DCIT, Chandigarh V. Sh. Devi Parsad Khandelia, Chandigarh

ITA 620/CHANDI/2014

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9795 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 20-07-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 12-06-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA NO. 620/CHD/2014 (ASSESSMENT YEAR : 2008-09) THE D.C.I.T., VS. SH.DEVI PARSAD KHANDELIA CIRCLE (1), H.NO.23, INDL. AREA, PHASE-II, CHANDIGARH. CHANDIGARH. PAN: AAHPK9515B (APPELLANT) (RESPONDENT) APPELLANT BY : SMT.RAJINDER KAUR, DR RESPONDENT BY : SHRI ANIL KHANNA DATE OF HEARING : 20.07.2015 DATE OF PRONOUNCEMENT 22.07.2015 O R D E R PER BHAVNESH SAINI, J.M. : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS), CHANDIGARH DATED 27.3.2014 FOR ASSESSMEN T YEAR 2008-09. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASS ESSEE HAD SHORT TERM CAPITAL GAIN OF RS.26,20,386/-. TH E ASSESSING OFFICER OBTAINED THE DETAILS OF TRANSACTION MADE BY THE ASSESSEE AND FORMED HIS VIEW THAT THE TRANSACTIONS MADE BY 2 THE ASSESSEE WERE IN THE NATURE OF TRADING IN SHARE S AND THE INCOME EARNED COULD NOT BE TREATED AS SHORT TERM CA PITAL GAIN. HE ACCORDINGLY, ASSESSED THE ENTIRE AMOUNT OF RS.26 ,20,386/- AS BUSINESS INCOME OF THE ASSESSEE. 3. THE ASSESSEE CHALLENGED THE ADDITION BEFORE TH E LEARNED CIT (APPEALS) AND FILED WRITTEN SUBMISSION. THE CIT (APPEALS) CONSIDERING THE WRITTEN SUBMISSION OF THE ASSESSEE ALLOWED THE APPEAL OF THE ASSESSEE PARTLY TREATING AN AMOUNT OF RS.2,65,574/- AS BUSINESS INCOME AND DIRECTED TH E ASSESSING OFFICER ACCORDINGLY. HIS FINDING IN PAR A 5 OF THE APPELLATE ORDER READS AS UNDER : 5. 1 HAVE CONSIDERED THE FACTS OF THE CASE. A PERUSAL OF DETAILS OF SHARE TRADING, SUBMITTED BY THE APP ELLANT REVEALS THAT THE APPELLANT HAD INDULGED INTO TR ADING OF SHARES ONLY ON 46 DAYS DURING THE YEAR. OUT OF TOTAL CAPITAL GAIN, CAPITAL GAIN OF ONLY RS. 2,65,574/- (10 %) PERTAINS TO DAY TRADING I.E. SHARES PURCHASED AND SO LD ON THE SAME DAY, WHEREAS RS. 5,22,047/- (20%) PERTA INS TO SHARES HELD FROM 1 TO 90 DAYS AND REST OF IT PER TAINS TO SHARES HELD FOR MORE THAN 90 DAYS. THUS, FROM THE OVERALL TREND AND FREQUENCY OF TRANSACTIONS OF TRAD ING IN SHARES, IT CANNOT BE SAID THAT THE APPELLANT WAS AC TIVELY ENGAGED IN TRADING OF SHARES. IN FACT, PROFIT EARNED ON SHARES SOLD ON THE SAME DAY CAN BE TREATED AS BUSIN ESS PROFITS AND THE INCOME ON ACCOUNT OF SHARES SOLD AF TER BEING HELD EVEN FOR A DAY IS TO BE TAXED AS SHORT T ERM CAPITAL GAIN. THEREFORE, OUT OF THE TOTAL SHORT TE RM CAPITAL GAIN DECLARED BY THE APPELLANT, AMOUNT OF ONLY RS. 2,65,574/- RELATING TO SHARES SOLD ON THE SAME DAY, IS TO BE TAXED AS BUSINESS INCOME. THE ASSESSING OFFICER IS DI RECTED ACCORDINGLY. GROUNDS OF APPEAL TAKEN BY THE APPELL ANT ARE PARTLY ALLOWED. 3 4. AFTER HEARING THE RIVAL CONTENTIONS, WE ARE OF THE VIEW THAT THE MATTER REQUIRES RE-CONSIDERATION AT T HE LEVEL OF THE LEARNED CIT (APPEALS). THE ASSESSING OFFICER T REATED THE TRANSACTIONS OF THE ASSESSEE DECLARING SHORT TERM C APITAL GAIN IN THE NATURE OF TRADING IN SHARES. ACCORDING TO THE LEARNED COUNSEL FOR THE ASSESSEE, CERTAIN DETAILS WERE FILE D BEFORE THE LEARNED CIT (APPEALS) SHOWING THAT THE ASSESSEE MAD E INVESTMENT IN THE SHARES BUT NO DETAILS HAVE BEEN N OTED AND CONSIDERED IN THE IMPUGNED ORDER. THE LEARNED CIT (APPEALS) CONSIDERED THE FREQUENCY OF THE TRANSACTIONS FOR DA YS I.E. FOR 1 TO 90 DAYS OR MORE FOR THE PURPOSE OF CONSIDERING WHETHER IT WAS A BUSINESS INCOME OR CAPITAL GAINS. HE HAS CON SIDERED A DAY TRANSACTION TO BE BUSINESS. HOWEVER, LAW DOES NOT PROVIDE SUCH PERIOD AS HAVE BEEN ADOPTED BY THE LEA RNED CIT (APPEALS) FOR THE PURPOSE OF CONSIDERING THE TRANSA CTIONS TO BE SHORT TERM CAPITAL GAIN OR BUSINESS. THE INTENTION OF THE ASSESSEE SHALL HAVE TO BE CONSIDERED ALONGWITH ATTE NDING FACTS, HISTORY OF ASSESSEE, FREQUENCY OF TRANSACTIO NS WHILE DEALING IN SHARES FOR THE PURPOSE OF CONSIDERING WH ETHER IT WAS TRADING IN SHARES OR INVESTMENT IN SHARE FOR TH E PURPOSE OF CAPITAL GAINS. THE LEARNED CIT (APPEALS) DID N OT DISCUSS ANYTHING IN THE ORDER FOR THE PURPOSE OF GRANTING S UBSTANTIAL RELIEF TO THE ASSESSEE. THE MATTER, THEREFORE, REQ UIRES RE- CONSIDERATION AT HIS LEVEL. WE ACCORDINGLY, SET A SIDE THE ORDER OF THE LEARNED CIT (APPEALS) AND RESTORE THIS ISSUE TO HIS FILE WITH DIRECTION TO REDECIDE THIS ISSUE IN THE L IGHT OF THE 4 MATERIAL ON RECORD AND STRICTLY IN ACCORDANCE WITH LAW BY GIVING REASONABLE SUFFICIENT OPPORTUNITY OF BEING H EARD TO THE ASSESSEE. THE LEARNED CIT (APPEALS) SHALL PASS RE ASONED ORDER GIVING COMPLETE DETAILS IN THE APPELLATE ORDE R. 4. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 22 ND DAY OF JULY, 2015. SD/- SD/- (T.R.SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 22 ND JULY, 2015 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH