Shri Ravjibhai Mathurbhai Patel, Ahmedabad V. The ACIT.,(OSD)Circle-5, Ahmedabad

ITA 769/AHD/2012

• Counselvise Citation: 76920514 RSA 2012
• Duration Of Justice: 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 10-11-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 04-04-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D K SINGH
• Assessee Lawyers: M G PATEL
• Keywords: Business income; Rule of consistency; Cost of acquisition
• Section: 143(3); 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, C BENCH, AHMEDABAD BEFORE SHRI G. C. GUPTA, HONBLE VICE PRESIDENT AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER I.T.A. NO.139/ AHD/2011 & 769/AHD/2012 (ASSESSMENT YEAR 2006-07 & 2008-09 RESPECTIVELY) SHRI RAVIBHAI MATHURBHAI PATEL C/O PARAS AGRO CHEM PVT. LTD., B-1, BLUE HEAVEN FLATS, 323/3, BANSIDHAR HOUSE, SARDAR PATEL NAGAR, NAVRANGPURA, AHMEDABAD VS. DCIT, CIRCLE 5, AHMEDABAD PAN/GIR NO. : ACMPP1986G (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI M G PATEL, AR RESPONDENT BY: SHRI D K SINGH, SR. DR DATE OF HEARING: 22.10.2012 DATE OF PRONOUNCEMENT: 09.11.2012 O R D E R PER SHRI A. K. GARODIA, AM:- BOTH THESE APPEALS FILED BY THE ASSESSEE ARE DIREC TED AGAINST TWO SEPARATE ORDERS OF CIT(A) XI, AHMEDABAD DATED 10.12 .2010 FOR ASSESSMENT YEAR 2006-07 AND DATED 12.03.2012 FOR TH E ASSESSMENT YEAR 2008-09. SINCE, THE ISSUE INVOLVED IS SIMILAR, BOT H THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. FIRST, WE TAKE UP THE APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2006-07 IN I.T.A.NO. 139/AHD/2011. THE GROUNDS RAI SED BY THE ASSESSEE ARE AS UNDER: I.T.A.NO.139 /AHD/2011 I.T.A.NO. 769/AHD/2012 2 THE LD. CIT(A) XI, AHMEDABAD HAS ERRED IN LAW AS W ELL AS ON FACTS OF THE CASE BY CONFIRMING THAT THE A.O. HAS R IGHTLY CONSIDERED THE SHORT TERM CAPITAL GAIN OF RS.12,33,441/- AS BU SINESS INCOME. THE APPELLANT PRAYS TO TREAT PROFIT ON SALE OF SHAR ES AS SHORT TERM CAPITAL GAIN. 2.1 THE BRIEF FACTS TILL THE ASSESSMENT STAGE ARE N OTED BY LD. CIT(A) IN PARA 2 OF HIS ORDER WHICH IS REPRODUCED BELOW FOR T HE SAKE OF READY REFERENCE: 2. GROUND NOS. 1 AND 2 OF APPEAL ARE DIRECTED AGAI NST THE A.O'S TREATMENT OF SHORT CAPITAL GAIN OF RS. 12,33,441/- AS BUSINESS INCOME. IN THE ORDER U/S. 143(3) OF THE ACT, THE AO OBSERVED AS UNDER:- '3.6. THE OBVIOUS CONCLUSION BASED ON THE FACTS OF THE CASE IS THAT THE ASSESSEE IS BUYING AND SELLING SHARES A S IF THEY WERE HIS STOCK-IN-TRADE AND FOR THE PURPOSE OF EARN ING PROFITS. THE PROFIT SO EARNED NEEDS TO BE TAXED AS INCOME FROM BUSINESS. IT IS PERTINENT TO POINT OUT THAT ON SIMILAR FACTS THE ITAT 'C' BENCH AHMEDABAD IN THE CASE OF ITO., W ARD- 7(2) VS. SMT. PURNIMA K.. SHAH, ITAT NO. 3154/AHD/2 002 HELD THAT PROFIT EARNED FROM FREQUENT BUYING AND SE LLING OF SHARES IS TO BE TAXED AS INCOME FROM BUSINESS. 3.7. ACCORDINGLY, THE SHORT-TERM CAPITAL GAIN SHOWN BY THE ASSESSEE AT RS. 12,33,441 /- IS TAXED AS BUSINESS I NCOME. 2.2 BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R IN APPEAL BEFORE LD. CIT(A) AND AFTER CONSIDERING ALL THE CONTENTION S RAISED BY THE ASSESSEE BEFORE HIM, AND AFTER CONSIDERING VARIOUS JUDGEMENTS CITED BY THE LD. A.R. BEFORE HIM, LD. CIT(A) DECIDED THE ISS UE AGAINST THE ASSESSEE AND DISMISSED THE APPEAL OF THE ASSESSEE A ND NOW, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. IT WAS SUBMITTED BY T HE LD. A.R. BEFORE US THAT THERE IS NO BORROWING AND THE SHARES PURCHASED WERE SHOWN BY THE ASSESSEE AS INVESTMENT IN THE BALANCE SHEET. HE FU RTHER SUBMITTED THAT THE CLAIM OF THE ASSESSEE THAT PROFIT ON SALE OF SHARES IS TAXABLE AS CAPITAL GAIN WAS ACCEPTED BY THE DEPARTMENT IN EARLIER AND LATER YEARS AND, THEREFORE, AS PER THE PRINCIPLE OF CONSISTENCY, IN THESE TWO Y EARS ALSO, THE CLAIM OF I.T.A.NO.139 /AHD/2011 I.T.A.NO. 769/AHD/2012 3 THE ASSESSEE SHOULD BE ACCEPTED. HE PLACED RELIANC E ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS: (A) ACIT VS SMT. GARGI SHITALKUMAR PATEL 13 ITR (TR IB) 386 (AHD.) (B) CIT VS NIRAJ AMIDHAR SURTI (48 DTR 33) (GUJ.) (C) CIT VS GOPAL PUROHIT 336 ITR 287 (BOM.) (D) SUNIL KUMAR GANERIWAL VS DCIT 134 ITD 179 (MUM. ) (E) D&M COMPONENTS LTD. VS ACIT 49 SOT 224 (DEL.) (F) MAHENDRA C. SHAH VS ADDL. CIT 58 DTR 242 (MUM.) 2.3 HE FURTHER SUBMITTED THAT IN ONE YEAR, THE A.O. HAS ACCEPTED THE CLAIM OF THE ASSESSEE REGARDING LONG TERM CAPITAL G AIN AND DISPUTED ONLY SHORT TERM CAPITAL GAIN WHEREAS IN LATER YEAR, HE H AS DISPUTED BOTH THESE CLAIMS. 2.4 AS AGAINST THIS, LD. D.R. SUPPORTED THE ORDERS OF AUTHORITIES BELOW. HE DRAWN OUR ATTENTION TO PAGE 32 OF THE PAPER BOOK AND POINTED OUT THAT AS PER THE DETAILS GIVEN IN THE TAX AUDIT REPORT AP PEARING ON THIS PAGE OF THE PAPER BOOK, THERE WAS SUBSTANTIAL AMOUNT OF LOA N TAKEN IN ASSESSMENT YEAR 2006-07 FORM FIVE PERSONS AND THE MAXIMUM AMOU NT OUTSTANDING DURING THAT YEAR HAD BEEN NOTED AT RS.27 LACS AND H ENCE, THIS CONTENTION IS NOT CORRECT THAT THERE IS NO BORROWING. HE ALSO SU BMITTED THAT ALTHOUGH MAJOR AMOUNT WAS REPAID DURING THIS YEAR ITSELF AND HENCE, THERE IS VERY SMALL AMOUNT APPEARING IN THE BALANCE SHEET BUT IT CANNOT BE DISPUTED THAT BORROWED FUNDS WERE UTILIZED BY THE ASSESSEE DURING THIS YEAR FOR PURCHASE OF SHARES. HE ALSO DRAWN OUR ATTENTION TO THE TRIBUNAL DECISION CITED BY THE LD. A.R. RENDERED IN THE CASE OF ACIT VS SMT. GARGI SHITALKUMAR PATEL (SUPRA) AND POINTED OUT THAT IT I S NOTED BY THE TRIBUNAL IN THAT CASE THAT VARIOUS PRINCIPLES CAN BE APPLIED ON THE FACTS OF THE CASE TO FIND OUT WHETHER TRANSACTIONS IN QUESTION ARE IN THE NATURE OF TRADE OR ARE MERELY FOR INVESTMENT PURPOSE AND THE TRIBUNAL HAS NOTED AS MANY AS 11 SUCH PRINCIPLES ON PAGES 394-396 OF 13 ITR (TRIB .) 386 AND IF THESE PRINCIPLES ARE APPLIED IN THE PRESENT CASE, THE CLA IM OF THE ASSESSEE THAT I.T.A.NO.139 /AHD/2011 I.T.A.NO. 769/AHD/2012 4 THESE ARE INVESTMENTS, CANNOT BE ACCEPTED AND, THER EFORE, THE ORDER OF LD. CIT(A) SHOULD BE CONFIRMED. 2.5 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUS ED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW AND THE VARIOUS JUDGEMENTS CITED BY THE LD. A.R. INCLUDING THE RELEVANT PORTION OF SUCH JUDGEMENTS TO WHICH OUR ATTENTION WAS DRAWN BY THE LD. D.R. WE FIND THAT IN THIS YEAR, THE DETAILS OF STATEMENT OF SHORT TERM CAPITAL GAIN IS APPEARING ON PAGE 4 -7 OF THE PAPER BOOK AND AS PER THE SAME, SUBSTANTIAL NUMBER OF TRANSACTIONS ARE CARRIED OUT BY THE ASSES SEE DURING THIS YEAR WHICH RUN INTO ABOUT 170 TRANSACTIONS APPX. ALTHOUG H THE SERIAL NUMBER GIVEN BY THE ASSESSEE IN THE CHART ARE NOT PROPERLY APPEARING. THE TOTAL PURCHASE COST WAS RS.62,32,052/- AND THE TOTAL SALE VALUE WAS RS.74,65,493/- AND AS A RESULT, SHORT TERM CAPITAL GAIN WAS RS.12,33,441/- AND THE TOTAL VALUE OF SHARES SHOWN IN THE BALANCE SHEET IS OF RS.60,38,580/- AND HENCE, THE RATIO OF PURCHASE AND STOCK OF THE SHARES IS HIGH. AS PER THE VARIOUS PRINCIPLES NOTED BY THE T RIBUNAL IN THE CASE OF SMT. GARGI SHITALKUMAR (SUPRA), IT WAS NOTED THAT T HE RATIO BETWEEN THE PURCHASE AND SALE AND HOLDINGS MAY SHOW WHETHER THE ASSESSEE IS TRADING OR INVESTING. IT IS ALSO NOTED THAT HIGH TRANSACTI ON AND LOW HOLDING INDICATES TRADE WHEREAS LOW TRANSACTION AND HIGH HO LDING INDICATES INVESTMENT. IN THE FACTS OF THE PRESENT CASE, FIRS T, WE APPLY THIS PRINCIPLE NOTED BY THE TRIBUNAL AND WE FIND THAT IN THE PRESE NT CASE, THE TRANSACTIONS ARE HIGH AND HOLDING IS LOW AND, THERE FORE, IT CANNOT BE SAID TO BE INVESTMENT. ONE MORE PRINCIPLE LAID DOWN IN THIS JUDGEMENT IS WHETHER THE ASSESSEE HAS BORROWED MONEY TO PURCHASE AND PAID INTEREST THEREON. IT IS ALSO NOTED BY THE TRIBUNAL THAT NO RMALLY MONEY IS BORROWED TO PURCHASE GOODS FOR THE PURPOSE OF TRADE AND NOT FOR INVESTING IN ASSETS FOR RETAINING. IN THE PRESENT CASE, AS PER THE BAL ANCE SHEET OF THE ASSESSEE AS APPEARING ON PAGE 16 OF THE PAPER BOOK, OUTSTAND ING LOAN PAYABLE IS I.T.A.NO.139 /AHD/2011 I.T.A.NO. 769/AHD/2012 5 ONLY OF RS.1.15 LACS AGAINST INVESTMENT OF RS.60.38 LACS BUT DURING THE YEAR, THE ASSESSEE HAS BORROWED AND REPAID UNSECURE D LOAN OF RS.27 LACS APPROXIMATELY AND HENCE, IT CANNOT BE SAID THAT NO BORROWING WAS MADE BY THE ASSESSEE. REGARDING THE PURPOSE OF BORROWIN G, WE FIND THAT THERE IS NO OTHER ACTIVITY CARRIED OUT BY THE ASSESSEE EX CEPT PURCHASING AND SELLING THE SHARES AS EVIDENCED FROM THE P & L ACCO UNT OF THE ASSESSEE APPEARING ON PAGE 17 OF THE PAPER BOOK AND HENCE, I T IS A NORMAL CONCLUSION THAT BORROWING WAS FOR THE PURPOSE OF PU RCHASING THE SHARES ONLY. THERE ARE CERTAIN OTHER FACTORS SUCH AS TREA TMENT GIVEN BY THE ASSESSEE IN THE BALANCE SHEET AND METHOD OF VALUATI ON OF SHARES HELD BY THE ASSESSEE AT THE END OF THE YEAR AT COST ARE IND ICATIVE OF THIS THAT THE SHARES ARE HELD FOR INVESTMENT. IT IS FURTHER NOTE D BY THE TRIBUNAL THAT NOT ONE OR TWO FACTORS WILL BE SUFFICIENT TO COME TO TH E CONCLUSION BUT THE CONCLUSIVE EFFECT OF SEVERAL FACTORS HAVE TO BE SEE N. WHEN WE LOOK INTO THE CONCLUSIVE EFFECT OF THE FACTS NOTED ABOVE, WE FIND THAT REGARDING THIS FACTOR THAT THE INVESTMENT WAS VALUED AT COST, IT I S NOT CONCLUSIVE UNTIL IT IS SHOWN THAT THE MARKET VALUE AT THE END OF THE YEAR WAS LESS AND, THEREFORE, IT COULD HAVE BEEN VALUED AT MARKET VALUE AND WITHO UT ANY CLARITY ON THIS RESPECT, THIS FACTOR CANNOT BE CONSIDERED FOR DECID ING THE CONCLUSIVE EFFECT. REGARDING THE TREATMENT GIVEN IN THE BALAN CE SHEET BY THE ASSESSEE, WE FIND THAT THE SAME WAS SHOWN BY THE AS SESSEE AS INVESTMENT BUT WHEN THIS FACTOR IS PITTED AGAINST OTHER FACTOR S SHOWING HIGH TRANSACTION AND LOW HOLDING RATIO AND BORROWED MONE Y TO PURCHASE SHARES ETC, WE ARE OF THE CONSIDERED OPINION THAT THE CONC LUSIVE EFFECT OF THESE FACTORS SHOWS THAT THE ASSESSEE WAS DEALING IN SHAR ES AND IT WAS NOT HAVING INVESTMENT IN SHARES. HENCE, IN OUR CONSID ERED OPINION, THIS TRIBUNAL DECISION CITED BY THE LD. A.R. IS IN FACT SUPPORTING THE CASE OF THE REVENUE AND NOT OF THE ASSESSEE. I.T.A.NO.139 /AHD/2011 I.T.A.NO. 769/AHD/2012 6 2.6 NOW, WE EXAMINE THE OTHER JUDGEMENTS CITED BY T HE LD. A.R. OF THE ASSESSEE:- - THE FIRST DECISION CITED BY THE LD. A.R. IS THE J UDGEMENT OF HONBLE GUJARAT HIGH COURT RENDERED IN THE CASE OF CIT VS NEERAJ AMIDHAR SURTI (SUPRA). IN THAT CASE, THE FACTS WER E THAT THE ASSESSEE HAS DISCLOSED THAT SOME OF THE SHARES WERE SOLD BY HIM AFTER MORE THAN A YEAR OR TWO AND THE ASSESSEE HAD NOT REPEATED TRANSACTIO NS OF PURCHASE AND SALE OF SHARES OF H.T. LTD. THIS WAS ALSO THE FACT OF TH IS CASE THAT AFTER THE SHARES IN QUESTION WERE SOLD, THE ASSESSEE MADE INV ESTMENT UNDER THE PROVISIONS OF SECTION 54EC IN THE BONDS OF NABARD. UNDER THESE FACTS, IT IS HELD BY THE HONBLE GUJARAT HIGH COURT IN THA T CASE THAT SINCE THE SHARES WERE HELD FOR 14 MONTHS WHICH IS A LONG PERI OD, SHARES CANNOT BE TREATED AS STOCK IN TRADE AND THE PROFITS FROM THE SALES OF SHARES IN QUESTION WAS ASSESSABLE AS CAPITAL GAIN AND NOT AS BUSINESS INCOME. IN THE PRESENT CASE, SHARES OF RS.74,65,493/- (PURCHAS E VALUE) WERE HELD FOR A SMALL PERIOD AND AS A RESULT, THE PROFIT ON SALE OF SUCH SHARES WAS CLAIMED AS SHORT TERM CAPITAL GAIN AND ONLY SHARES OF RS.14,71,607/- (PURCHASE VALUE) WERE HELD FOR A PERIOD EXCEEDING ONE YEAR AND AS A RESULT, THE PROFIT ON SALE OF SUCH SHARES WAS CLAIM ED AS LONG TERM CAPITAL GAIN AND HENCE, IN THE PRESENT CASE, MAJORITY OF SH ARES WERE HELD FOR A PERIOD OF LESS THAN ONE YEAR AND, THEREFORE, THIS J UDGMENT OF HONBLE GUJARAT HIGH COURT IS NOT APPLICABLE IN THE PRESENT CASE BECAUSE THE FACTS ARE DIFFERENT. - THE NEXT JUDGMENT CITED BY THE LD. A.R. IS THE JU DGEMENT OF HONBLE BOMBAY HIGH COURT RENDERED IN THE CASE OF C IT VS GOPAL PUROHIT (SUPRA). IN THAT CASE, THIS FINDING IS REC ORDED BY THE HONBLE HIGH COURT THAT A FINDING OF FACT HAS BEEN ARRIVED AT BY THE TRIBUNAL AS REGARDS TO EXISTENCE OF TWO DISTINCT TYPES OF TRANSACTIONS NAMELY, THOSE BY WAY OF INVESTMENT ON THE ONE HAND AND THOSE FOR THE PURPOS E OF BUSINESS ON THE I.T.A.NO.139 /AHD/2011 I.T.A.NO. 769/AHD/2012 7 OTHER HAND AND ON THIS BASIS, IT WAS HELD BY THE HO NBLE HIGH COURT THAT QUESTION (A) ABOVE DOES NOT RAISE ANY SUBSTANTIAL Q UESTION OF LAW. IN THE PRESENT CASE, WE HAVE TO ARRIVE AT A FINDING AS TO WHETHER TRANSACTIONS UNDERTAKEN BY THE ASSESSEE ARE ON ACCOUNT OF INVEST MENT OR ON ACCOUNT OF BUSINESS AND THIS HAS TO BE ON THE BASIS OF THE FAC TS OF THE PRESENT CASE AND, THEREFORE, THIS JUDGEMENT OF HONBLE BOMBAY HI GH COURT IS OF NO HELP TO THE ASSESSEE IN THE PRESENT CASE. THE SECO ND BASIS OF ARGUMENT BEFORE THE HONBLE BOMBAY HIGH COURT WAS THAT WHETH ER THE PRINCIPLE OF CONSISTENCY SHOULD BE FOLLOWED AND THIS ARGUMENT IS RAISED BEFORE US ALSO. ON THIS ASPECT, IT WAS HELD BY THE HONBLE BOMBAY H IGH COURT THAT THE TRIBUNAL HELD THAT THERE SHOULD BE UNIFORMITY IN TR EATMENT OF CONSISTENCY WHEN THE FACTS AND CIRCUMSTANCES ARE IDENTICAL, PAR TICULARLY IN THE CASE OF THE ASSESSEE AND THIS APPROACH OF THE TRIBUNAL CANN OT BE FAULTED. IN THE PRESENT CASE, WE HAVE SEEN THAT IN THE PRESENT YEAR , THE NUMBER OF TRANSACTIONS CARRIED OUT BY THE ASSESSEE ARE NUMERO US AND THERE IS BORROWING ALSO FOR THE PURPOSE OF PURCHASING THE SH ARES AND IT WAS NOT SHOWN BY THE ASSESSEE BEFORE US BY BRINGING ANY COG ENT MATERIAL ON RECORD THAT IN THE EARLIER AND LATER YEARS ALSO, TH ERE WERE NUMEROUS TRANSACTIONS AND BORROWINGS FOR THE PURCHASE OF SHA RES AND IN THE ABSENCE OF ANY MATERIAL HAVING BROUGHT ON RECORD BY THE ASS ESSEE TO SHOW SIMILARITY IN THE FACTS AND CIRCUMSTANCES, ON THIS ASPECT ALSO, THIS JUDGEMENT OF HONBLE BOMBAY HIGH COURT DOES NOT HEL P THE ASSESSEE. - THE NEXT JUDGMENT CITED BY THE LD. A.R. IS THE TR IBUNAL DECISION RENDERED IN THE CASE OF SUNIL KUMAR GANERIWAL (SUPR A). IN THAT CASE ALSO, THE TRIBUNAL HAS NOTED THAT VARIOUS FACTS ARE TO BE CONSIDERED TO DECIDE THE NATURE OF TRANSACTIONS WHETHER IT IS FOR TRADING OR INVESTMENT. SUCH RELEVANT FACTS NOTED BY THE TRIBUNAL ARE THE INTENT ION OF THE ASSESSEE AT THE TIME OF PURCHASE OF SHARES AND THE SUBSEQUENT CONDU CT AND TREATMENT OF TRANSACTIONS IN THE BOOKS OF ACCOUNT OF THE ASSESSE E. THE OTHER RELEVANT I.T.A.NO.139 /AHD/2011 I.T.A.NO. 769/AHD/2012 8 FACTORS NOTED BY THE TRIBUNAL ARE AS TO WHETHER THE ASSESSEE HAS BORROWED MONEY TO PURCHASE THE SHARES AND PAID INTEREST THER EON AND FURTHER THE FREQUENCY OF SUCH PURCHASE AND SALE OF SHARES IS AL SO AN IMPORTANT FACTOR TO JUDGE THE MOTIVE OF THE ASSESSEE. ONE MORE FACT OR IS NOTED BY THE TRIBUNAL THAT THE VALUATION OF SHARES AS TAKEN IN T HE BALANCE SHEET AT THE END OF THE YEAR IS THE RELEVANT FACTOR TO SEE THE I NTENTION. THEREAFTER, THERE IS FINDING GIVEN BY THE TRIBUNAL THAT FROM THE FACT S OF THAT CASE AS ANALYZED IN THE LIGHT OF VARIOUS GUIDELINES AND FACTORS NOTE D IN THE TRIBUNAL ORDER AND ALSO ENUMERATED BY THE CBDT IN CIRCULAR NO.4 OF 2007 DATED 15.6.2007 ONLY FAIR AND LOGICAL CONCLUSION ONE CAN DRAW IS THAT THE INTENTION OF THE ASSESSEE IS HOLDING OF SHARES AS I NVESTMENT AND NOT AS STOCK IN TRADE. IN THE PRESENT CASE ALSO, WE HAVE CONSIDERED ALL THESE GUIDING FACTORS AND THEREAFTER, WE HAVE COME TO THE CONCLUSION IN THE FACTS OF THE PRESENT CASE THAT IN THE PRESENT CASE, THE INTENTION OF THE ASSESSEE WAS NOT FOR INVESTMENT BUT FOR TRADING AND , THEREFORE, THIS JUDGEMENT IS ALSO OF NO HELP TO THE ASSESSEE IN THE PRESENT CASE BECAUSE THE FACTS OF EACH CASE HAS TO BE CONSIDERED AND TO BE DECIDED AS PER THE GUIDING FACTORS AS HAS BEEN DONE BY US IN THE PRESE NT CASE. - THE NEXT JUDGEMENT CITED BY HIM IS THE TRIBUNAL D ECISION RENDERED IN THE CASE OF D & M COMPONENTS LTD (SUPRA). IN TH AT CASE ALSO, THE TRIBUNAL HAS NOTED VARIOUS GUIDING FACTORS AND IT I S ALSO NOTED THAT NOT ONE OR TWO FACTORS WILL BE SUFFICIENT TO COME TO A DEFI NITE CONCLUSION BECAUSE CUMULATIVE EFFECT OF SEVERAL FACTORS HAS TO BE SEEN . IN THIS JUDGEMENT, IT IS ALSO NOTED BY THE TRIBUNAL THAT IT IS FOR THE ASSES SEE TO ADDUCE EVIDENCE TO SHOW THAT THERE IS HOLDING FOR INVESTMENT OR FOR TR ADING AND THE DISTINCTION HE HAS KEPT IN RECORD OR OTHERWISE BETWEEN TWO TYPE S OF HOLDINGS. IN THE PRESENT CASE ALSO, WE HAVE EXAMINED THE FACTS OF TH E PRESENT CASE ON THE BASIS OF VARIOUS GUIDELINES NOTED BY THE TRIBUNAL I N VARIOUS JUDGEMENTS CITED BY THE LD. A.R. AND, THEREFORE, THE ISSUE TO BE DECIDED BY US IS A I.T.A.NO.139 /AHD/2011 I.T.A.NO. 769/AHD/2012 9 FACTUAL ISSUE AND, THEREFORE, IT HAS TO BE DECIDED ON THE BASIS OF THE FACTS OF THE CASE AND NOT ON THE BASIS OF LEGAL PRONOUNCE MENTS ALONE AND WHEN WE HAVE EXAMINED THE FACTS OF THE PRESENT CASE IN T HE LIGHT OF VARIOUS GUIDING FACTORS NOTED BY THE TRIBUNAL IN THESE CASE S, WE HAVE COME TO A CONCLUSION THAT IN THE PRESENT CASE, THE TRANSACTIO NS UNDERTAKEN BY THE ASSESSEE IS NOT FOR INVESTMENT AND HENCE, THIS TRIB UNAL DECISION IS ALSO OF NO HELP TO THE ASSESSEE IN THE PRESENT CASE. - THE LAST JUDGEMENT CITED BY THE LD. A.R. IS THE T RIBUNAL DECISION RENDERED IN THE CASE OF MAHENDRA C SHAH (SUPRA). W E FIND THAT IN THIS CASE ALSO, SIMILAR GUIDING FACTORS ARE NOTED BY THE TRIBUNAL SUCH AS INTENTION OF THE ASSESSEE, NATURE OF COMMODITY, USE OF OWN MONEY OR BORROWED FUNDS, TREATMENT GIVEN IN THE BOOKS OF ACC OUNT, STAND TAKEN BY THE REVENUE AUTHORITIES IN RESPECT OF SALE PROCEEDS IN THE EARLIER YEARS, FREQUENCY AND VOLUME OF TRANSACTIONS, PERIOD OF HOL DING OF SHARES ETC. WE FIND THAT GUIDELINES ARE SIMILAR TO THE GUIDING FACTORS NOTED BY THE TRIBUNAL IN THE EARLIER JUDGEMENTS NOTED ABOVE AND WE HAVE ALREADY SEEN THAT WHEN THE FACTS OF THE PRESENT CASE ARE ANALYZE D IN THE LIGHT OF THESE GUIDING FACTORS, WE HAVE COME TO A CONCLUSION THAT THE ASSESSEES INTENTION WAS NOT FOR INVESTMENT BUT FOR DEALING IN SHARES AND, THEREFORE, THIS TRIBUNAL DECISION IS ALSO OF NO HELP TO THE AS SESSEE IN THE PRESENT CASE. 2.7 AS PER ABOVE DISCUSSION, WE HAVE SEEN THAT NONE OF THE JUDGEMENTS CITED BY THE LD. A.R. IS RENDERING ANY HELP TO THE ASSESSEE IN THE PRESENT CASE AND IN THE LIGHT OF THE FACTS OF THE PRESENT C ASE, WHERE NUMEROUS TRANSACTIONS ARE UNDERTAKEN BY THE ASSESSEE ALONE W ITH HIGH RATIO OF PURCHASE AND HOLDING OF SHARES, IT CANNOT BE SAID T HAT THE ASSESSEE IS PURCHASING THESE SHARE FOR INVESTMENT. REGARDING T HE ARGUMENT FOR CONSISTENCY, WE HAVE ALREADY NOTED THAT THE ASSESSE E COULD NOT DEMONSTRATE THAT THE FACTS OF THE PRESENT YEAR ARE IDENTICAL TO THE FACTS OF I.T.A.NO.139 /AHD/2011 I.T.A.NO. 769/AHD/2012 10 THOSE EARLIER OR LATER YEARS BY BRINGING COGENT MAT ERIAL ON RECORD TO SHOW THAT IN THOSE YEARS ALSO, THE TRANSACTION UNDERTAKE N BY THE ASSESSEE WERE NUMEROUS AS IN THE PRESENT CASE AND THERE WERE BORR OWINGS AND PAYMENT OF INTEREST IN THOSE YEARS ALSO AND HENCE, IN THE A BSENCE OF SUCH SIMILARITY IN THE FACTS, THIS ARGUMENT IS ALSO DEVOID OF ANY M ERIT. THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF LD . CIT(A). 2.8 IN THE RESULT, THIS APPEAL OF THE ASSESSEE IS D ISMISSED. 3. NOW, WE TAKE UP THE APPEAL OF THE ASSESSEE FOR T HE ASSESSMENT YEAR 2008-09 IN I.T.A.NO. 769/AHD/2012. THE GROUNDS RAI SED BY THE ASSESSEE IN THIS YEAR ARE AS UNDER: THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS OF TH E CASE BY CONFIRMING THE FINDINGS OF THE A.O. THAT SHORT TERM AS WELL AS LONG TERM CAPITAL GAIN OF RS.22,73,601/- ON SALE OF SHAR ES IS TO BE TAXED AS BUSINESS INCOME AND NOT UNDER THE HEAD CAPITAL G AIN. 3.1 IN THIS YEAR, THE FACTS ARE THAT THE ASSESSEE H AS UNDERTAKEN 62 TRANSACTIONS FOR WHICH THE ASSESSEE HAS DECLARED SH OT TERM CAPITAL GAIN AND THE ASSESSEE HAS ALSO UNDERTAKEN 45 TRANSACTION S FOR WHICH THE ASSESSEE HAS DECLARED LONG TERM CAPITAL GAIN. HENC E, IN THIS YEAR ALSO, THE NUMBER OF TRANSACTIONS UNDERTAKEN BY THE ASSESSEE A RE SUBSTANTIAL. NOW, WE EXAMINE THE RATIO OF PURCHASE AND HOLDING OF SHA RES AND, WE FIND THAT THE PURCHASES IN RESPECT OF SHORT TERM CAPITAL GAIN IS OF RS.50,07,419 AND THE PURCHASES FOR LONG TERM CAPITAL GAIN WAS OF RS .27,26,982/- TOTALING RS.77.43 LACS. SINCE THE AMOUNT OF SHARES SHOWN IN THE BALANCE SHEET AS INVESTMENT IS ONLY RS.82.77 LACS AND HENCE, IT IS S EEN THAT THE RATIO OF PURCHASE TO CLOSING STOCK IS ALMOST 1:1, WHICH IS V ERY HIGH TO ACCEPT THAT THE PURCHASES WERE MADE FOR THE PURPOSE OF INVESTME NT. REGARDING EXISTENCE OF BORROWED FUNDS IN THIS YEAR AND PAYMEN T OF INTEREST, WE FIND THAT THERE IS NO INTEREST EXPENDITURE IN THIS YEAR DEBITED IN THE P & L ACCOUNT AND IN FACT, THERE IS INTEREST INCOME DECLA RED IN THE PRESENT YEAR I.T.A.NO.139 /AHD/2011 I.T.A.NO. 769/AHD/2012 11 OF RS.4.48 LACS AND THERE IS THIS DIFFERENCE IN FAC TS IN THE PRESENT YEAR AS COMPARED TO THE FACTS IN THE ASSESSMENT YEAR 2006-0 7 BUT OTHERWISE THE FACTS ARE IDENTICAL AND HENCE, FOR THIS ONE DIFFERE NCE IN FACTS, IT CANNOT BE SAID THAT THE NATURE OF TRANSACTION HAS CHANGED. W E FEEL SO BECAUSE ABSENCE OF BORROWED FUNDS IS ABSENCE OF MINUS FACTO R AND NOT PRESENCE OF A PLUS FACTOR TO TILT THE BALANCE IN FAVOUR OF THE ASSESSEE BECAUSE IT IS NOT NECESSARY THAT FOR DOING BUSINESS, EXISTENCE OF BOR ROWED FUNDS IS A MUST. BUSINESS CAN BE DONE WITH OWN FUNDS ALSO. HENCE, T HIS FACTOR DOES NOT NEGATE THE OTHER MINUS FACTOR OF HIGH RATIO OF PURC HASE AND HOLDING AND NUMBER OF TRANSACTIONS BEING NUMEROUS. REGARDING T HIS CONTENTION THAT IN THIS YEAR, EVEN LONG TERM CAPITAL GAIN WAS ASSES SED AS BUSINESS INCOME, WE FIND THAT IN ASSESSMENT YEAR 2006-07, WE HAVE HE LD THAT SHORT TERM CAPITAL GAIN WAS BUSINESS INCOME AND ALL THE SHARES SOLD IN THE PRESENT YEAR FOR LONG TERM CAPITAL GAIN WERE PURCHASED IN A SSESSMENT YEAR 2006- 07 OR 2007-08. HENCE, WHEN THE SHARES WERE PURCHA SED IN ASSESSMENT YEAR 2006-07 WITH THE INTENTION OF DEALING IN SHARE S AS HELD BY US, THE PROFIT ON SALE OF SHARES HAS TO BE BUSINESS INCOME EVEN IF SOLD AFTER ONE YEAR. HENCE, THIS ARGUMENT IS ALSO DEVOID OF ANY M ERIT. THE ARGUMENTS OF BOTH THE SIDES WERE ALSO THE SAME FOR THIS YEAR ALSO AND HENCE, WE DO NOT FIND ANY GOOD REASON TO INTERFERE IN THE ORDER OF LD. CIT(A) IN THIS YEAR ALSO. 3.2 IN THE RESULT, THIS APPEAL OF THE ASSESSEE IS A LSO DISMISSED. 4. IN THE COMBINED RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE DISMISSED. 5. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE M ENTIONED HEREINABOVE. SD./- SD./- (G. C. GUPTA) (A. K. GARODIA) VICE PRESIDENT ACCOUNTANT MEMBER I.T.A.NO.139 /AHD/2011 I.T.A.NO. 769/AHD/2012 12 SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD 1. DATE OF DICTATION 01/11/2012 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 02/11/2012.OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 09/11/2012 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.9/11 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 09/11/2012 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. .