Ajinkya Electromelt Pvt. Ltd., Pune V. Deputy Commissioner of Income-tax,

ITA 891/PUN/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1628 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 12-06-2018
• Assessment Year: 2007-2008
• Appeal Filed On: 04-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K VERMA
• Assessee Lawyers: R G NAHAR
• Keywords: Business income; Question of law
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO. 891 /P U N/20 16 / ASSESSMENT YEAR : 20 07 - 08 AJINKYA ELECTROMELT PVT. LTD., KHANDELWAL JAIN & ASSOCIATES, ALANKAR CINEMA BUILDING, 1 ST FLOOR, ABOVE UNITED BANK, PUNE 411001 . / APPELLANT PAN: AA BCA5142M VS. THE DY . COMMISSIONER OF INCOME TAX, CIRCLE - 8 , PUNE . / RESPONDENT ASSESSEE BY : S HRI R.G. NAHAR REVENUE BY : SHRI M.K. VERMA / DATE OF HEARING : 2 8 . 0 8 .201 8 / DATE OF PRONOUNCEMENT: 30 . 0 8 .201 8 / ORDER PER SUSHMA CHOWLA, JM: THE APPEAL FILED BY THE ASSESSEE IS AGAINST ORDER OF CIT(A) - 9 , PUNE , DATED 11 .0 3 .20 16 RELATING TO ASSESSMENT YEAR 20 07 - 08 AGAINST ORDER PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961 (IN SHORT THE ACT). 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUND OF APPEAL: - 2 ITA NO. 891 /PUN/20 16 AJINKYA ELECTROMELT PVT. LTD. 1. ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE AND AS PER PROVISIONS & SCHEME OF THE ACT IT BE HELD THAT, THE AMOUNT OF RS.22,90,531/ - CONSIDERED BY THE ASSESSING OFFICER AS ASSESSABLE UNDER THE HEAD INCOME FROM BUSINESS IS CONTRARY TO THE PROVISIONS OF THE ACT & FACTS PREVAILING IN THE CASE. THE INCOME OF RS.22,90,531/ - SHOULD HAVE BEEN ASSESSED UNDER THE HEAD CAPITAL GAIN AS CLAIMED & DECLARED BY THE APPELLANT. JUST IN PROPER RELIEF BE GRANTED TO THE APPELLANT IN THIS RESPECT. 3. THE ISSUE RAISED IN THE PRESENT APPEAL IS AGAINST ASSESSABILITY OF GAIN ARISING ON SALE OF SHARES AS INCOME FROM BUSINESS AS HELD BY THE AUTHORITIES BELOW OR INCOME FROM SHORT TERM CAPITAL GAINS, AS DECLARED BY THE ASSESSEE. 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE WAS TRADING IN STEEL PRODUCTS AND THE TOTAL TURNOVER FROM SUCH ACTIVITY WAS 37.67 CRORES. THE ASSE SSEE WAS ALSO INVESTING IN SHARES FROM YEAR TO YEAR AND WAS DECLARING THE SAID INVESTMENT IN THE BALANCE SHEET UNDER THE HEAD INVESTMENT. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD DECLARED INCOME FROM LONG TERM CAPITAL GAINS OF 6,43,692/ - AND INCOME FROM SHORT TERM CAPITAL GAINS ON SALE OF SHARES AT 22,90,532/ - . THE PLEA OF ASSESSEE BEFORE THE ASSESSING OFFICER AND THE CIT(A) WAS THAT THE SHARES WERE HELD AS INVESTMENTS AND THE PHYSICAL DELIVERY OF THE SAID SHARES WAS RECEIVED AND G IVEN; STT WAS PAID ON THE SAID TRANSACTIONS AND THE INCOME THEREFROM WAS OFFERED UNDER THE HEAD INCOME FROM SHORT TERM CAPITAL GAINS. THE ASSESSEE ALSO POINTED OUT THAT FROM THE SAME POOL OF INVESTMENT ACCOUNT, CERTAIN TRANSACTIONS GAVE RISE TO LONG TER M CAPITAL GAINS. THE ASSESSING OFFICER ACCEPTED THE INCOME OFFERED UNDER THE HEAD INCOME FROM LONG TERM CAPITAL GAINS. HOWEVER, IN RESPECT OF SHARES SOLD WHICH WERE DECLARED AS SHORT TERM CAPITAL GAINS, THE ASSESSING OFFICER TREATED THE SAME AS INCOME FROM BUSI N ESS. THE REASON FOR NON - ACCEPTING THE CLAIM OF ASSESSEE WAS THAT ON IDENTICAL FACTS IN ASSESSMENT YEARS 2005 - 06 AND 2006 - 07, THE CIT(A) HAD 3 ITA NO. 891 /PUN/20 16 AJINKYA ELECTROMELT PVT. LTD. DECIDED THE ISSUE AGAINST ASSESSEE. THE ASSESSING OFFICER THUS, TREATED THE GAIN OF 22,90,531/ - AS INCOME FROM BUSINESS. 5. THE CIT(A) DECIDED THE SAID ISSUE AGAINST ASSESSEE FOLLOWING THE ORDER OF TRIBUNAL IN ITA NO.1519/PN/2008, RELATING TO ASSESSMENT YEAR 2005 - 06, ORDER DATED 30.07.2010. THE FINDING OF TRIBUNAL IN PARA 13 HAS BEEN REPRODUCED BY T HE CIT(A). 6. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 7. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE AT THE OUTSET POINTED OUT THAT THE APPEAL OF ASSESSEE ON SIMILAR ISSUE WAS DECIDED, AGAINST WHICH THE ASSESSEE HAD FILED AN APP EAL BEFORE THE HONBLE BOMBAY HIGH COURT, WHICH HAS BEEN ADMITTED IN APPEAL NO.104 OF 2011, DATED 04.01.2012. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FURTHER POINTED OUT THAT THE ASSESSEE WAS MAKING INVESTMENT IN SHARES OVER A LONG PERIOD O F TIME WHICH WAS DECLARED AS SUCH IN THE BALANCE SHEET. HOWEVER, THE INCOME DECLARED UNDER THE HEAD LONG TERM CAPITAL GAINS WAS ACCEPTED BY THE DEPARTMENT IN ASSESSMENT YEAR 2005 - 06 BUT THE GAIN ARISING ON SHORT TERM CAPITAL GAINS WAS TREATED AS INCO ME FROM BUSINESS. HE FURTHER POINTED OUT THAT THE ASSESSEE HAD PLACED RELIANCE ON THE DECISION OF MUMBAI BENCH OF TRIBUNAL IN THE CASE OF GOPAL PUROHIT REPORTED IN 128 TTJ 87 (MUM), WHICH HAS BEEN CONFIRMED BY THE HONBLE BOMBAY HIGH COURT REPORTED IN 33 6 ITR 287 (BOM) AND ALSO OTHER DECISIONS WHICH ARE MENTIONED IN PARA 8 AT PAGE 7 OF THE ORDER OF TRIBUNAL ; BUT WHILE DECIDING THE ISSUE, RATIO LAID DOWN BY THE SAID DECISIONS HAVE NOT BEEN CONSIDERED. IN THIS REGARD, HE REFERRED TO THE RECENT DECISION OF THE HONBLE BOMBAY HIGH COURT IN WRIT PETITION NO. 1833 OF 2018 IN AMORE JEWELS PVT. LTD. 4 ITA NO. 891 /PUN/20 16 AJINKYA ELECTROMELT PVT. LTD. VS. DCIT, JUDGMENT DATED 03.08.2018 AND POINTED OUT THAT SUCH NON - CONSIDERATION OF THE DECISION OF JURISDICTIONAL HIGH COURT MAKES THE ORDER INVALID. ANOTHER POINT WH ICH WAS RAISED BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE WAS THAT THE DEPARTMENT HAD INCONSISTENT APPROACH IN TAXING GAIN ARISING ON SALE OF SHARES, WHEREIN THE LONG TERM CAPITAL GAINS FROM THE SAME POOL OF INVESTMENT WAS ACCEPTED BUT THE S HORT TERM CAPITAL GAINS ARISING WAS TREATED AS INCOME FROM BUSINESS. HE MADE REFERENCE TO THE DETAILS OF SHARE TRANSACTIONS WHICH WERE FILED BEFORE THE AUTHORITIES BELOW, COPY OF WHICH IS PLACED AT PAGES 43 TO 52 OF PAPER BOOK AND POINTED OUT THAT SOME OF THE SHARES WHICH WERE SOLD BY THE ASSESSEE WERE PURCHASED IN THE PRECEDING YEAR AND WERE DECLARED AS INVESTMENT BY THE ASSESSEE. HE POINTED OUT THAT OUT OF TOTAL SHORT TERM CAPITAL GAINS OF 22,90,531/ - , MAJOR GAIN WAS ON SALE OF SHARES OF HINDUSTAN Z INC LTD., WHICH WERE PURCHASED IN THE MONTH OF OCTOBER, 2005 FOR TOTAL CONSIDERATION OF 5,39,449/ - AND WERE SOLD ON 11.05.2006 FOR SUM OF 24,63,168/ - , RESULTING IN GAIN OF 19,23,718/ - . HE ALSO REFERRED TO OTHER SHARES SIMILARLY SHOWN AS INVESTMENT IN THE PRECEDING YEAR, WHICH WERE SOLD DURING THE YEAR. ANOTHER ASPECT POINTED OUT BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE WAS THAT EVEN THE CBDT HAS RECOGNIZED DIFFERENT APPROACH /S OF THE DEPARTMENT AND VIDE CIRCULAR DATED 29.02.2016 HA S CLARIFIED THAT PRAGMATIC VIEW SHOULD BE TAKEN ON THE ISSUE AND WHERE THE ASSESSEE HAS DECLARED THE SAME AS CAPITAL GAINS, THE SAME MAY NOT BE DISTURBED. HE POINTED OUT THAT WHEN THE TRIBUNAL HA D DECIDED THE MATTER RELATING TO ASSESSMENT YEAR 2005 - 06, TH E SAID CIRCULAR WAS NOT AVAILABLE. HE ALSO POINTED OUT THAT THE ISSUE IS ALSO COVERED BY THE DECISION OF JURISDICTIONAL HIGH COURT IN THE APPEAL FILED BY THE REVENUE IN THE CASE OF CIT VS. GOPAL PUROHIT (SUPRA), WHEREIN SLP HAS BEEN DISMISSED BY THE APEX COURT. HE AGAIN POINTED OUT THAT THE TRIBUNAL WHILE DECIDING THE ISSUE 5 ITA NO. 891 /PUN/20 16 AJINKYA ELECTROMELT PVT. LTD. THOUGH REFERRED TO THE ARGUMENT OF ASSESSEE VIS - - VIS CASE OF CIT VS. GOPAL PUROHIT (SUPRA) BUT NO DISCUSSION HAS BEEN MADE ON THE SAID RATIO. HE STRESSED THAT THE DECISION OF THE TRI BUNAL IN SUCH CIRCUMSTANCES REQUIRES RE - CONSIDERATION. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE ALSO FILED WRITTEN NOTE MENTIONING THAT VARIOUS DECISIONS OF PUNE BENCH HAVE DECIDED THE ISSUE CONSEQUENT TO THE CBDT CIRCULAR. 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HAND, POINTED OUT THAT FACTS IN PRESENT APPEAL ARE SIMILAR TO THE FACTS IN ASSESSMENT YEAR 2005 - 06 , WHEREIN THE TRIBUNAL HAS ALREADY TAKEN A DECISION AND THUS, HE HEAVILY RELIED ON THE SA ME. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE WHICH ARISES IN THE PRESENT APPEAL IS IN RESPECT OF ASSESSABILITY OF GAIN ARISING ON SALE OF SHARES. THE ASSESSEE IS MAJORLY INVOLVED IN TRADING IN STEEL PRODUCTS. HOWEVER, CERTAIN FUNDS AVAILABLE WITH THE ASSESSEE WERE ALSO INVESTED IN SHARES. THE ASSESSEE HAS DECLARED SUCH INVESTMENTS IN THE BALANCE SHEET UNDER THE SCHEDULE NO.4 UNDER THE HEAD INVESTMENT WHICH COMPRISED OF TWO PARTS I.E. NON - QUOTED INVESTMENT OF ABOUT 1.32 CRORES AND QUOTED INVESTMENT OF 4.91 CRORES. IT MAY ALSO BE POI NTED OUT THAT THE TOTAL TURNOVER OF ASSESSEE FROM THE BUSINESS ACTIVITY FOR THE YEAR UNDER CONSIDERATION WAS ABOUT 48.63 CRORES AND ALSO OTHER RECEIPTS OF ABOUT 72 LAKHS. THE ASSESSEE COMPANY HAS SHOWN PROFIT BEFORE TAXATION AT 4.85 CRORES ; COPY OF THE BALANCE SHEET, PROFIT AND LOSS ACCOUNT AND S C H EDULES ARE PLACED AT PAGES 25 - A TO 31 OF PAPER BOOK. THE ASSESSEE HAS ALSO PLACED ON RECORD THE DETAILED BREAK - UP OF SALE OF SHARES SCRIP - WISE FOR THE YEAR UNDER CONSIDERATION AND HAS ALSO POINTED OUT THAT WHETHER THE GAIN IS SHORT TERM CAPITAL GAIN OR LONG TERM CAPITAL GAIN. THE PERUSAL OF THE SAID 6 ITA NO. 891 /PUN/20 16 AJINKYA ELECTROMELT PVT. LTD. DETAILS SHOWS THAT CERTAIN SHARES WHICH HAVE BEEN SOLD DURING THE YEAR AND THE GAIN ARISING FROM WHICH IS SHORT TERM CAPITAL GAIN WERE ACQUIRED IN THE PRECEDIN G YEAR. THE PERUSAL OF DETAILED LIST REFLECTS THE FOLLOWING INVESTMENTS BEING MADE IN THE EARLIER YEAR: - A) BANK OF MAHARASHTRA - GAIN OF 13,658/ - B) ELECTROSTEEL CASTINGS INDIA - GAIN OF 7,316/ - C) FINOLEX INDUSTRIES LTD. - GAIN OF 5,337/ - D ) HINDUSTAN ZINC LTD. - GAIN OF 19,23,718/ - E) JAYSYNTH DYES LTD. - GAIN OF 13,878/ - F) KARUNA CABLE - GAIN OF 5,431/ - G) TATA SPONGE LTD. - LOSS OF 20,463/ - 10. IN ADDITION, THE ASSESSEE HAS ALSO ACQUIRED AND SOLD CERTAIN SHARES DURING THE YEAR ITSELF, AGAINST WHICH SHORT TERM CAPITAL GAINS HAS BEEN DECLARED. HOWEVER, OUT OF TOTAL GAIN OF ABOUT 23 LAKHS, GAIN OF 19.23 LAKHS IS FROM ONE SCRIP I.E. HINDUSTAN ZI NC LTD. ACQUIRED BY THE ASSESSEE IN THE PRECEDING YEAR. THE PERUSAL OF THE LIST OF INVESTMENTS OF QUOTED SHARES REFLECT THE SAID INVESTMENTS BEING BROUGHT FORWARD FROM THE PRECEDING YEAR AT 5,39,449/ - AND CLOSING BALANCE AS ON 31.03.2007 IS NIL. THE IN VESTMENTS SHOWN BY THE ASSESSEE IN ITS BALANCE SHEET HA VE BEEN ACCEPTED AS SUCH BY THE DEPARTMENT AND THE POSITION HAS NOT BEEN DISTURBED. IT MAY BE POINTED OUT THAT THE TRIBUNAL IN ASSESSMENT YEAR 2005 - 06 HA D TAKEN A STAND AGAINST THE ASSESSEE IN ASSESSI NG INCOME FROM SHORT TERM CAPITAL GAINS UNDER THE HEAD INCOME FROM BUSINESS. IF THAT BE THE POSITION, THE ASSESSING OFFICER WHILE COMPLETING ASSESSMENT FOR THE YEAR UNDER CONSIDERATION SHOULD HAVE ALSO CONSIDERED THE 7 ITA NO. 891 /PUN/20 16 AJINKYA ELECTROMELT PVT. LTD. DECLARATION OF ASSESSEE UNDER THE HE AD INVESTMENT IN ITS BALANCE SHEET; BUT THE SAME HAS NOT BEEN DISTURBED BY THE ASSESSING OFFICER. 11. ANOTHER ASPECT WHICH NEEDS TO BE KEPT IN MIND IS THE CIRCULAR NO.6/2016 ISSUED BY THE CBDT ON 29.02.2016. THE CBDT TOOK NOTE OF THE COURTS HAVING LAID DOWN DIFFERENT PARAMETERS TO DISTINGUISH THE SHARES HELD AS INVESTMENT FROM THE SHARES HELD AS STOCK - IN - TRADE. IT ALSO TOOK NOTE OF THE DISPUTES WHICH CONTINUE TO EXIST ON THE APPLICATION OF SAID PRINCIPLES, SINCE THE TAX PAYERS FOUND DIFFICULT Y TO PROVE THE INTENTION IN ACQUIRING THE SHARES / SECURITIES. IN THIS BACKGROUND , THE CBDT IN ORDER TO DECIDE THE CHARACTER OF INCOME FROM SALE OF SHARES AND SECURITIES I.E. WHETHER THE SAME WAS CAPITAL GAIN OR BUSINESS INCOME AND IN ORDER TO REDUCE LITIGATION AND UNCERTAINTY IN THE MATTER, FURTHER INSTRUCTED THAT THE ASSESSING OFFICERS IN HOLDING WHETHER THE SURPLUS GENERATED FROM SALE OF LISTED SHARES OR OTHER SECURITIES WOULD BE TREATED AS CAPITAL GAIN OR BUSINESS INCOME SHALL TAKE INTO ACCOUNT THE FOLLOWING: - A ) WHERE THE ASSESSEE ITSELF, IRRESPECTIVE OF THE PERIOD OF HOLDING THE LISTED SHARES AND SECURITIES, OPTS TO TREAT THEM AS STOCK - IN - TRADE, THE INCOME ARISING FROM TRANSFER OF SUCH SHARES/SECURITIES WOULD BE TREATED AS ITS BUSINESS INCOME; B) IN RESPECT OF LISTED SHARES AND SECURITIES HELD FOR A PERIOD OF MORE THAN 12 MONTHS IMMEDIATELY PRECEDING THE DATE OF ITS TRANSFER, IF THE ASSESSEE DESIRES TO TREAT THE INCOME ARISING FROM THE TRANSFER THEREOF AS CAPITAL GAIN, THE SAME SHALL NOT BE PUT TO DISPUTE BY TH E ASSESSING OFFICER. HOWEVER, THIS STAND, ONCE TAKEN BY THE ASSESSEE IN A PARTICULAR ASSESSMENT YEAR, SHALL REMAIN APPLICABLE IN SUBSEQUENT ASSESSMENT YEARS ALSO AND THE TAXPAYERS SHALL NOT BE ALLOWED TO ADOPT A DIFFERENT/CONTRARY STAND IN THIS REGARD IN S UBSEQUENT YEARS; C) IN ALL OTHER CASES, THE NATURE OF TRANSACTION (I.E. WHETHER THE SAME IS IN THE NATURE OF CAPITAL GAIN OR BUSINESS INCOME) SHALL CONTINUE TO BE DECIDED KEEPING IN VIEW THE AFORESAID CIRCULARS ISSUED BY THE CBDT. 12. VARIOUS BENCHES OF TRIBUNAL THEREAFTER HAVE DECIDED THE ISSUE OF ASSESSABILITY OF GAIN ARISING ON SALE OF SHARES FOLLOWING THE SAID PRINCIPLES. IT 8 ITA NO. 891 /PUN/20 16 AJINKYA ELECTROMELT PVT. LTD. MAY ALSO BE POINTED OUT THAT THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. GOPAL PUROHIT (SUPRA) HAD ALSO DECIDED SIMIL AR ISSUE AND HELD AS UNDER: - 2. THE TRIBUNAL HAS ENTERED A PURE FINDING OF FACT THAT THE ASSESSEE WAS ENGAGED IN TWO DIFFERENT TYPES OF TRANSACTIONS. THE FIRST SET OF TRANSACTIONS INVOLVED INVESTMENT IN SHARES. THE SECOND SET OF TRANSACTIONS INVOLVED DEALING IN SHARES FOR THE PURPOSES OF BUSINESS (DESCRIBED IN PARAGRAPH 8.3 OF THE JUDGMENT OF THE TRIBUNAL AS TRANSACTIONS PURELY OF JOBBING WITHOUT DELIVERY). THE TRIBUNAL HAS CORRECTLY APPLIED THE PRINCIPLE OF LAW IN ACCEPTING THE POSITION THAT IT IS OPE N TO AN ASSESSEE TO MAINTAIN TWO SEPARATE PORT FOLIOS, ONE RELATING TO INVESTMENT IN SHARES AND ANOTHER RELATING TO BUSINESS ACTIVITIES INVOLVING DEALING IN SHARES. THE TRIBUNAL HELD THAT THE DELIVERY BASED TRANSACTIONS IN THE PRESENT CASE, SHOULD BE TREAT ED AS THOSE IN THE NATURE OF INVESTMENT TRANSACTIONS AND THE PROFIT RECEIVED THERE FROM SHOULD BE TREATED EITHER AS SHORT TERM OR, AS THE CASE MAY BE, LONG TERM CAPITAL GAIN, DEPENDING UPON THE PERIOD OF THE HOLDING. A FINDING OF FACT HAS BEEN ARRIVED AT B Y THE TRIBUNAL AS REGARDS THE EXISTENCE OF TWO DISTINCT TYPES OF TR A NSACTIONS NAMELY, THOSE BY WAY OF INVESTMENT ON ONE HAND AND THOSE FOR THE PURPOSES OF BUSINESS ON THE OTHER HAND. QUESTION (A) ABOVE, DOES NOT RAISE ANY SUBSTANTIAL QUESTION OF LAW. 13. THE SLP FILED BY THE REVENUE HAS BEEN DISMISSED BY THE HON'BLE SUPREME COURT VIDE JUDGMENT DATED 15.11.2010 . 14. IN THE ENTIRETY OF THE ABOVE SAID DEVELOPMENTS IN LAW AND ALSO RECOGNITION OF DISPUTES BY THE CBDT AND THE CONSEQUENT CIRCULAR PASSED BY IT O N 29.02.2016, THERE IS A NEED TO RE - LOOK AT THE DECISION OF THE TRIBUNAL WHICH HAS BEEN PASSED IN ASSESSEES OWN CASE IN ASSESSMENT YEAR 2005 - 06. BEFORE WE TAKE RE - LOOK AT THE SAID DECISION, IT MAY BE POINTED OUT THAT THE ASSESSEE WA S MAINTAINING ONE POOL OF INVESTMENTS AND THE GAIN ARISING UNDER THE HEAD LONG TERM CAPITAL GAINS HA D BEEN ACCEPTED PERSE AND HA D NOT BEEN DISTURBED IN ANY OF THE YEARS. IT IS ONLY THE GAIN WHICH HAS BEEN DECLARED UNDER THE HEAD INCOME FROM SHORT TERM CAPITAL GAINS WHICH WA S DISTURBED IN ASSESSMENT YEAR 2005 - 06 AND FOLLOWING THE EARLIER ORDER , IN ASSESSMENT YEAR 2007 - 08 I.E. IN THE INSTANT ASSESSMENT YEAR BEFORE US. ONCE THE CBDT RECOGNIZES LITIGATION ARISING BECAUSE OF NON - CONSISTENT STAND BEING TAKEN BY THE REVENUE AUTHOR ITIES AND GUIDELINES HAVE BEEN ISSUED THOUGH IN 2016 BUT SUCH GUIDELINES ARE TO BE 9 ITA NO. 891 /PUN/20 16 AJINKYA ELECTROMELT PVT. LTD. APPLIED WHILE DECIDING THE ISSUES WHICH ARE PENDING. IN SUCH CIRCUMSTANCES, THE CIT(A) WHILE DECIDING THE APPEAL ON 11.03.2016 SHOULD HAVE CONSIDERED THE GUIDELINES ATLEAST . IN VIEW OF THE GUIDELINES AND THE DISPUTE BEING SETTLED BY THE JURISDICTIONAL HIGH COURT AND VARIOUS BENCHES OF TRIBUNAL, WHERE THE ASSESSEE WA S SHOWING ITS POOL OF SHARES AS INVESTMENT IN ITS HANDS AND MAKING DECLARATION IN THIS REGARD IN THE BALANCE SHEET FROM YEAR TO YEAR, SUCH POSITION SHOULD NOT BE DISTURBED. EVEN THE CBDT HAS GUIDED OFFICERS THAT THE POSITION SHALL NOT BE PUT TO DISPUTE BY THE ASSESSING OFFICER. IT FURTHER GOES ON TO STATE THAT ONCE THE STAND HAS BEEN TAKEN BY THE ASSESSEE IN A PARTICULAR ASSESSMENT YEAR, THEN THE SAME SHALL REMAIN APPLICABLE IN SUBSEQUENT ASSESSMENT YEARS ALSO. 15. THE ASSESSEE BEFORE US HAS CONSISTENT LY TAKEN A STAND AND THE STAND OF ASSESSEE W AS PARTIALLY ACCEPTED, WHEREIN THE INCOME FROM LONG TERM CAPITAL GAINS HAS BEEN ASSESSED AS SUCH. IN RESPECT OF SHORT TERM CAPITAL GAINS ARISING DURING THE YEAR, AS POINTED OUT IN THE PARAS HEREINABOVE, MAJOR PO RTION OF GAIN IS ON ACCOUNT OF SALE OF ONE SCRIP I.E. HINDUSTAN ZINC LTD. WHICH WERE ACQUIRED IN THE PRECEDING YEAR, WAS DECLARED AS INVESTMENT IN THE PRECEDING YEAR AND WAS NOT DISTURBED BY THE ASSESSING OFFICER AND HENCE, IN SUCH CIRCUMSTANCES, INCOME DE CLARED BY THE ASSESSEE UNDER THE HEAD INCOME FROM SHORT TERM CAPITAL GAINS MERITS TO BE ACCEPTED AS SUCH. ACCORDINGLY , WE FIND NO MERIT IN THE ORDER S OF AUTHORITIES BELOW AND THE SAME ARE REVERSED. 16. ONE ANOTHER ASPECT WHICH NEEDS TO BE KEPT IN MIND IS THE GUIDING FORCE OF THE JURISDICTIONAL HIGH COURT. THE ASSESSEE IN ASSESSMENT YEAR 2005 - 06 BEFORE THE TRIBUNAL HAD REFERRED TO THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF GOPAL PUROHIT (SUPRA) AND POINTED OUT THAT THE FACTUAL ASPECTS WERE SAME, WHICH HAS BEEN SO NOTED BY THE TRIBUNAL IN PARA 8. HOWEVER, WHILE 10 ITA NO. 891 /PUN/20 16 AJINKYA ELECTROMELT PVT. LTD. DECIDING THE ISSUE THE TRIBUNAL HAS FAILED TO TAKE COGNIZANCE OF THE SAID DECISION, WHICH IS BINDING ON THE TRIBUNAL. SUCH NON - CONSIDERATION OF BINDING DECISION MAKES THE DECISI ON OF TRIBUNAL TO BE NON - SPEAKING ORDER, AS HELD BY THE JURISDICTIONAL HIGH COURT IN AMORE JEWELS PVT. LTD. VS. DCIT (SUPRA). ACCORDINGLY, WE REVERSE THE ORDER OF CIT(A) AND DIRECT THE ASSESSING OFFICER TO ASSESS THE GAIN ARISING FROM SALE OF SHARES AS SH ORT TERM CAPITAL GAINS. THE GROUND OF APPEAL RAISED BY THE ASSESSEE IS THUS, ALLOWED. 1 7 . IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 3 0 T H DAY OF AUGUST , 201 8 . SD/ - SD/ - (ANIL CHATURVEDI) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 3 0 T H AUGUST , 201 8 . G G C C V V S S R R / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) - 9 , PUNE ; 4. THE PR. CIT - 5 , PUNE ; , 5. , , / DR B , ITAT, PUNE; 6. / GUARD FILE. / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE