 31 ST MARCH 2007 AND 31 ST MARCH 2006 WHICH ARE PLACED ON PAGES 12, 41 AND 54 OF THE PAPER BOOK RESPECTIVELY, WE NOTE THAT THE ASSESSEE HAS SHOWN INVESTMENT IN SHARES IN THE BALANCE SHEET. THUS IT CAN BE CONCLUDED THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF INVESTMENT IN SHARES QUA THE CAPITAL GAIN. 9 .3 SIMILARLY, WE ALSO NOTE THAT T HE CBDT IN ITS CIRCULAR BEARING NO. 6/2016 DATED 29 - 02 - 2016 HAS A LSO OBSERVED AS UNDER: THE ASSESSING OFFICERS IN HOLDING WHETHER THE SURPLUS GENERATED FROM SALE OF LISTED SHARES OF OTHER SECURITIES WOULD BE TREATED AS CAPITAL GAIN OR BUSINESS INCOME, SHALL TAKE INTO ACCOUNT THE FOLLOWING. A) WHERE THE ASSESSEE ITSELF, IRRESPECTIVE OF THE PERIOD OF HOLDING THE LISTED SHARES AND SECURITIES, OPTS TO TREAT THEM AS STOCK - IN - TRADE, THE INCOME ARISING FROM TRANSFER OF SUCH SHARES/SECURITIES WOULD BE TREATED AS ITS BUSINESS INCOME. B) IN RESPECT OF LISTED SHARES AND SECURITIES HELD FOR A PERIOD OF MORE THAN 12 MONTHS IMMEDIATELY PRECEDING THE DATE OF ITS TRANSFER, IF THE ASSESSEE DESIRES TO TREAT THE INCOME ARISING FROM THE TRANSFER THEREOF AS CAPITAL GAIN, THE SAME SHALL NOT BE PUT TO DISPUTE BY THE ASSESSING OFFICER. HOWEVER, THIS STAND, ONCE TAKEN BY THE ASSESSEE IN A PARTICULAR ASSESSMENT YEAR, SHALL REMAIN APPLICABLE IN SUBSEQUENT ASSESSMENT YEARS ALSO AND THE TAXPAYERS SHALL NOT BE ALLOWED TO ADOPT A DIFFERENT/CONTRARY STAND IN THIS REGARD IN SUBSEQUENT YEARS. C) IN ALL OTHER CASES, THE NATURE OF TRANSACTION (I.E WHETHER THE SAME IS IN THE NATURE OF CAPITAL GAIN OR BUSIN ESS INCOME) SHALL CONTINUE TO BE DECIDED KEEPING IN VIEW THE AFORE SAID CIRCULARS ISSUED BY THE CBDT. 9 .4 FROM THE ABOVE, IT IS TRANSPIRED THAT ONCE THE ASSESSEE HAS SHOWN LISTED SHARES AND SECURITIES WHICH WERE HELD FOR MORE THAN 12 MONTHS IMMEDIATELY PRECEDING THE DATE OF TRANSFER AS INVESTMENTS, THE ASSESSEE CAN TREAT THEM AS LONG - TERM CAPITAL GAIN PROVIDED THE ASSESSEE MAINTAINS CONSISTENCY. ADMITTEDLY, THE ASSESSEE IN THE EARLIER YEARS HAS ALSO SHOWN LONG - TERM CAPITAL GAIN WITH RESPECT TO SALE AND PURCHASE OF THE SHARES WHICH CAN BE VERIFIED FROM THE COMP UTATION OF ITA NO. 605 /AHD/20 14 ASSTT. YEAR 2008 - 09 6 INCOME OF THE ASSESSEE FOR THE ASSESSMENT YEARS 2007 - 08 AND 2006 - 07 WHICH ARE PLACED ON PAGES 32 TO 33 AND PAGE 50 OF THE PAPER BOOK. 9 .5 IN ADDITION TO THE ABOVE, WE ALSO NOTE THAT THE ASSESSEE HAS BEEN SHOWING CONSISTENTLY THE SHORT - TERM/LONG - TERM CAPITAL GAIN ARISING TO HIM ON THE PURCHASE A ND SALE OF SHARES WHICH WERE ALSO ACCEPTED BY THE REVENUE. ACCORDINGLY WE ARE OF THE VIEW THE PRINCIPLES OF CONSISTENCY SHOULD BE APPLIED AS THERE WAS NO CHANGE IN THE FACTS AND CIRCUMSTANCES VIZ A VIZ IN THE PROVISIONS OF LAW. 9 .6 IT IS ALSO IMPORTANT T O NOTE THAT THE QUANTUM/VOLUME OF THE SALE & PURCHASE OF THE SHARES, INVESTMENT OUT OF THE BORROWED FUND AND THE QUANTUM OF PROFIT CANNOT BE A CRITERIA TO HOLD THAT THE ASSESSEE IS CARRYING OUT BUSINESS ACTIVITIES FOR THE PURCHASE AND SALE OF THE SHARES. 9 .7 BEFORE PARTING, WE ALSO NOTE THAT THE JUDGMENTS REFERRED BY THE AUTHORITIES BELOW OF THE HON BLE COURTS WERE MADE PRIOR TO THE ISSUE OF THE CBDT CIRCULARS AS DISCUSSED ABOVE. THEREFORE, IN OUR HUMBLE UNDERSTANDING, THESE JUDGMENTS CANNOT BE REFERRED F OR DECIDING THE ISSUE ON HAND. ACCORDINGLY, WE SET ASIDE THE FINDING OF THE LEARNED CIT (A) AND DIRECT THE AO TO TREAT THE ACTIVIT Y OF THE SALE AND PURCHASE OF SHARES AS INVESTMENT ACTIVIT Y INSTEAD OF BUSINESS ACTIVIT Y . HENCE, THE GROUND OF APPEAL OF THE A SSESSEE IS ALLOWED. 10 . THE 2 ND ISSUE RAISED BY THE ASSESSEE IS THAT THE LEARNED CIT (A) ERRED IN CONFIRMING THE ORDER OF THE AO BY SUSTAINING THE ADDITION OF 4,72,000/ - ON ACCOUNT OF CONVERSION OF SHARES HELD AS CAPITAL ASSET INTO STOCK IN TRADE. 1 1 . THE AO DURING THE ASSESSMENT PROCEEDINGS FOUND THAT THE ASSESSEE HAS CONVERTED H IS INVESTMENT IN SHARES, SHOWN AS OPENING STOCK AT 22,30,115/ - AS STOCK IN TRADE IN THE YEAR UNDER CONSIDERATION WHICH IS A TRANSFER UNDER THE PROVISIONS OF SECTION 45(2) OF THE ACT. ACCORDINGLY THE AO WORKED OUT THE CAPITAL GAIN OF 4,72,000/ - AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. ITA NO. 605 /AHD/20 14 ASSTT. YEAR 2008 - 09 7 12 . AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LEARNED CIT (A) WHO CONFIRMED THE ORDER OF THE AO BY OBSERVING AS UNDER: 15. AS OBSE RVED BY AO IN THE ASSESSMENT ORDER, APPELLANT HIMSELF HAS SHOWN OPENING STOCK OF SHAR E S AT RS.22,30,115/ - WHICH WAS SHOWN AS INVESTMENT IN THE IMMEDIATELY PRECEDING YEAR. THEREFORE, AO HAS RIGHTLY CONCLUDED THAT APPELLANT HAS CONVERTED HIS CAPITAL ASSET IN TO STOCK - IN - TRADE AND THEREFORE PROVISIONS OF SECTION 45(2) ARE APPLICABLE. THE ADDITION OF RS.4,72,000/ - IS JUSTIFIED IN SUCH A SITUATION AND THE SAME IS CONFIRMED. GROUND NO.3 OF THE APPEAL IS THUS DISMISSED. 13 . BEING AGGRIEVED BY THE ORDER OF THE LEAR NED CIT (A) THE ASSESSEE IS IN APPEAL BEFORE US. 14 . THE LEARNED AR BEFORE US CONTENDED THAT THERE WAS NO CONVERSION OF CAPITAL ASSETS BEING SHARES AND SECURITIES INTO STOCK AND TRADE. 15 . ON THE OTHER HAND THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 16 . WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE PRECEDING DISCUSSION, IT WAS ALLEGED BY THE AUTHORITIES BELOW THAT THE ASSESSEE HAS CONVERTED INVESTMENT IN SHARES, SHOWN IN THE BALANCE SHEET AS ON 31 ST MARCH 2007, AS OPENING STOCK IN ITS PROFIT AND LOSS ACCOUNT AMOUNTING TO 22,30,115/ - WHICH IS A TRANSFER WITHIN THE MEANING OF THE PROVISIONS OF SECTION 45(2) OF THE ACT. HOWEVER , THE ASSESSEE ON SUCH CONV ERSI ON OF INVESTMENTS INTO STOCK IN TRADE HAS NOT SHOWN ANY INCOME UNDER THE HEAD CAPITAL GAIN. ACCORDINGLY THE AO WORKED OUT THE CAPITAL GAIN OF 4,72,000/ - AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. THE VIEW TAKEN BY THE AO WAS SUBSEQUENTLY CONFIRMED BY THE LEARNED CIT (A). 16 .1 AT THE THRESHOLD, WE NOTE THAT THE ASSESSEE IN ITS PROFIT AND LOSS ACCOUNT HAS NOT SHOWN ANY OPENING STOCK OF THE SHARES AMOUNTING TO 22,30,115/ - AS ALLEGED BY THE AUTHORITIES BELOW. THE COPY OF THE PROFIT AND LOSS ACCOUNT IS P LACED ON PAGE ITA NO. 605 /AHD/20 14 ASSTT. YEAR 2008 - 09 8 5 OF THE PAPER BOOK. THUS WE NOTE THAT THERE WAS NO CONVERSION OF THE INVESTMENT INTO STOCK IN TRADE AS ALLEGED BY THE AUTHORITIES BELOW AND ACCORDINGLY THE QUESTION OF ATTRACTING THE PROVISIONS OF SECTION 45(2) DOES NOT ARISE. 16 .2 AT T HE TIME OF HEARING, THE LEARNED DR HAS NOT BROUGHT ANYTHING ON RECORD TO SUPPORT THE FINDINGS OF THE AUTHORITIES BELOW. ACCORDINGLY, WE DO NOT FIND ANY REASON TO UPHOLD THE FINDINGS OF THE LEARNED CIT (A) AND CONSEQUENTLY, WE SET ASIDE THE SAME. THE AO IS DIR ECTED TO DELETE THE ADDITION MADE BY HIM FOR 4,72,000/ - UNDER THE PROVISIONS OF SECTION 45(2) OF THE ACT . HENCE THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 17 . IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. O RDER PRONOUNCED IN THE COU RT ON 22 /02 / 2021 AT AHMEDABAD. SD/ - SD/ - (MADHUMITA ROY ) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER (TRUE COPY) A HMEDABAD; DATED 22 / 02 /2021 M ANISH