ACIT 11(3), MUMBAI V. SANDEEP B JAIN, MUMBAI

ITA 6134/MUM/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100797 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 10-08-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 05-09-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI N.K.BILLAIYA, ACCOUNTANT MEMBER ITA NO. 6134 /MUM/20 11 (ASSESSMENT YEAR: 2008 - 09 ) ASST. COMMISSIONER OF INCOME - TAX 11(3), MUMBAI. APPELLANT VS. SHRI SANDEEP B.JAIN, A - 83, SILVER APARTMENT, SHANKAR GHANEKAR MARG, DADAR (W), MUMBAI - 400028. RESPONDENT PAN: AABPJ111J APPELLANT BY : SHRI RAVINDER SINDHU (DR) RESPONDENT BY: NONE. DATE OF HEARING: 1 0/08/2015 DATE OF PRONOUNCEMENT : : 19 /08/2015 O R D E R PER VIJAY PAL RAO, JM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 14/6/2011 OF THE CIT(A) - 2, MUMBAI, FOR THE ASSESSMENT YEAR 2008 - 09. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW. THE LD. CIT(A) ERRED IN TREATING INCOME OF RS 44,55,813/ - EARNED BY TRADING IN SHARES AS INCOME CHARGEABLE UNDER THE HEAD CAPITAL GAIN AND NOT UNDER THE HEAD BUSINESS INCOME.' ITA NO. 6134/MUM/2011 SHRI SANDEEP B JAIN. PAGE 2 OF 5 2. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) FAILED TO APPRECIATE THE SEVERAL FACTS BROUGHT OUT IN THE ASSESSMENT ORDER, WHICH CLEARLY SHOW THAT THE SHARE TRANSACTIONS UNDERTAKEN DID NOT CONSTITUTE INVESTMENT BUT WERE BUSIN ESS TRANSACTIONS CARRIED OUT WITH THE INTENTION OF EARNING PROFITS.' 3. THE APPELLANT PRAYS THAT THE ORDER OF CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. 4. 'THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 3. NONE HAS APPEARED ON BEHALF OF THE ASSESSEE WHEN THIS APPEAL WAS CALLED FOR HEARING. WE NOTE THAT NONE HAD APPEARED ON BEHALF OF THE ASSESSEE ON EARLIER SIX OCCASIONS WHEN THIS APPEAL WAS FIXED FOR HEARING AND ON ALL THESE 6 OCCASIONS, THE APPEAL OF THE REVENUE WAS ADJOURNED ON THE GROUND OF NON - APPEARANCE OF THE ASSESSEE - RESPONDENT WITH THE DIRECTIONS TO ISSUE THE NOTICE. WE FURTHER NOTE THAT DESPITE REPETITIVE NOTICE S ISSUED TO THE ASSESSEE, NONE ON BEHALF OF TH E ASSESSEE APPEARED BEFORE THIS TRIBUNAL TILL DATE. ACCORDINGLY, WE ARE SATISFIED THAT THE ASSESSEE IS NOT INTERESTED IN APPEARING BEFORE THIS TRIBUNAL IN THIS APPEAL OF THE REVENUE. HOWEVER, W E PROPOSE TO HEAR AND DISPOSE OF THIS APPEAL OF THE REVENUE EX - PARTE. 4. THE ONLY ISSUE ARISES IN THE APPEAL OF THE REVENUE IS THE TREATMENT OF THE SHORT TERM CAPITAL GAIN OFFERED BY THE ASSESSEE AS BUSINESS INCOME BY THE AO WHICH WAS REVERSED ITA NO. 6134/MUM/2011 SHRI SANDEEP B JAIN. PAGE 3 OF 5 BY THE CIT(A) BY ACCEPTING THE CLAIM OF THE ASSESSEE AS SHORT TERM CAPITAL GAIN. 5. WE HAVE HEARD THE LEARNED DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE AO HAS NOTED THAT THE ASSESSEE HAS SHOWN SHORT - TERM CAPITAL GAIN OF RS.44,55,813/ - ON SALE OF SHARES. AO FURTHER NOTED THAT THE ASSESSEE HAS SOLD SHARES OF RS.22,46,471/ - AND THE ASSESSEE PURCHASED SHARES OF RS.1,57,75,371/ - DURING THE YEAR. THEREFORE TAKING INTO CONSIDERATION THE MAGNITUDE OF TRANSACTION AS WELL AS NUMBER OF SCRIPS, AO TREATED THE SHORT TERM CAPITAL GAIN AS INCOME FROM BUSINESS AND PROFESSION. AO HAS PLACED RELIANCE ON AS MANY AS 27 DECISIONS INCLUDING THE DECISION OF THE HON'BLE SUP REME COURT AS WELL AS THIS TRIBUNAL. 6. THE A SSESSEE CHALLENGED THE ACTION OF THE AO BEFORE THE CIT(A) AND CONTENDED THAT THE ASSESSEE IS A DOCTOR BY PROFESSION AND FULL TIME SURGEON IN H.N.HOSPITAL AND SAIFEE HOSPITAL. THE ASSESSEE HAS CARRIED OUT THE TRANSACTIONS THROUGH INTERNET TRADING AND THEREFORE THE ASSESSEE IS A REGULAR INVESTOR. THE CIT(A) HAS ACCEPTED THE CLAIM OF THE ASSESSEE AND REVERSED THE FINDING OF THE AO. 7. WE FIND THAT NEITHER THE AO HAS GIVEN FULL DETAILS OF THE TRANSACTI ON I.E. THE NUMBER OF TRANSACTIONS, FREQUENCY OF THE TRANSACTIONS, HOLDING PERIOD FOR EACH AND EVERY TRANSACTION AND IF THERE IS ANY REPETITIVE TRANSACTION IN THE ITA NO. 6134/MUM/2011 SHRI SANDEEP B JAIN. PAGE 4 OF 5 SAME SCRIP OR NOT. BOTH AO AS WELL AS CIT(A) HAS GIVEN MORE EMPHASIS ON THE DECISION RATHER T HAN THE RELEVANT FACTS ON THIS ISSUE. IT IS PERTINENT TO NOTE THAT THE ISSUE OF TREATING THE NATURE OF THE TRANSACTION OF S ALE AND PURCHASE IS MORE OF FACT THAN A LEGAL IN NATURE AND THEREFORE THE ISSUE SHOULD HAVE BEEN DECIDED BY CONSIDERING THE COMPLETE RELEVANT DETAILS AND FACT S SO AS TO DETERMINE THE REAL INTENTION AND MO TIVE OF TRANSACTIONS CARRIED OUT BY THE ASSESSEE. IN THE ABSENCE OF DETAILS RECORDED BY THE AUTHORITIES BELOW AS WELL AS NO DETAILS WERE FURNISHED BY THE PARTIES AND IN ABSENCE OF THE ASSESSEE, IT IS NOT POSSIBLE TO GIVE A CONCLUSIVE FINDING OF FACT ON THIS ISSUE. ACCORDINGLY, WE SET ASIDE THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW AND REMIT THE ISSUE TO THE RECORD OF THE AO FOR FRESH ADJUDICATION AFTER CONSIDERATION AND VERIFICATION OF ALL RELEVANT DETAILS VIZ., THE NUMBER OF TRANSACTIONS, NUMBER OF SCRIPS, HOLDING PERIOD, FREQUENCY, REPETITIVE TRANSACTIONS, IF ANY, AS WELL AS ALL OTHER RELEVANT FACT. NEEDLESS TO SAY THE ASSESSEE BE GIVEN AN OPPORTUNITY OF HEARING BEFORE DECIDING TH E ISSUE AS PER LAW. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 19 TH AUGUST, 2015. S D/ - S D/ - (N.K.BILLAIYA) (VIJAY PAL RAO) ACCOUNANT MEMBER JUDICIAL MEMBER EKSRINIVASULU, SR.PS ITA NO. 6134/MUM/2011 SHRI SANDEEP B JAIN. PAGE 5 OF 5 COPY TO: 1. A PPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, MUMBAI. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE TRIBUNAL MUMBAI