Mr. Kiritkant Champaklal Kotwal, Surat V. The Income tax Officer,Ward-3(3), Surat

ITA 919/AHD/2010

• Counselvise Citation: 91920514 RSA 2010
• Duration Of Justice: 3 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 13-08-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 29-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P BHATHEJA
• Assessee Lawyers: K C KOTWAL
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER AN D SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO. 919/AHD/2010 A.Y: 2006-07 KIRTIKANT CHAMPAKLAL KOTWAL 903, ADHAR SHILA APT., OPP. BINAYAK STORE, GHOD DOD ROAD, SURAT PAN : ABMPK5652M VS ITO, WARD 3 (3), SURAT (ASSESSEE) (REVENUE) REVENUE BY : SHRI O. P. BHATHEJA, SR. D R ASSESSEE(S) BY : SHRI K. C. KOTWAL, ASSESSEE / // / DATE OF HEARING : 13/08/2013 / DATE OF PRONOUNCEMENT: 14/08/2013 / O R D E R PER A. K. GARODIA: THIS APPEAL IS FILED BY THE ASSESSEE AND IS DIRECT ED AGAINST THE ORDER OF LEARNED CIT -II, SURAT DATED 21.12.2009 FOR A.Y. 20 06 07. 2. THE ONLY GRIEVANCE OF THE ASSESSEE IS REGARDING CONSIDERING THE INCOME OF RS. 243,168/- AS BUSINESS INCOME AS AGAINST SHORT T ERM CAPITAL GAIN DECLARED BY THE ASSESSEE. 3. THE ASSESSEE HIMSELF APPEARED BEFORE US AND EXPL AINED THE FACTS. IT IS SUBMITTED BY HIM THAT THE A.O. HAS CONSIDERED BOTH LTCG RS. 296,675/- AND STCG RS. 243,165/- AS BUSINESS INCOME BUT ABOUT LTC G, THE LEARNED CIT (A) HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND THE REVENUE IS NOT IN APPEAL FOR THIS RELIEF ALLOWED BY HIM. HE ALSO SUBMITTED T HAT IN EARLIER YEARS I.E. A.Y. 2003 04 TO 2005 06 ALSO, THE CLAIM OF THE ASSES SEE ABOUT STCG WAS ACCEPTED BY THE DEPARTMENT AND ONLY IN THIS YEAR, T HE A.O. HAS HELD THAT THERE IS NO LTCG OR STCG BUT THE CLAIM OF LTCG STANDS ACCEPT ED IN THE PRESENT YEAR ITA NO.919/AHD/2010 - 2 - ALSO. ABOUT STCG, HE SUBMITTED THAT THERE ARE ONLY 40 SCRIPTS IN WHICH THE STCG HAS ARISEN. HE ALSO SUBMITTED THAT FOR INTRADA Y TRADING AND FOR F & O (FUTURE & OPTIONS) DEALINGS, HE HAS HIMSELF DECLARE D BUSINESS INCOME. HE ALSO SUBMITTED THAT HE HAS EARNED DIVIDEND INCOME ALSO O F RS. 95,966/- AND THIS ALSO SUPPORTS THE CASE OF THE ASSESSEE THAT SHARES ARE H ELD AS INVESTMENT AND NOT AS STOCK IN TRADE. AS AGAINST THIS, LEARNED DR SUPPORT ED THE ORDER OF LEARNED CIT (A). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT IN THREE EARLIER YEARS ALSO, THE ASSESSEE HAS CLAIMED LTCG AND STCG AND THE SAME WERE ACCEPTED. I N THE PRESENT YEAR ALSO, THE CLAIM OF LTCG IS ACCEPTED BY THE LEARNED CIT (A ) AND NO APPEAL IS FILED BY THE REVENUE. ON INTRADAY TRADING AND F & O DEALING, THE ASSESSEE HAS HIMSELF ACCEPTED THAT THE SAME IS BUSINESS ACTIVITY AND DEC LARED SUCH INCOME AS BUSINESS INCOME. THE DISPUTE BEFORE US IS ONLY ABOUT A SMALL INCOME OF RS. 2.43 LACS IN RESPECT OF ABOUT 40 SCRIPTS. THE CLAIM OF THE ASSES SEE ABOUT LTCG HAS BEEN ACCEPTED BY THE LEARNED CIT (A) ON THIS BASIS THAT HOLDING PERIOD IS MORE THAN ONE YEAR. WE FAIL TO UNDERSTAND THAT HOW ONLY FOR T HIS REASON THAT HOLDING PERIOD IS LESS OR MORE, THE CHARACTER OF INCOME CAN CHANGE . NO OTHER REASONING IS GIVEN BY LEARNED CIT (A) FOR ACCEPTING THE CLAIM OF LTCG. MAIN REASONING GIVEN BY THE A.O. & CIT (A) IS THIS THAT THE ASSESSEE IS DEA LING WITH TWO RENOWNED SHARE BROKERS AND INCURRING EXPENSES ON BANK CHARGES, SA LARY, TURNOVER CHARGES, SHARE CONSULTING CHARGES, DEMAT CHARGES AND PETROL & CONV EYANCE CHARGES OF RS. 104,442/- AND HENCE, THE ASSESSEE IS A DEALER IN SH ARES AND NOT AN INVESTOR. WE DO NOT FIND ANY MERIT IN THE SAME BECAUSE THE ASSES SEE IS DECLARING BUSINESS INCOME ALSO WITH REGARD TO INTRADAY TRADING AND F & O DEALING. THESE EXPENSES ARE ALLOWED BY THE A.O. ALSO AND HENCE, THE SAME AR E NOT BOGUS AND MIGHT HAVE BEEN INCURRED FOR THOSE TWO ACTIVITIES FOR WHICH TH E ASSESSEE HAS DECLARED BUSINESS INCOME I.E. INTRADAY TRADING AND F & O DEA LING. NOW, THE QUESTION IS ITA NO.919/AHD/2010 - 3 - WHETHER THE ASSESSEE CAN DEAL IN SHARES AND HAVE IN VESTMENT IN SHARES ALSO? THE REPLY IN OUR CONSIDERED OPINION IS YES. AS PER THE DEPARTMENT ALSO, THE REPLY IS YES BECAUSE THE DEPARTMENT HAS ALSO ACCEPTED LTCG. NOW, THE SECOND OBJECTION IS ABOUT THE ALLEGED HIGH VOLUME BUT ADMITTEDLY, TH E STCG IS ONLY FOR ABOUT 40 SCRIPTS AND LTCG FOR 14 SCRIPTS. THE INVESTMENT AS PER BALANCE SHEET AS ON 31.03.2006 IS RS. 19.65 LACS FOR 132 SCRIPTS. IN OU R CONSIDERED OPINION, THE HOLDING CUM SALE RATIO IN TERMS OF VALUE OR IN TERM S OF NO. OF SCRIPTS IS QUITE HIGH AND HENCE IN THE FACTS OF THE PRESENT CASE, WE FEEL THAT THE STCG DECLARED BY THE ASSESSEE SHOULD ALSO BE ACCEPTED IN THE FACTS OF TH E PRESENT CASE. WE WANT TO MAKE IT CLEAR THAT THIS DECISION OF OURS IS IN VIEW OF THE FACTS OF THE PRESENT CASE FOR THE PRESENT YEAR PARTICULARLY THE SMALLNESS OF THE AMOUNT OF STCG GIVING RISE TO TAX DISPUTE OF ONLY ABOUT RS. 40 THOUSAND A PPROX AND HENCE, WE ARE NOT DEALING OTHER ASPECTS SUCH AS REPETITIVE TRANSACTIO N ETC. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTION ED ON THE CAPTION PAGE. SD/- S D/- (MUKUL KUMAR SHRAWAT) (A.K. GAR ODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT. 3. #$#% ' '& / CONCERNED CIT 4. ' '&() / THE CIT(A)-III, AHMEDABAD 5. )*' %, ' ' % , ,-$ / DR, ITAT, AHMEDABAD 6. *./ 0 / GUARD FILE. / BY ORDER, //TRUE COPY// 1 11 1/ // /,' #2 ,' #2 ,' #2 ,' #2 ( DY./ASSTT.REGISTRAR) ' ' % ' ' % ' ' % ' ' % , , , , ,-$ ,-$ ,-$ ,-$ / ITAT, AHMEDABAD