Babubhai Ramanlal Patel, Ahmedabad V. Dy. Commissioner of Income Tax, Ahmedabad

ITA 780/AHD/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8422 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 06-04-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Business income
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH AHMEDABAD BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO. 780/AHD/2015 (ASSESSMENT YEAR: 2010-11) BABUBHAI RAMANLAL PATEL DARSHAK, 14A SWASTIK SOCIETY, PUNJABI HALL GALI, NAVRANGPURA APPELLANT VS. DY. COMMISSIONER OF INCOME-TAX, CIRCLE -1, AHMEDABAD RESPONDENT PAN: ABYPP8048A /BY ASSESSEE : SHRI HIMANSHU SHAH, A.R. /BY REVENUE : SHRI MAHESH JIWADE , SR. D.R. /DATE OF HEARING : 04.09.2017 /DATE OF PRONOUNCEMENT : 22.09.2017 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2010-11 A RISES AGAINST THE CIT(A)-1, AHMEDABADS ORDER DATED 18 TH FEBRUARY, 2015, IN CASE NO. CIT(A)- VI/DCIT, CIR-1/14/2013-14, UPHOLDING ASSESSING OFFIC ERS ACTION TREATING SHORT TERM CAPITAL GAINS DERIVED FROM SALE OF SHARES AMOU NTING TO RS.17,18,613/- AS BUSINESS INCOME AS WELL AS IN DECLINING SET OFF OF LOSSES OF RS.21,576/- PERTAINING TO PRECEDING ASSESSMENT YEARS; RESPECTIV ELY, IN PROCEEDINGS U/S. 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE AC T. HEARD BOTH SIDES. CASE FILE PERUSED. ITA NO. 780/AHD/15 (BABUBHAI R. PATEL VS. DCIT) A.Y. 2010-11 - 2 - 2. WE COME TO THE FORMER ISSUE OF ASSESSEES PROFIT S DERIVED FROM SHARE TRANSACTIONS IN QUESTION INVOLVING A FIGURE OF RS.1 7,18,613/-. BOTHE THE LOWER AUTHORITIES ARE OF THE OPINION THAT THE ASSESSEE HA S ENTERED INTO ADVENTURE IN THE NATURE OF TRADE AND BUSINESS IN THE STOCK TRANSACTI ONS IN QUESTION. THE RELEVANT SHORT AND LONG TERM CAPITAL GAINS INVOLVE THE CORRE SPONDING FIGURES OF RS.17,18,613/- AND RS.89,661/-; RESPECTIVELY. BOTH THE LOWER AUTHORITIES TAKE INTO ACCOUNT ASSESSEES OPENING CAPITAL, SECURED/UN SECURED LOAN OPENING AND CLOSING BALANCE, INTEREST PAYMENT, NET INTEREST AFT ER ADJUSTMENT OF INTEREST EXPENDITURE, INTEREST PAID TO SHARE BROKERS AND OPE NING INVESTMENT IN SHARES AND SECURITIES TO HOLD ASSESSEES PROFITS IN THE NATURE OF BUSINESS INCOME. THEY FURTHER RELY UPON THEIR RESPECTIVE FINDINGS IN PREC EDING ASSESSMENT YEARS 2005- 06 TO 2009-10 IN TREATING ASSESSEES PROFITS IN QUE STION AS BUSINESS INCOME INSTEAD OF SHORT TERM CAPITAL GAINS. THIS LEAVES A SSESSEE AGGRIEVED. 3. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RI VAL SUBMISSIONS. IT HAS COME ON RECORD THAT BOTH THE LOWER AUTHORITIES ADOP T CONSISTENCY IN ARRIVING AT THE IMPUGNED CONCLUSION HOLDING THE ASSESSEE TO HAV E CARRIED OUT ADVENTURE IN THE NATURE OF TRADE IN SHARE TRANSACTIONS IN QUESTI ON. NO DISTINCTION ON FACTS IN SAID EARLIER OR THE IMPUGNED ASSESSMENT YEAR IS POI NTED OUT. THE ASSESSEE AT THIS STAGE FILE BEFORE US THIS TRIBUNALS SEPARATE ORDER S DATED 29.08.2006 HOLDING ITS SHARE PROFITS AS CAPITAL GAINS THEREBY REVERSING BO TH THE LOWER AUTHORITIES IDENTICAL FINDINGS. ANOTHER CO-ORDINATE BENCH IN A SSESSMENT YEAR 2009-10 HAS ALSO ADOPTED THE VERY REASONING IN ASSESSEES FAVOU R. LEARNED DEPARTMENTAL REPRESENTATIVE FAILS TO DISPUTE THESE CLINCHING DEV ELOPMENTS DURING PENDENCY OF THE EXTENT APPEAL. WE THEREFORE ADOPT JUDICIAL CON SISTENCY HEREIN AS WELL TO ACCEPT ASSESSEES FORMER SUBSTANTIVE GROUND. 4. THIS LEAVES US WITH LATTER ISSUE OF SET OFF OF LO SSES AMOUNTING TO RS.21,576/-. BOTH THE LEARNED REPRESENTATIVES FAIR LY STATE AT THE OUTSET THAT THE SAME IS IN THE NATURE OF A CONSEQUENTIAL AMOUNT REQ UIRING FACTUAL VERIFICATION IN ITA NO. 780/AHD/15 (BABUBHAI R. PATEL VS. DCIT) A.Y. 2010-11 - 3 - VIEW OF THIS TRIBUNALS EARLIER ORDERS (SUPRA). WE APPRECIATE THIS FAIR STAND. THE ASSESSING OFFICER IS DIRECTED TO FINALIZE CONSEQUEN TIAL COMPUTATION AS PER LAW. 5. THIS ASSESSEES APPEAL IS PARTLY ALLOWED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 22 ND DAY OF SEPTEMBER, 2017.] SD/- SD/- ( MANISH BORAD ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 22/09/2017 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 / GUARD FILE. BY ORDER / . // . /0