MONICA BIMAL SHAH, MUMBAI V. ADDL CIT RG 22(1), MUMBAI

ITA 6987/MUM/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93294 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 9 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 08-07-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 08-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASGHAR ZAIN V P SR
• Keywords: Capital asset; Business income; Rule of consistency; Earning of tax free income
• Section: 143(3); 14A

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI B BENCH , , , BEFORE S/SH. JOGINDER SINGH,JUDICIAL MEMBER & RAJENDRA,ACCOUNTANT MEMBER /. ITA NO. 6406 /MUM/201 0 , / ASSESSMENT YEAR - 200 7 - 08 ACIT - RANGE - 22(1) 4 TH FLOOR, TOWER - 6, VASHI RAILWAY STATION BUILDING VASHINAVI MUMBAI - 400 703. VS SMT. MONICA B. SHAH 1401 F, KUKREJA PALACE VALLABH BAUG LANE EXTN. GHATKOPAR(E)MUMBAI - 400 077. PAN: AAQPS 4225 F ( / APPELLANT ) ( / RESPONDENT ) /. ITA NO. 6987 /MUM/201 0 , / AS SESSMENT YEAR - 200 7 - 08 SMT. MONICA B. SHAH MUMBAI.. VS ACIT - RANGE - 22(1) NAVI MUMBAI ( / APPELLANT ) ( / RESPONDENT ) /ASSESSEE BY : SHRI SATISH MODY / REVENUE BY :SHRI ASGHAR ZAIN V.P. SR.AR / DATE OF HEARING : 08 - 07 - 2015 / DATE OF PRONOUNCEMENT : 22 - 07 - 2015 , 1961 254 ( 1 ) ORDER U/S.254(1)OF THE INCOME - TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDER DATED 26.6.2010 OF THE CIT(A) - 33 , MUMBAI ,THE AS SESSING OFFICER(AO) AND THE ASSESSEE HAVE FILED CROSS APPEALS RAISING VARIOUS GROUNDS OF APPEAL: ITA NO.6406/MUM/2010 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) HAS ERRED IN GIVING DIRECTION THAT INCOME FROM HOUSE PROPERTY SH ALL BE COMPUTED ON THE BASIS OF STANDARD RENT / MUNICIPAL VALUE WHERE AS BOTH THE PROPERTIES AT GHATKOPAR, MUMBAI AND DEOLALI, NASIK ARE NOT GOVERNED BY RENT CONTROL ACT AND NO STANDARD RENT HAS BEEN FIXED FOR THESE PROPERTIES BY ANY CONTROLLER. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) ERRED IN GIVING DIRECTION THAT WHEREVER ASSESSEE HAS HELD SHARES FOR MORE THAN ONE MONTH THAT MAY BE TREATED AS SHORT TERM CAPITAL GAIN AND IF THE HOLDING PERIOD IS LESS THAN ONE MONTH THEN IT SHOULD BE TREATED AS BUSINESS INCOME. THE DIRECTION GIVEN IS CONTRARY TO LAW, THEREFORE, ORDER OF CIT(A) MAY BE SET ASIDE AND ORDER OF A.O. BE RESTORED. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) ERRED IN DELETING PROPORTIONAT E EXPENSES OF RS.8,16,667/ - OUT OF TOTAL EXPENSES OF RS.11, 12,377/ - AS ASSESSEE HAS CLAIMED ALL EXPENSES AGAINST SHORT TERM CAPITAL GAIN ONLY AND NOT A SINGLE RUPEE WAS ATTRIBUTED TO LONG TERM CAPITAL GAIN WHICH IS CLAIMED EXEMPT U/S.1 0(38) OF THE ACT. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) ERRED IN GIVING DIRECTION TO RE - EXAMINE AND COMPUTE 14A DISALLOWANCE WITHOUT APPRECIATING THE FACTS THAT THE DISALLOWANCE ITA/ 6406 /MUM/20 10 ,AY. 07 - 08 - MONICA 2 WAS COMPUTED AS PER THE PROVISIONS OF SECTION 14A R.W. RULE 8D AND THEREFORE, IT IS PRAYED THAT THE ORDER OF CIT(A) MAY BE SET ASIDE AND ORDER OF A.O. BE RESTORED. 5. THE APPELLANT PRAYS THAT, THE ORDER OF THE CIT(A) ON THE ABOVE GROUND BE REVERSED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 6. THE APPELLANT CRA VES LEAVE TO AMEND OR ALTER ANY GROUNDS OR ADD A NEW GROUND, WHICH MAY BE NECESSARY. ITA NO.6987/MUM/2010 1. A. THE LEARNED CIT (A) ERRED ON FACTS AND IN LAW IN NOT ACCEPTING THE DECISION OF THE HON. ITAT IN THE CASE OF GOPAL PUROHIT VS. JCIT WHICH WAS ACCEPTED BY HER IN A.Y.06 - 07 . B. THE LEARNED CIT (A) ERRED ON FACTS AND IN LAW IN TREATING THE SHARES WHICH ARE HELD UPTO ONE MONTH AS PROFITS FROM BUSINESS INSTEAD OF SHORT TERM CAPITAL GAINS. 2. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND ANY WORD, PHRASE, SENTENCE, CLAUSE AND / OR ANY OF THE GROUNDS OF APPEAL. 2. ASSESSEE,AN INDIVIDUAL,FILED HER RETURN ON 13.11.2007,DECLARING INCOME OF RS.87.33 LAKHS.THE AO COMPLETED THE ASSESSMENT ON U/S.143(3)OF THE ACT ON 29.12.2009,DETERMINING HER INCOME AT RS.1.03 CRORES. 2.1. FIRST GROUND OF APPEAL IS ABOUT INCOME FORM HOUSE PROPERTY.DUR ING THE ASSESSMENT PROCEEDINGS, THE AO FOUND THAT FROM SCHEDULE D OF THE BALANCE SHEET THAT SHE WAS HAVING FIVE IMMOVABLE PROPERTIES.HE ASKED THE ASSESSEE AS TO WHY DEEMED R ENT ON PROPERTIES MENTIONED IN SCHEDULE D SHOULD NOT BE COMPUTED.THE ASSESSEE ARGUED THAT ANNUAL VALUE OF DEOLALI FLAT AND GHATKOPAR OFFICE HAS BEEN CALCULATED ON STANDARD RENT,THAT BOTH THE PROPERTIES WERE NOT LET OUT, THAT IN CASE OF SHANITA JAIN THE TRI BUNAL HAD ACCEPTED,FOR THE AY.2002 - 03,THE ALV BASED ON STANDARD RENT DETERMINABLE UNDER THE RENT CONTROL ACT. THE AO HELD THAT THE EXPLANATION OF THE ASSESSEE WAS NOT SATISFACTORY.HE REFERRED TO THE PROVISIONS OF SECTION 23(1)OF THE ACT AND HELD THAT BOTH T HE PROPERTIES WOULD BE GOVERNED BY 23(1)(A)OF THE ACT,THAT THE ASSESSEE HAD NOT GIVEN ANY INDICATOR OR ANY REASONABLE RENT IN RESPECT OF TWO PROPERTIES.HE ESTIMATED THE RENT FROM BOTH THE PROPERTIES AT RS.10,000/ - P.M..AFTER GIVING STANDARD DEDUCTION OF 30% HE DETERMINED ANNUAL RENTAL VALUE AT RS.84,000/ - FOR THE YEAR UNDER APPEAL. 2. 2. AGGRIEVED BY THE ORDER OF THE AO THE ASSESSEE PREFERRED AN APPEAL BEFORE THE FAA . AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE ASS ESSMENT ORDER THE FAA HELD THAT THE AO HAD ESTIMATED RENT AT RS.10,000/ - PER MONTH, THAT HE HAD NOT CONSIDERED THE MUNICIPAL VALUE WHICH WAS A STRONG EVIDENCE REPRESENTING THE EARNING CAPAC I TY OF THE BUILDING, THAT HE HAD CALCULATED THE INCOME FROM HOUSE PROPERTY ONLY ON ESTIMATE BASIS , THAT NO INVESTIGATION WAS CARRIED OUT TO ASCERTAIN THE ACTUAL FAIR RENT OF THE PROPERTY, THAT THE AO HAD FAILED TO STATE AS TO WHAT WAS THE BASIS/SOURCE OF HIS ESTIMATION, THAT FAIR RENT COULD BE ASCERTAINED BY INVESTIGATING THE RENT BY PLACING SIMILARLY PLACED PROPERTIES.THE FAA RELIED UPON THE CASES OF SHEILA KAUSHIK (131 ITR 435) AND DE W AN DAULAT RAI KAPOOR (122 ITR 700) OF THE H ONBLE SUPREME COURT. SHE ALSO REFERRED TO THE CASES OF ASHWIN ADEKAR (ITA/1867/MUM/2006) DT.11.7.08, RELIANCE COMMERCIAL COR PN .,(ITA 2035/MUM/98)DT.1.212.03, PARK PAPER INDUSTRIES LTD.(ITA 1239 - 1242/MUM/08 DT. 28. 0 8. 08).FINALLY, SHE HELD THAT PROPERTY FOR PROPERTY NOT LET OUT MUNICIPAL VALUE SHOULD BE ADAPTED TO D ETERMI NE ALV AND DIRECTED THE APO TO RE - CALCULATE THE INCOME FROM H OUSE PROPERTY BY ADOPTING THE STANDARD RENT/MUNICIPAL VALUE AS YARD STICK. 2. 3 . BEFORE US ,DEPARTMENTAL REPRESENTATIVE( DR ) SUPPORTED THE ORDER OF THE AO. AUTHORISED REPRESENTATIVE( AR ) RELIED UPON THE ORDER OF THE FAA. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL BEFORE US. ITA/ 6406 /MUM/20 10 ,AY. 07 - 08 - MONICA 3 WE FIND THAT THE AO HAD DETERMINED THE ALV WITHOUT ANY BASIS.THE FAA HAS GIVEN A CATEGORICAL FINDING IN THAT REGARD AND HAS HELD THAT NO INVESTIGATION HAD BEEN DONE TO ASCERTAIN THE ACTUAL FAIR RENT OF THE PROPERTY.THE FAA HAS RELIED UPON THE JUDGMENT OF HONBLE APEX COURT DELIVERED IN THE CASE OF SHEILA KAUSHIK (SUPRA).SHE HAS ALSO REFERRED TO THE DECISIONS OF THE TRIBUNAL IN THE CASES OF ASHWIN ADEKAR,RELIANCE COMMERCIAL CORPORATION AND PARK PAPER INDUSTRIES LTD.(SUPRA) .WE FIND THAT IN THE CASE OF SHEILA KAUSHIK THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE AND IT HAS BEEN HELD THAT IN CASE OF THE PROPERTIES NOT LET OUT ALV HAD TO BE BASED ON STANDARD RENT.THE DECISIONS OF THE TRIBUNAL RELIED UPON BY THE FAA S UPPORT THE DECISION OF THE FAA.THEREFORE, WE ARE OF THE OPINION THAT HER ORDER DOES NOT S UFFER FROM ANY LEGAL INFIRMITY.UPHOLDING HER ORDER, WE DECIDE THE GROUND NO.1 AGAINST THE AO. 3. SECOND G ROUND OF APPEAL IS ABOUT SHARE TRANSACTIONS UNDER TAKEN BY THE A SSESSEE DUR ING THE YEAR UNDER APPEAL. DURING THE ASS ESSMENT P ROCEEDINGS THE AO FOUND THAT THE A SSESSEE HAD DECLARED SHORT TERM CAPITAL GAINS(STCG) ON SALE OF SHARES RS.75.02 LACS AND LONG TERM CAPITAL GAINS( LTCG ) OF RS.2.08 CR ORES ON SALE OF SHARES AND RS.5.81 LACS ON S ALE OF FLAT. HE FURTHER FOUND THAT HER INVESTMENT IN S H ARES AS ON 31.3.07 WAS 5.87 CR ORES, THAT SHE WAS HAVING DEMAT ACCOUNT IN SVS PVT. LTD. ,T HAT THE LTCG ON SHARES WAS IN 14 SCRIPS AMOUNTING TO RS.2.08 CR ORES, TH AT OUT OF THESE SHARES OF 4 COMPANIES WERE R ECEIVED BY HER FROM HER FATHER AFTER HIS DEMISE ,THAT THE TOTAL AMOUNT OF CAPITAL GAIN DECLARED ON SHARES WAS 6.70 LACS, THAT THE REMAINING CAPITAL GAIN OF 2.01 CR ORES W A S ON SHARES OF 10 COMPANIES, THAT THE STCG DECLARED WAS IN NEARLY 160 SCRIPS. THE AO DI D NOT ACCEPT THE CONTENTION OF THE ASSESSEE THAT SHE SHOULD NOT BE TRE ATED AS TRADER IN SHARES AND HE LD THAT DURING THE YEAR SHE TRADED IN 160 SCRIPS, THAT IN MOST OF THE SCRIPS SHE HAD MADE A NUMBER OF TRANSACTIONS ON DIFFERENT DATES, THAT SHARES HAD BEEN TRADED IN HUGE VOLUMES ON MOST O F THE WORKING DAYS OF THE YEAR.HE REFERRED TO THE DE CISION OF GOPAL PUROHIT (29 SOT 117) AND HELD THAT SHE HAD FREQUENTLY TRADED IN ONE SINGLE SCRIP LIKE ANSAL INFRASTRUCTURE , MANY A TIMES, THAT ONLY FEW OCCASIONS THE HOLDIN G PERIOD WAS 3 - 4 MONTHS, THAT BARRING A FEW SHARES ALL THE SHARES HAD BEEN SOLD AND PURCHASED ON REGULAR BASIS, THAT THE NATURE OF TRANSACTIONS PROVED THAT THE SHARES HAD NOT BEEN PURCHASED FOR INVESTMENT PURPOSES THOUGH THE SAME HAS BEEN SHOWN AS INVESTMEN T IN THE BALANCE SHEET .FINALLY, THE AO HELD THAT SHARE TRANSACTIONS CARRIED OUT BY THE ASSESSEE HAS TO BE TREATED AS BUSINESS. 3.1 . D URING THE APPELLATE PROCEEDINGS, BEFORE THE FAA THE ASSESSEE CONTENDED THAT SHE HAD MAINTAINED REGULAR BOOKS OF ACCOUNT WHEREI N TWO PORTFOLIOS WERE MAINTAINED, THAT SHE W AS HAVING INVESTMENT PORTFOLIO, THAT THE INVESTMENT PORTFOLIO COMPRISED THE SECURITIES WHICH WERE TREATED AS CAPITAL ASSETS, THAT SHE WAS ALSO MAINTAINING TRADING PORTFOLIO COMPRISING OF STOCK - IN - TRADE THAT WERE TR EATED AS TRADING ASSETS, THAT SHE HERSELF HAD BIFURCATED THE ENTRIES AND HAD OFFERED THE RESULTANT PROFITS/LOSS ON THE SALE OF SHARES AS BUSINESS INCOME/LTCG/STCG SEPARATELY, THAT SHE WAS AN INVESTOR IN SHARES AND SECURITIES SINCE LAST SEVERAL YEARS, THAT THE TRANSACTIONS OF SALE AND PURCHASE OF SHARES HAD BEEN CHARGED WITH SECURITY TRANSACTION TAX, THAT SHE HAD DIVERSIFIED INVESTMENTS, THAT DIVERSIFICATION DID NOT MEAN THAT THE ASSESSEE HAD TREATED INVESTMENT AS STOCK IN TRADE OR HAD CARRIED OUT BUSINESS .R EFERRING TO CIR CULAR NO.4/2007 DT.15.6.07 THE ASSESSEE FURTHER CONTENDED THAT HE WAS MAKING INVESTMENT IN SHARES SINCE 1997 AND HAD DISCLOSED SHARES/ DEBENTURES AS INVESTMENT IN THE BALANCE SHEET CONSISTEN T LY SINCE THEN, THAT THE VALUATION OF THE ASSESSEE W AS ACCEPTED BY THE AO IN THE EARLIER YEARS ,THAT THE INTENTION OF THE ASSESSEE HAD TO BE SEEN FROM THE DATE OF PURCHASE, THAT RIGHT FROM THE BEGINNING SHE HAD TREATED DELIVERY BASED TRANSACTIONS AS INVESTMENT AN D N OT AS STOCK - IN TRADE, THAT SHE HAD NEVER CON VERTED INVESTMENT INTO STOCK OR HAD NEVER TREATED AS STOCK , THAT ALL INVESTMENT S WERE STRICTLY DELIVERY BASED, THAT LTCG ITA/ 6406 /MUM/20 10 ,AY. 07 - 08 - MONICA 4 WERE IN RESPECT OF SHARES WHICH WERE ACQUIRED IN EARLIER YEARS, THAT THE AO HIMSELF HAD ACCEPTED THAT LTCG ON SHARES OF 2.08 CR ORE S WAS FOR THE SHARES THAT WERE HELD FOR MORE THAN 12 MONTHS, THAT THE INVESTMENTS MADE BY HER WAS INCREASING EVERY YEAR .THE ASSESSEE REFERRED TO THE ASSESSMENT ORDER PASSED BY THE AO U/S. 143(3) FOR THE AY 04 - 05 WHEREIN STCG OF RS.29.60 LACS AND LTCL OF RS.1.42 LACS WAS ACCEPTED .IT WAS FURTHER ARGUED THAT THE ASSESSEE DID NOT HAVING ANY INFRASTRUCTURE FOR DOING BUSINESS IN STOCK TRADING ON LARGE SCALE COMMERCIAL B ASIS .SHE REFER RED TO THE CASE OF JANAK S.RANG WAL A (11 SOT 627) AND GOPAL PUROHIT(SUPRA). AFTER CONSIDE RING THE SUBMISSION OF THE ASSESSEE AND THE ASS ESSMENT ORDER, THE FAA HE LD THAT IN THE IMMEDIATELY PRECED IN G AY . THE AO HAD TREATED THE STCG AS BUSINESS INCOME, THAT THE THEN FAA HAD ALLOWED THE APPEAL FILED BY THE ASSESSEE FOR AY 2006 - 07, THAT THE FAA HAD, W HILE D ECIDING THE APPEAL FOR AY 06 - 07, ANALYSED THE MATTER IN DETAILS AND HAD FOUND THAT THE FACTS OF THE CASE OF THE ASSESSEE WERE IDENTICAL TO THE FACTS OF CASE OF GOPAL PUROHIT (SUPRA) , THAT THE ASSESSEE DESCRIBED THE METHOD OF EARNING THE INCOME HAD REM AINED SAME AS IN EARLIER YEARS, THAT THE METHODOLOGY OF FILING THE RETURN ALSO REMAINED THE SAME.THE FAA RE FERRED TO THE CASES OF V. NAGES (ITA/5420/ M UM / 2008 - AY - 05 - 06 ) , SADHANA NABERA ( ITA/2586/MUM/2009 - DT.26.3. 2010 ) AND SUGAMCHAND C. SHAH (37 DTR 345) AND HELD THAT WHEREVER THE ASSESSEE HAD HELD SHARES FOR A PERIOD OF MORE THAN 1 MONTH IT COULD BE STATED THAT THE SHARES WERE PURCHASED AS INVESTMENT AND T HEIR SALE WOULD RESULT IN STCG, THAT WHEREVER SHARES HAD BEEN HELD FOR LESS THAN 1 MONTH THE RESULTANT GA IN HAD TO BE TREATED AS PROFIT FROM BUSINESS. ACCORDINGLY THE FAA DIRECTED THE AO TO WORK OUT AND COMPUTE THE STCG AND INCOME FROM BUSINESS OF THE ASSESSEE ACCORDINGLY. 3.2. BEFORE US, THE DR PARTLY SUPPORTED THE ORDER OF THE FAA AND ARGUED THAT DIRECTION GIVEN BY HER ABOUT THE SHARES HELD FOR MORE THAN ONE MONTH WERE CONTRARY TO THE DECISION OF GOPAL PUROHIT. THE AR RELIED UPON THE DECISION OF THE FBENCH OF THE M UMBAI TRIBUNAL DELIVERED IN ASSESSEE S OWN CASE FOR AY 06 - 07 (ITA 5655/MUM/2009) DT.4.11.2022. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US. WE FIND THAT THE TRIBUNAL HAS MENTIONED THE FACTS OF THE CASE FOR THE AY 06 - 07 AS UNDER: 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUAL WHO FILED THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ON 16 - 10 - 2006 DECLARING TOTAL INCOME OF RS.2,91,69,761/ - . THE SAID INCOME COMPRISED OF SHORT TERM CAPITAL GAINS OF RS.2,28,16,373/ - AND INCOME FROM F & O AND SPECULATIVE TRANSACTION OF RS.64,29,182/ - . THE ASSESSEE HAD ALSO DECLARE D LONG TERM CAPITAL GAINS OFRS.1,17,41,141/ - ARISING FROM SALE OF SHARES WHICH WERE CLAIMED TO BE EXEMPT U/S.10(38). THE INCOME EARNED BY THE ASSESSEE FROM THE DEALING IN FUTURE AND OPTION TRANSACTIONS WAS DECLARED BY HER AS BUSINESS INCOME AND THE PROFIT EARNED FROM DELIVERY BASED TRANSACTION IN SHARES WAS DECLARED AS CAPITAL GAINS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS CALLED UPON BY THE ASSESSING OFFICER TO EXPLAIN AS TO WHY THE PROFIT ARISING FROM TRANSACTIONS IN SHARES SHOWN UND ER THE HEAD CAPITAL GAINS SHOULD NOT BE TREATED AS HER BUSINESS INCOME. IN REPLY, ELABORATE SUBMISSION WAS MADE ON BEHALF OF THE ASSESSEE,THE GIST OF WHICH AS SUMMARIZED BY THE AO ON PAGE NO.2 OF HIS ORDER WAS AS UNDER: I ) INVESTMENT IN SHARES HAS BEEN MAD E BY THE ASSESSEE OUT OF HER OWN FUNDS. II ) THE SHARES PURCHASED FROM TIME TO TIME HAVE BEEN SHOWN IN THE BOOKS OF ACCOUNT BY THE ASSESSEE AS HER INVESTMENT ALL THROUGHOUT. III ) INVESTMENT MADE BY THE ASSESSEE WAS SPREAD OUT IN DIFFERENT SHARES TO SAFEGUARD HER I NTEREST, IV ) ALL THE TRANSACTIONS OF PURCHASE AND SALE OF SHARES WERE ROUTED THROUGH BSE AND NSE AND THE SAME WERE DELIVERY BASED. V ) INTENTION OF THE ASSESSEE IN MAKING THE TRANSACTIONS OF SHARES HAS TO BE SEEN AND NOT VOLUME OR FREQUENCY OF SUCH TRANSACTIONS T O DETERMINE THE NATURE ITA/ 6406 /MUM/20 10 ,AY. 07 - 08 - MONICA 5 THEREOF. IN SUPPORT OF HER CASE, RELIANCE WAS ALSO PLACED BY THE ASSESSEE ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS: I) ARJUN KAPUR VS. DCIT 70 ITD 161 (DEL.) II) ACIT VS. KETHAN KUMAR SHAH 242 ITR 83/108. III) MOTILAL OSWAL VS. ADDL. CIT 8 SOT 771. IV) DIVYABEN SHAH VS. DCIT 33 SCL 443. WE FURTHER FIND THAT BEFORE THE TRIBUNAL THE AR AND DR ARGUED AS FOLLOWS 6. THE LEARNED DR AT THE OUTSET, INVITED OUR ATTENTION TO THE FINDINGS / OBSERVATIONS RECORDED BY THE AO IN PARAGRAPH NO. 2.2. 1 TO 2.2.8 OF HIS ORDER TO HOLD THAT THE PROFIT EARNED BY THE ASSESSEE FROM THE TRANSACTIONS OF PURCHASE AND SALE OF SHARES CONSTITUTED HER BUSINESS INCOME AND NOT CAPITAL GAINS.SHE STRONGLY RELIED ON THE SAID FINDINGS/OBSERVATIONS IN SUPPORT OF THE REVENU ESCASE THAT THE SHARES WERE PURCHASED AND HELD BY THE ASSESSEE IN THE CAPACITY OF A TRADER AS STOCK IN TRADE AND THE PROFIT ARISING FROM SALE THEREOF CONSTITUTED HERBUSINESS INCOME. SHE CONTENDED THAT THE LEARNED CIT(APPEALS), HOWEVER, HAS ACCEPTED THE T REATMENT GIVEN BY THE ASSESSEE TO THE SAID PROFITS AS CAPITAL GAINS WITHOUT PROPERLY APPRECIATING THE FINDINGS/OBSERVATIONS RECORDED BY THE AO TO JUSTIFY THE TREATMENT GIVEN BY HIM TO THE PROFIT EARNED BY THE ASSESSEE FROM PURCHASE AND SALE OF SHARES AS HE R BUSINESS INCOME. SHE SUBMITTED THAT AS CLEARLY MADE OUT BY THE AO REFERRING TO THE RELEVANT FACTS OF THE ASSESSEES CASE, THE PRIMARY MOTIVE OF THE ASSESSEE TO UNDERTAKE THE TRANSACTIONS IN SHARES WAS TO MAKE PROFIT. SHE CONTENDED THAT THE LEARNED CIT(AP PEALS), HOWEVER, SIMPLY RELIED ON THE DECISION OF THE TRIBUNAL IN THE CASE OF GOPAL PUROHIT (SUPRA) AND FOLLOWED THE RULE OF CONSISTENCY TO GIVE RELIEF TO THE ASSESSEE ON THIS ISSUE. SHE RELIED ON THE FOLLOWING DECISIONS OF THE TRIBUNAL STATING THAT IN THE SIMILAR FACTS AND CIRCUMSTANCES AS INVOLVED IN THE ASSESSEES CASE, PROFIT ARISING FROM PURCHASE AND SALE OF SHARES HAS BEEN HELD TO BE BUSINESS INCOME OF THE ASSESSEE: I) SHAILESH L. SHAH VS. DCIT ITA NO. 3991 & 3992/MUM/2008 ; DATED 13TH JULY, 2010. II) ACIT VS. MR. V. NAGESH ITA NO. 5410/MUM/2008 ; DATED 24TH SEPT.,2009. III) SMT. SADHANA NABERA VS. ACIT ; ITA NO. 2586/MUM/2009 , DATED 26 TH MARCH,2010. IV) SARNATH INFRASTRUCTURE (P) LTD. VS. ACIT 120 TTJ (LUCKNOW) 216. 7. THE LEARNED COUNSEL FOR THE ASSESSEE , ON THE OTHER HAND, SUBMITTED THAT THE PROFIT ARISING FROM SALE OF SHARES WAS DECLARED BY THE ASSESSEE AS SHORT TERM CAPITAL GAIN AND LONG TERM CAPITAL GAIN DEPENDING ON THE PERIOD OF HOLDING. HE SUBMITTED THAT THE SHORT TERM CAPITAL GAINS AS WELL AS LONG TERM CAPITAL GAINS DECLARED BY THE ASSESSEE WAS TREATED BY THE AO AS HER BUSINESS INCOME AND THE LEARNED CIT(APPEALS) WHILE DISPOSING OF THE APPEAL OF THE ASSESSEE VIDE HIS IMPUGNED ORDER HAS DIRECTED THE AO TO ACCEPT THE TREATMENT GIVEN BY THE ASSESSEE T O THE PROFITS ARISING FROM SALE OF SHARES AS SHORT TERM CAPITAL GAINS AND LONG TERM CAPITAL GAINS. HE CONTENDED THAT THE DEPARTMENT IN THE PRESENT APPEAL HAS CHALLENGED THE ACTION OF THE LEARNED CIT(APPEALS) ONLY IN RESPECT OF DIRECTION GIVEN TO THE AO TO TREAT THE BUSINESS INCOME AS SHORT TERM CAPITAL GAINS AND THE DECISION RENDERED BY THE LEARNED CIT(APPEALS) DIRECTING THE AO TO ACCEPT THE CLAIM OF THE ASSESSEE FOR LONG TERM CAPITAL GAINS HAS NOT BEEN CHALLENGED BY THE DEPARTMENT. HE CONTENDED THAT THE DE PARTMENT THUS HAS ACCEPTED THE ASSESSEE AS INVESTOR IN SHARES WHEN IT COMES TO SELL THEREOF GIVING RISE TO LONG TERM CAPITAL GAINS AND THERE WAS NO REASON OR JUSTIFICATION TO TREAT HER AS A TRADER ONLY IN RESPECT OF SHARES, THE PROFITS ON SALE OF WHICH GAV E RISE TO SHORT TERM CAPITAL GAINS. HE CONTENDED THAT THE INTENTION OF T HE ASSESSEE CANNOT BE DECIDED MERELY ON THE BASIS OF PERIOD OF HOLDING OF SHARES.HE SUBMITTED THAT THE ASSESSEE HAS ALL ALONG MAINTAINED TWO PORTFOLIOS ONE IN RESPECT OF F & O TRANSACT IONS AND TRANSACTIONS IN SHARES WITHOUT DELIVERY AND OTHER IN RESPECT OF DELIVERY BASED TRANSACTIONS. HE SUBMITTED THAT THE INCOME ARISING FROM F & O AND SPECULATIVE TRANSACTION WAS OFFERED BY THE ASSESSEE AS HER BUSINESS INCOME AND THE INCOME FROM DELIVER Y BASED SHARE TRANSACTIONS WAS OFFERED AS CAPITAL GAINS. HE CONTENDED THAT ANY PRUDENT INVESTOR WILL NOT PUT ALL HIS EGGS IN ONE BASKET AND HOLDING PERIOD OF SHARES AND FREQUENCY OF SHARE TRANSACTIONS WOULD DEPEND ON MARKET CONDITION. ACCORDING TO HIM, THE MOTIVE IS CAPITAL APPRECIATION OF INVESTMENT ITA/ 6406 /MUM/20 10 ,AY. 07 - 08 - MONICA 6 MADE IN SHARES. HE SUBMITTED THAT THE ENTIRE LOAN AMOUNT WAS USED BY THE ASSESSEE IN THE YEAR UNDER CONSIDERATION FOR F & O TRANSACTIONS AND THE INVESTMENT IN DELIVERY BASED SHARES WAS MADE BY THE ASSESSEE OUT OF HER OWN FUNDS. HE SUBMITTED THAT ALL THE DELIVERY BASED SHARES PURCHASED BY THE ASSESSEE WERE TREATED AS INVESTMENT IN THE BOOKS OF ACCOUNT IN THE EARLIER YEARS AS WELL AS IN THE SUBSEQUENT YEARS AND THE SAID TREATMENT WAS ACCEPTED BY THE DEPARTMENT. HE SUBMITTED THAT THE MARKET VALUE OF SHARES ACQUIRED BY THE ASSESSEE FOR RS.5.99 CRORES HAD BECOME RS.9.30 CRORES AS ON 31 - 03 - 2006. ACCORDING TO HIM, IF THE ASSESSEE WAS A TRADER IN SHARES, HE WOULD HAVE CERTAINLY SOLD ALL THE SHARES TO BOOK THE PROFIT, BUT THE FACT THAT HE STILL PREFERRED TO HOLD THE SHARES CLEARLY SHOWS THAT HE WAS INVESTOR IN SHARE AND NOT A TRADER. AS REGARDS THE DECISION OF THE TRIBUNAL IN THE CASE OF GOPAL PUROHIT RELIED UPON BY THE LEARNED CIT(APPEALS) TO DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE, HE SUBMITTED THAT THE SAID DECISION HAS BEEN UPHELD EVEN BY THE HONBLE BOMBAY HIGH COU RT AND EVEN THE SLP FILED BY THE DEPARTMENT IN THAT CASE HAS BEEN DISMISSED BY THE HONBLE SUPREME COURT. HE CITED VARIOUS DECISIONS OF THE TRIBUNAL STATI NG THAT A SIMILAR ISSUE HAS BEEN DECIDED THEREIN IN FAVOUR OF THE ASSESSEE FOLLOWING THE RULE OF CONSISTENCY. THE TRIBUNAL DECIDED THE ISSUE AGAINST THE AO IN PARA - 08 - 09 WHICH READS AS UNDE R: 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. THE ISSUE INVOLVED IN THE PRESENT APPEAL IS WHETHER THE SHARES SOLD BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION GIVING RISE TO SHORT TERM CAPITAL GAINS WERE PURCHASED AND HELD BY HER AS INVESTMENT OR STOCK IN TRADE. IF THEY WERE PURCHASED AND HELD BY THE ASSESSEE AS INVESTMENT, THE PROFIT ARISING FROM SALE THEREOF WOULD BE CHARGEABLE TO TAX IN THE HANDS OF THE ASSESSEE UNDER THE HEAD CAPITAL GAINS WHEREAS IF THE SAME WERE HELD BY HER AS STOCK IN TRADE, THE PROFIT ARISI NG FROM SALE THEREOF WOULD BE CHARGEABLE TO TAX IN THE HANDS OF THE ASSESSEE UNDER THE HEAD PROFITS & GAINS OF BUSINESS OR PROFESSION. IT IS, THEREFORE, NECESSARY TO ASCERTAIN WHETHER THE SHARES WERE PURCHASED AND HELD BY THE ASSESSEE AS INVESTMENT OR ST OCK IN TRADE AND THIS WILL DEPEND UPON THE INTENTION OF THE ASSESSEE AT THE TIME OF PURCHASE OF RELEVANT SHARES. IT IS WELL SETTLED THAT SUCH INTENTION IS TO BE GATHERED FROM THE RELEVANT FACTS OF EACH CASE AND AS SUBMITTED BY THE LEARNED REPRESENTATIVES O F BOTH THE SIDES, THERE ARE CERTAIN GUIDELINES LAID DOWN IN THE CIRCULARS/INSTRUCTIONS ISSUED BY THE CBDT FROM TIME TO TIME. THE COORDINATE BENCHES OF THIS TRIBUNAL HAVE ALSO SUMMARIZED SOME OF THE IMPORTANT ASPECTS WHICH ARE RELEVANT TO ASCERTAIN THE INTE NTION OF THE ASSESSEE SO AS TO DECIDE WHETHER THE TRANSACTIONS IN SHARES ARE UNDERTAKEN BY THE ASSESSEE AS INVESTOR OR AS A TRADER. AT THE TIME OF HEARING BEFORE US, THE LEARNED REPRESENTATIVES OF BOTH THE SIDES HAVE ARGUED THEIR RESPECTIVE CASES IN THE LI GHT OF THESE GUIDELINES. HOWEVER, BEFORE WE EXAMINE THE FACTS OF THE PRESENT CASE IN THE LIGHT OF THE SAID GUIDELINES, THERE IS ONE PECULIAR FACT INVOLVED IN THE PRESENT CASE WHICH, IN OUR OPINION, HAS A MATERIAL BEARING ON THE ISSUE INVOLVED IN THE PRESEN T APPEAL. 9. IT IS OBSERVED THAT THE CLAIM OF THE ASSESSEE RIGHT FROM THE BEGINNING WAS THAT ALL THE SHARES WERE BEING PURCHASED AND HELD BY HER AS INVESTOR AND THERE WAS NO INTENTION ON HER PART TO TRADE IN THE DELIVERY BASED SHARES. ACCORDINGLY THE PROFIT ARISING FROM SALE OF SHARES WAS OFFERED BY THE ASSESSEE AS CAPITAL GAINS, EITHER SHORT TERM OR LONG TERM, DEPENDING UPON THE PERIOD FOR WHICH THE RESPECTIVE SHARES WERE HELD BY HER. THE AO, HOWEVER, TREATED SHORT TERM AS WELL AS LONG TERM CAPITAL GAINS DE CLARED BY THE ASSESSEE AS HER BUSINESS INCOME. ON APPEAL, THE LEARNED CIT(APPEALS) TREATED THE ASSESSEE AS INVESTOR IN SHARES AND DIRECTED THE AO TO ACCEPT THE CLAIM OF THE ASSESSEE FOR SHORT TERM AND LONG TERM CAPITAL GAINS. IN THE PRESENT APPEAL, THE DEP ARTMENT HAS CHALLENGED THE DECISION OF THE LEARNED CIT(APPEALS) ONLY TO THE EXTENT IT IS IN RESPECT OF SHORT TERM CAPITAL GAINS. IN SO FAR AS THE CLAIM OF THE ASSESSEE FOR LONG TERM CAPITAL GAINS IS CONCERNED WHICH HAS BEEN ACCEPT ED BY THE LEARNED CIT(APPE ALS), THE DEPARTMENT HAS NOT CHALLENGED THE DECISION OF THE LEARNED CIT(APPEALS) AND THIS IS A PECULIAR FACT INVOLVED IN THE PRESENT CASE HAVING MATERIAL AND DIRECT BEARING ON THE ISSUE UNDER ITA/ 6406 /MUM/20 10 ,AY. 07 - 08 - MONICA 7 CONSIDERATION.THIS IS BECAUSE IF THE DEPARTMENT HAS ACCEPTED THAT SOME OF THE SHARES WERE PURCHASED AND HELD BY THE ASSESSEE AS INVESTMENT WHILE ACCEPTING THE DECISION OF THE LEARNED CIT(APPEALS) ALLOWING THE CLAIM OF THE ASSESSEE FOR LONG TERM CAPITALGAIN ARISING FROM SALE THEREOF, THERE IS NO JUSTIFICATION FOR THEM TO CONTEND THAT THE ASSESSEE HAD PURCHASED AND HELD OTHER SHARES AS STOCK IN TRADE MERELY BECAUSE THEY WERE SOLD WITHIN A PERIOD OF ONE YEAR ESPECIALLY WHEN OTHER FACTS RELEVAN T THERETOARE ALMOST SIMILAR. FOR INSTANCE, IF ONE LOT OF 1000 SHARES OF A PARTICUL AR COMPANYWAS PURCHASED BY THE ASSESSEE IN THE EARLIER YEAR AND 500 SHARES OF THE SAID LOT WERE SOLD BY HER IN THE YEAR UNDER CONSIDERATION BEFORE A PERIOD OF ONE YEAR ANDTHE BALANCE 500 SHARES WERE SOLD AGAIN IN THE YEAR UNDER CONSIDERATION BUT AFTER THE PERIOD OF ONE YEAR, IT CANNOT BE SAID THAT THERE WERE TWO DIFFERENT INTENTIONS OF THE ASSESSEE BEHIND PURCHASE OF THE SAME LOT OF SHARES. THE INTENTION OF THE ASSESSEE IN SUCH CASE CANNOT BE DIFFERENT AND THE SAME IN ANY CASE, CANNOT BE DECIDEDMERELYON TH E BASIS OF PERIOD OF HOLDING ESPECIALLY WHEN OTHER MATERIAL FACTS RELEVANT TO THE ISSUE ARE SIMILAR. MOREOVER, THE ASSESSEE WAS CONSISTENTLY TREATED AS INVESTOR IN SHARES BY THE DEPARTMENT AND AS RIGHTLY HELD BY THE LEARNED CIT(APPEALS)RELYING ON THE DECIS ION IN THE CASE OF GOPAL PUROHIT (SUPRA), THERE WA S NO REASON TO CHANGE THE SAID TREATMENT IN THE YEAR UNDER CONSIDERATION AS PER THE RULE OF CONSISTENCY ESPECIALLY WHEN THERE WAS NO CHANGE IN THE RELEVANT FACTS. WE, THEREFORE,FIND NO INFIRMITY IN THE IMP UGNED ORDER OF THE LEARNED CIT(APPEALS) TREATING THE ASSESSEE AS INVESTOR IN SHARES AND DIRECTING THE AO TO BRING TO TAX THE PROFIT ARISING FROM THE TRANSACTIONS OF SHARES UNDER THE HEAD CAPITAL GAINS AS SHORT TERM AND LONG TERM CAPITAL GAINS DEPENDING O N THE PERIOD OF HOLDING . RESPECTFULLY, FOLLOWING THE ABOVE ORDER OF THE TRIBUNAL GROUND NO.2 IS DECIDED AGAINST THE AO AS THE FACTS AND CIRCUMSTANCES OF THE YEAR UNDER APPEA L ARE ALMOST SIMILAR TO THE FAC T S OF THE EARLIER YEARS. 4. THE NEXT GROUND OF APPEA L DEALS WITH DEL E TING PROPORTIONATE EXPENSES AMOUNTING TO RS.8.16 LACS. DURING THE ASS ESSMENT PROCEEDINGS, THE AO FOUND THAT THE ASSESSEE HAD SHOWN LTCG AND STCG UNDER THE HE AD CAPITAL GAINS, THAT SHE HAD CLAIMED LTCG EXEMPT U/S. 10(38) OF THE ACT, THAT SHE H AD CLAIMED EXPENSE OF RS.11.12 LACS AGAINST STCG ONLY, THAT THE EXPENSE RELATED TO STCG AS WELL AS LTCG, THAT THE EXPENDITURE WAS INDIRECTLY ATTRIBUTABLE TO LTCG WHICH WAS EXEMPT. MAKING A PROPORTIONATE DISALLOWANCE OF RS. 8.16 LACS THE AO ADDED THE SAID SU M TO THE TOTAL INCOME OF THE ASSESSEE . 4.1. D URING THE APPELLATE PROCEEDINGS, THE ASSESSEE ARGUED THAT THE DISALLOWANCE WAS MAD E IN THE PROPORTION OF PROFITS, THAT EXPENSES WERE BASED ON THE NUMBER OF TRANSACTIONS THAT THE TRANSACTIONS UNDER THE HEAD LTCG W ERE ABOUT 15, THAT SHE HAD HUNDREDS OF TRANSACTIONS UNDER THE CATEGORY STCG. THE FAA, AFTER CONSIDERING THE AVAILABLE MATERIAL, HELD THAT THE AO HAD CLAIMED THAT THE EXPENSES CLAIMED AGAINST THE STCG WERE ALSO INDIRECTLY ATTRIBUTABLE TO LTCG, THAT HE HAD NO T GIVEN ANY EXPLANATION FOR MAKING PROPORTIONATE DISALLOWANCE, THAT EXPENSES DISALLOWED ON AD HOC BASIS HAD TO BE DELETED. 4.2. BEFORE US, THE DR S UPPORTED THE ORDER OF THE AO AND THE AR RELIED UPON THE ORDER OF THE FAA.WE FIND THAT THE AO HAD MADE PROPORTI ONATE DISALLOWANCE ASSUMING THAT THE EXPENSES CLAIMED TO HAVE BEEN INCURRE D AGAINST THE SRCG WERE INDIREC T L Y ATTRIBUTABLE TO LTCG ALSO. BUT HE HAS NOT EXPLAINED AS TO WHAT WAS THE BASIS FOR ARRIVING AT THE ABOVE CONCLUSIONS . THE AO HAD WITHOU T MAKING ANY E NQUIRY ABOUT THE NATURE OF EXPENSES AND THE NUMBER OF TRANSACTIONS OF LTCG MADE AN ADDITION OF RS.8,61,667/ - . W E FIND THAT THE FAA HAD DELETED THE DISALLOWANCE AS SHE WAS OF THE OPINION THAT ADHOC DISALLOWANCE SHOULD NOT BE MADE.IN OUR OPINION, CONSIDERIN G THE FACTS AND CIRCUMSTANCES OF THE CASE THE ORDER OF THE FAA DOES NOT SUFFER FROM ANY LEGAL INFIRMITY. SO, CONFIRMING HER ORDER WE DECIDE GROUND NO.3 AGAINST THE AO. ITA/ 6406 /MUM/20 10 ,AY. 07 - 08 - MONICA 8 5. LAST GROUND OF APPEAL IS ABOUT DIRECTION GIVEN BY THE FAA TO RE - COMPUTE DISALLOWANCE U/ S.14A OF THE ACT.DURING THE ASS ESSMEN T PROCEEDINGS, THE AO FOUND THAT THE ASSESSEE HAD RECEIVED EXEMPT INCOME THAT SHE HAD NOT DISALLOWED ANY EXPENDITURE RELATED TO EXEMPT INCOME. HE HELD THAT FROM THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE IT WAS NOT POSSIBLE TO ASCERTAIN THE AMOUNT OF EXPENDITURE DIRECTLY RELATED TO THE EXEMPT INCOME.THE AO DIRECTED THE ASSESSEE TO SUBMIT THE COMPUTATION OF INCOME AS PER RULE 8D OF INCOME TAX RULE 1962 (RULES).THE ASSESSEE CALCULATED THE DISALLOWANCE AT RS.1.30 LACS. THE AO HELD THAT THE ASSESSEE HAD NOT COMPUTED 0.5% OF THE INVESTMENT FOR MAKING THE DISALLOWANCE. HE CALCULATED THE DISALLOWANCE AT RS. 3.08 LACS AND MADE TOTAL DISALLOWANCE OF RS.4,39,780/ - . 5.1. DURING THE APPELLATE P ROCEEDIN GS, THE ASSESSEE SUBMITTED THA T THE ASSESSEE HAD CLAIMED INDIRECT EXPENSES OF RS.1.49 LACS OTHER THAT INT EREST EXPENSES IN RESPECT OF FU TURES AND OPTIONS TRANSACTIONS, THAT IN VIEW OF EXPENSES NOT BEING CLAIMED IN RESPECT OF INVESTMENT NO EXPENSES COULD BE DISALLOWED U/R . 8D(III). AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE FAA HELD THAT THE AO HAD MADE AN ESTIMATED DISALLOWANCE U/S.14A AS HE COULD NOT ASCERTAIN THE AMOUNT OF EXPENDITURE INCURRED BY THE ASSESSEE TO EARN EXEMPT INCOME, THAT THE SHE HAD NOT FILED ANY NEW DETAILS B EFORE HER. THE FAA DIRECTED THE AO TO RE - EXAMINE THE ISSUE AND MAKE NECESSARY DISALLOWANCE,IF ANY,AS PER THE PROVISIONS OF THE ACT. 5.2. BEFORE US, THE DR LEFT ISSUE TO THE DISCRETION OF THE BENCH. THE AR RELIED UPON THE ORDER OF THE FAA.WE HAVE HEARD THE R IVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US . WE FIND THAT THE AO HAD INVOKED THE PROVISIONS OF RULE 8D, THE AY UNDER APPEAL IS 2007 - 08, THAT AS PER H ONBLE J URISDICTIONAL H IGH C OURT RULE 8D WAS NOT APPLICABLE FOR THE YEAR UNDER CONSIDERATION. THEREF ORE, IN OUR OPINION THE AO WAS NOT CORRECT IN APPLYING RULE 8D. SECONDLY, THE FAA HAS RESTORED BACK THE MATTER TO THE FILE OF THE AO TO RE - EXAMINE THE ISSUE. IN OUR OPIN I ON THE INTEREST OF REV ENUE WAS NOT ADVERSELY AFFECTED BY THE DIRECTION OF THE FAA. IN O UR OPINION THERE IS NO NEED T O INTERFERE WITH HER ORDER.THEREFORE, UPHOLDING THE ORDER OF THE FAA GR. NO.4 IS DECIDED AGAINST THE AO. ITA NO.6987/MUM/2010 : 6. THE ONLY GROUND OF APPEAL RAISED BY THE ASSESSEE IS ABOUT TREATING THE SHARE TRANSACTIONS FOR THE SHARES HELD UPTO ONE MONTH AS PROFIT FROM BUSINESS INSTEAD OF STCG AND NOT ACCEPTING THE DECISION OF THE TRI BUNAL DELIVERED IN THE CASE OF G OPAL PUROHIT (SUPRA). 6.1. WHILE DECI DING THE APPEAL FILED BY THE AO, WE HAVE MENTIONED THE FACTS OF THE CASE IN EARLI ER PARAGRAPHS. DURING THE COURSE OF HE ARING BEFORE US, THE AR RELIED UPON THE DECISION OF THE TRIBUNAL DELIVERED IN THE ASSESSEE S OWN CASE FOR AY 06 - 07 (SUPRA).WE FIND THAT THE TRIBUNAL HAD DECIDED THE ISSUE AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE , AS MENTIONED IN THE EARLIER PART OF THE ORDER.RESPECTFULLY, FOLLOWING THE ABOVE ORDER OF THE T RIBUNAL FOR AY 06 - 07 WE DECIDED THE EFFECTIVE GOA IN FAVOUR OF THE ASSESSEE . AS A RESULT,APPEAL FILED BY THE AO STANDS DISMISSED AND APPEAL OF THE AS SESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND JULY,2015. 22 , 2015 ITA/ 6406 /MUM/20 10 ,AY. 07 - 08 - MONICA 9 SD/ - SD/ - ( /JOGINDER SINGH) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOU NTANT MEMBER / MUMBAI, /DATE: 22.7. 2015 . . . JV . SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT( A)/ , 4. THE CONCERNED CIT / 5. DR A BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST . REGISTRAR , / ITAT, MUMBAI.