DCIT, Circle-12, Kolkata, Kolkata V. M/s Ritu Kumar, Kolkata

ITA 868/KOL/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3126 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2013
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 30-05-2012
• Court: TRIBUNAL
• Department Lawyers: A K MOHAPATRA
• Assessee Lawyers: D S DAMLE
• Keywords: Business income

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C , KOLKATA [ () . .. . . .. . , ,, , , ! ' #!' ' #!' ' #!' ' #!', ,, , ] ]] ] [BEFORE HONBLE SRI N.S.SAINI AM & HONBLE SRI M AHAVIR SINGH, JM] !% !% !% !% /ITA NO.868/KOL/2012 #& '(/ ASSESSMENT YEAR : 2006-07 (*+ / APPELLANT ) - - ( -.*+ /RESPONDENT) D.C.I.T., CIRCLE-12, RITU KUMAR KOLKATA -VERSUS- KOLKATA (PAN:AFLPK 3828 G) *+ / 0 / FOR THE APPELLANT: SHRI A.K.MOHAPATRA, CIT(DR) -.*+ / 0 / FOR THE RESPONDENT: SHRI D.S.DAMLE, FCA 1 2 / 3 /DATE OF HEARING : 12.06.2013 4' / 3 /DATE OF PRONOUNCEMENT : 18.06.2013. 5 / ORDER PER SHRI N.S.SAINI, AM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A)-XXX, KOLKATA DATED 31.01.2012. 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT THE TRANSACTIONS OF VOLUMINOUS AND FRE QUENT PURCHASE AND SALE OF SHARES IN A SYSTEMATIC MANNER RESULTING IN PROFIT AMOUNTIN G TO RS.72,04,217/- WAS TO BE TREATED AS CAPITAL GAIN AND NOT BUSINESS INCOME. 3 THE BRIEF FACTS OF THE CASE ARE THAT THE AO OBSER VED THAT THE ASSESSEE HAS BOUGHT AND SOLD SHARES AND UNITS AT REGULAR INTERVA LS DURING THE YEAR WHICH SHOWS THAT SHE IS ENGAGED IN A REGULAR BUSINESS ACTIVITY. HE F URTHER OBSERVED THAT THE COST OF SHARES AND UNITS PURCHASED DURING THE YEAR IS RS.3. 99 CRORES AND THE AMOUNT OF SALES OF SHARES AND UNITS WAS RS.4.72 CRORES WHICH CLEARLY S HOWS THAT LOOKING AT THE RETURN OF INCOME OF THE ASSESSEE THE SALE AND PURCHASE OF SHA RES AND UNITS ARE NOT INVESTMENT ACTIVITY. HE FURTHER OBSERVED THAT IN VIEW OF THE A BOVE FACTS AND THE DECISION AND IT A NO.868/KOL/2012 DCIT,CIRCLE-12, KOLKATA VS R ITU KUMAR A.YR.2006-07 2 GUIDELINES LAID DOWN IN CBDT INSTRUCTION NO.1827 DA TED 31.08.1989 THE CONTENTION OF THE ASSESEE IS REJECTED AND IT IS HELD THAT THE ASSESEE IS ENGAGED IN THE BUSINESS OF TRADING IN SHARES AND UNITS. CONSEQUENTLY THE INCOM E FROM TRANSACTIONS IN SHARES AND UNITS IS BEING COMPUTED ON THIS BASIS. 3.1. ON APPEAL THE LD. CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE HOLDING THAT THE PROFITS FROM PURCHASE AND SALES OF SHARES AND UNITS WAS TO BE TREATED AS CAPITAL GAINS AND NOT BUSINESS INCOME OF THE ASSESSEE BY OBSERVIN G AS UNDER :- 3. THE SUBMISSIONS OF THE APPELLANT HAVE BEEN CO NSIDERED AND IT IS SEEN THAT THE ISSUE WAS CONSIDERED IN THE APPELLANTS OWN CASE IN ASSES SMENT YEAR 2004-05 WHEREIN ON THE SAME FACTS THE CIT(A) HAD DIRECTED TO TREAT THE PRO FIT ON SALE OF SHARES AS LONG TERM CAPITAL GAINS/SHORT TERM CAPITAL GAINS AS DECLARED BY THE APPELLANT. IT IS FURTHER SEEN THAT THE ORDER OF CIT(A) WAS APPEALED AGAINST BEFOR E THE ITAT, KOLKATA. HOWEVER, THE HONBLE ITAT, B BENCH, KOLKATA IN ITA NO.653/KOL/20 11 FOR A.Y.2004-05 IN ITS ORDER DATED 13.01.2012 HAS CONFIRMED THE ORDER OF CIT(A) AND HELD THAT : AFTER HEARING THE RIVAL SUBMISSIONS AND KEEPING IN VIEW OF THE FACT THAT THE ASSESSEE HAS INVESTED IN SHARES, SECURITIES & UNITS IN THE PAST YEARS AS WELL. THE INVESTMENTS WERE MADE OUT OF OWN FUNDS. FROM THE BA LANCE SHEET AS OF 31 ST MARCH, 2002 & 2003 YOUR HONOUR WILL NOTE THAT THE ASSESSEE S INVESTMENTS FROM OWN FUNDS WERE RS.93,30,065/- & RS.1,39,92,543/- AND IN THE A SSESSMENT FOR THE RELEVANT PERIOD; ASSESSEE WAS NOT REGARDED AS DEALER IN SHARES. IN T HE ASSESSMENT YEARS 2002-03 & 2003-04 THE ASSESSEE EARNED DIVIDEND OF RS.16,419/- & RS.23,652/- AND CAPITAL LOSSES ON TRANSFER OF SHARES & UNITS WERE RS.52,49,976/- & RS.5,11,788/- RESPECTIVELY. IN THE INCOME TAX ASSESSMENT FOR ASSESSMENT YEARS 2002-03 & 2003-04, THE GAINS RECEIVED ON TRANSFER OF SHARES & UNITS WERE ASSESSED AS CAPI TAL GAINS AND NOT AS PROFITS & GAINS OF BUSINESS. KEEPING IN VIEW OF THE FACT THAT IN THE IMPUGNED ORDER THE ASSESSING OFFICER IS NOT JUSTIFIED IN TREATING THE ASSESSEE A S DEALER IN SHARES AND SECURITIES. THEREFORE, WE FIND NO INFIRMITY IN THE ORDER OF LD. CIT(A) TO BE INFERRED WITH. HENCE, WE CONFIRM THE SAME AND DISMISS THE GROUND RAISED B Y THE REVENUE. THEREFORE, FOLLOWING THE ABOVE DECISION OF HONBLE ITAT IN THE CURRENT ASSESSMENT YEAR I.E. 2006-07 ALSO WHERE THERE IS NO CHANGE IN FACTS FROM ASSESSMENT YEAR 2004-0, IT IS HELD THAT THE PROFIT ON SALE OF SHARES SHOULD BE TR EATED AS LONG TERM CAPITAL GAIN/SHORT TERM CAPITAL GAINS AS DECLARED BY THE APPELLANT AND NOT BUSINESS INCOME TAKEN BY THE A.O. 4. THE LD. DR RELIED ON THE ORDER OF THE AO WHEREAS THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE LD. CIT(A) HAS ALLOWED THE APPEA L OF THE ASSESSEE BY FOLLOWING THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A. YR.2004-05 IN ITA NO.653/KOL/2011 ORDER DATED 13.01.2012 . HE THEREFO RE SUBMITTED THAT THE APPEAL OF THE REVENUE SHOULD BE DISMISSED. IT A NO.868/KOL/2012 DCIT,CIRCLE-12, KOLKATA VS R ITU KUMAR A.YR.2006-07 3 5. AFTER HEARING THE RIVAL SUBMISSIONS AND PERUSING THE ORDERS OF THE LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD WE FI ND THAT THE UNDISPUTED FACTS OF THE CASE ARE THAT THE AO OBSERVED THAT THE ASSESSEE HAS DONE VOLUMINOUS AND FREQUENT TRANSACTIONS IN SHARES AND THEREFORE IN VIEW OF THE CBDT INSTRUCTION NO.1827 DATED 31.08.1989 THE PROFITS FROM TRANSACTIONS AND SHARES AND UNITS OF THE ASSESSEE ARE TREATED AS BUSINESS PROFITS IN PLACE OF CAPITAL GAI NS SHOWN BY THE ASSESSEE. ON APPEAL THE LD. CIT(A) BY FOLLOWING THE ORDER OF THE TRIBU NAL PASSED IN A.YR.2004-05 IN ASSESSEES OWN CASE IN ITA NO.653/KOL/2011 ORDER DA TED 13.01.2012 ALLOWED THE APPEAL OF THE ASSESSEE BY HOLDING THAT THE PROFITS FROM SALE AND PURCHASE OF SHARES AND UNITS ARE TO BE TREATED AS CAPITAL GAINS OF THE ASS ESSEE. THE LD. DR COULD NOT POINT OUT ANY SPECIFIC ERROR IN THE ORDER OF THE LD. CIT(A). HE COULD NOT BRING ANY MATERIAL ON RECORD TO SHOW THAT THIS ORDER OF THE TRIBUNAL WAS VARIED IN APPEAL BY ANY OTHER HIGHER AUTHORITY. NO DISTINGUISHABLE FEATURES ALSO COULD NOT BE POINTED OUT BY THE LD. DR. IN ABSENCE OF ANY MATERIAL BROUGHT ON RECORD WE DO NOT FIND ANY GOOD AND JUSTIFIABLE REASON TO INTERFERE WITH THE ORDER OF T HE LD. CIT(A) WHICH IS CONFIRMED AND THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 6. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18.06.2013 SD/- SD/- [ .' #!' , ] [ .., ,, , ] [MAHAVIR SINGH ] [N.S.SAINI] JUDICIAL MEMBER ACCOUNTANT MEMBER ( (( (3 3 3 3) )) ) DATE: 18.06.2013. R.G.(.P.S.) IT A NO.868/KOL/2012 DCIT,CIRCLE-12, KOLKATA VS R ITU KUMAR A.YR.2006-07 4 5 / -##6 76'8- COPY OF THE ORDER FORWARDED TO: 1. RITU KUMAR, 138, BELIAGHATA ROAD, KOLKATA-700015. 2 D.C.I.T., CIRCLE-12, KOLKATA 3 . CIT KOLKATA 4. CIT (A)-XXX, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. .6 -#/ TRUE COPY, 51/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES