DCIT CIR 13(3), MUMBAI V. BHARAT KUNVERJI KENIA, MUMBAI

ITA 929/MUM/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 8621 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 05-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARIGOVIND SINGH
• Assessee Lawyers: PRADIP N KAPASI
• Keywords: Business income; Capital Gains
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B : MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER ITA. NO. 929/MUM/2010 ASSESSMENT YEAR 2006-2007 DCIT 13 (3) MUMBAI VS. SHRI BHARAT KUNVERJI KENIA, MUMBAI 400009 PAN AACPK-4333L (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI HARI GOVIND SINGH, (DR) FOR RESPONDENT : SHRI PRADIP N. KAPASI ORDER PER D. MANMOHAN, V.P. 1. ONLY GROUND URGED BY THE REVENUE, IN THIS APPEA L, READS AS UNDER : 1, (I) THE LEARNED CIT(A), ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW IN DELETING TH E ADDITION OF RS.40,31,124/- MADE BY THE ASSESSING OFFICER AS BUSINESS INCOME AS AGAINST STCG SHOWN BY THE ASSESSEE. (II) THE LEARNED CIT(A), ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, ERRED IN NOT APPRECIATING THE ACTORS LIKE VOLUME, FREQUENCY, PER IOD OF HOLDING AS CRITERION TO DETERMINE THE NATURE OF TRANSACTIONS. 2. FACTS OF THE CASE REVOLVE IN A NARROW COMPASS. ASSESSEE, AN INDIVIDUAL BY STATUS, DECLARED TOTAL INCOME OF R S.47,43,640/- IN RESPECT OF THE PREVIOUS YEAR RELEVANT TO THE ASSESS MENT YEAR 2006- 2007. INCOME OF THE ASSESSEE COMPRISES OF SHARE OF PROFIT FROM THE PARTNERSHIP FIRMS IN WHICH HE IS A PARTNER, APART F ROM CAPITAL GAINS AND OTHER SOURCES. THOUGH THE RETURN WAS ORIGINALLY PROCESSED UNDER ITA.NO.929/MUM/2010 SHRI BHARAT KUNVERJI KENIA 2 SECTION 143 (1) OF THE ACT, THE SAME WAS LATER TAKE N-UP FOR SCRUTINY BY ISSUING NOTICE UNDER SECTION 143 (2) OF THE ACT. DU RING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTIC ED THAT THE ASSESSEE SHOWED SHORT TERM CAPITAL GAINS OF RS.40,3 1,124/- REFERABLE TO PURCHASE AND SALE OF SHARES TOTALLING TO 357 TRA NSACTIONS. AT THE OUTSET, THE ASSESSING OFFICER OBSERVED THAT IN THE IMMEDIATELY PRECEDING YEAR REVENUE HAD TAKEN STAND THAT THE GAI NS ARISING OUT OF PURCHASE AND SALE OF SHARES ARE ASSESSABLE TO TAX A S BUSINESS INCOME. SINCE THE STAND TAKEN BY THE ASSESSING OFFICER FOR THE IMMEDIATELY PRECEDING YEAR WAS AFFIRMED BY THE CIT(A), EVEN IN THIS YEAR INCOME ON SHARE TRANSACTIONS WAS SOUGHT TO BE TAXED UNDER THE HEAD PROFITS AND GAINS OF BUSINESS. 3. ACCORDING TO THE ASSESSING OFFICER DECISION WIT H REGARD TO TAXABILITY OF SUCH INCOME DEPENDS ON VARIOUS FACTOR S SUCH AS : (A) OBJECT OF INVESTMENT IN SHARES (B) NUMBER OF SHARES TRADED AND VOLUME OF TRANSACTIONS (C) FREQUENCY OR NUMBER OF SIMILAR TRANSACTIONS BY THE SAME PERSON APART FROM INTENTION AT THE TIME OF PURCHASE WHICH, IN THE OPINION OF THE ASSESSING OFFICER, IS VERY CRUCIAL AND DETERMINATIVE TO EXPLAIN AS TO WHETHER IT WAS A TRANSACTION WITH A VIEW TO RESELL AS AN INVESTMEN T OR AN ADVENTURE IN THE NATURE OF TRADE. 3.1. PARA 6.4 OF THE ORDER SHOWS THAT ASSESSEE HAD CARRIED OUT PURCHASE AND SALE OF SHARES WORTH RS.2.50 CRORES, I N TERMS OF VOLUME, AND 276 IN TERMS OF QUANTITY OF TRANSACTIONS, WITHI N SIX MONTHS RECKONED FROM THE DATE OF PURCHASE. ON THE STRENGTH OF THIS DATA, THE ASSESSING OFFICER ASSUMED THAT THERE WAS FREQUENCY OF DEALING IN PURCHASE AND SALE OF SHARES AND IT INDICATES THAT T HE ASSESSEE INTENDED TO DEAL IN SHARES AS A TRADER AND NOT AS A N INVESTOR. IN OTHERWORDS, PROFIT MAXIMISATION IS THE MAIN CRITERI A. 3.2. WHEN PRIMA FACIE VIEW OF THE ASSESSING OFFICE R WAS PUT TO THE ASSESSEE, A DETAILED WRITTEN EXPLANATION WAS FU RNISHED BY THE ITA.NO.929/MUM/2010 SHRI BHARAT KUNVERJI KENIA 3 ASSESSEE WHEREIN IT WAS STATED THAT THE ASSESSEE HA D CONSISTENTLY, OVER A PERIOD OF 30 YEARS, INVESTED HIS SURPLUS INC OME IN BUILDING UP SHARE PORTFOLIO, WITHOUT USING BORROWED FUNDS FOR T HE PURPOSE OF INVESTMENT. IT WAS ALSO SUBMITTED THAT THE ASSESSEE NEVER DEALT IN SHORT SELLING OR SPECULATION AND HAD BEEN CONSISTEN T IN SHOWING PROFITS ON SALE OF SUCH SHARES UNDER THE HEAD CAPI TAL GAINS. THE DELIVERY OF SHARES WERE ALWAYS TAKEN AND RETAINED F OR SUBSTANTIAL PERIOD BEFORE SELLING THEM. SUBSTANTIAL DIVIDEND WA S ALSO EARNED CONSISTENTLY AND THE SAME WAS OFFERED TO TAX IN THE YEAR WHENEVER SUCH INCOME WAS TAXABLE. AS REGARDS THE METHODOLOGY FOLLOWED IN INVESTMENT IN SHARES ASSESSEE HAD GIVEN A DETAILED ANALYSIS TO INDICATE THAT THOUGH INVESTMENT IN SHARES ALSO INVO LVES RISK, AS A PRUDENT INVESTOR ASSESSEE HAS GIVEN EMPHASIS TO WEA LTH ENHANCEMENT RATHER THAN KEEPING THE PROFIT MAXIMISATION AS AN I MMEDIATE GOAL AND, IN THE PROCESS, CERTAIN SHARES MIGHT HAVE BEEN SOLD AFTER RETAINING THEM FOR A SHORTER PERIOD BUT THAT ALONE CANNOT BE TAKEN AS A CRITERIA TO HOLD THAT ASSESSEE TRADED IN SHARES; RATHER THE AVERAGE PERIOD OF HOLDING IS ATLEAST 746 DAYS IN CASE OF LO NG TERM CAPITAL GAINS WHICH, IN ITSELF, SHOW THAT THE ASSESSEES PRIMARY INTENTION WAS TO DEAL WITH SHARES AS AN INVESTOR AND NOT TO DEAL WITH THE M AS A TRADER. 3.3. THE AFOREMENTIONED CONTENTION DID NOT CONVINC E THE ASSESSING OFFICER. RATHER, HE HAD PROCEEDED TO ANAL YSE THE PROVISIONS FOR SECURITY TRANSACTION TAX AND THE CONSEQUENT C HANGES MADE UNDER THE INCOME TAX ACT TO HIGHLIGHT THAT AN INVESTOR WO ULD BE TAXED AT A CONCESSIONAL RATE AND SUCH CONCESSION IS NOT AVAILA BLE TO A TRADER AND HENCE HE SURMISED THAT ASSESSEE MIGHT HAVE SHOWN HI S PORTFOLIO AS AN INVESTMENT RATHER THAN AS A TRADING ACTIVITY. THOUG H HE ADMITTED THAT PURPOSE OF INVESTMENT IS MAINLY WITH AN EXPECTATION THAT INVESTMENT MAY APPRECIATE IN THE LONG RUN AND NOT IMMEDIATELY, SINCE MOST INVESTORS ARE RISK AVERSE AND ATTEMPT IS ORDINARILY MADE TO MAXIMISE THEIR WEALTH, HE OBSERVED THAT CLASSIFICATION OF A PARTICULAR SCRIP IN THE BOOKS OF ACCOUNT CAN ONLY BE INDICATIVE BUT NOT CON CLUSIVE TO PROVE ITA.NO.929/MUM/2010 SHRI BHARAT KUNVERJI KENIA 4 THE NATURE; FREQUENT DEALING IN SHARES INDICATE THA T THE ASSESSEE WAS ACTIVELY INVOLVED IN THE STOCK MARKET WHICH IS AN E SSENTIAL REQUISITE OF A TRADER IN SHARES. ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD DISPLAYED ALL INGREDIENTS OF SHARE TRADING BY ENGAG ING HIMSELF IN SOME REAL, SUBSTANTIAL AND SYSTEMATIC BUSINESS ACTIVITY WITH THE PURPOSE OF EARNING INCOME FROM PURCHASE AND SHARE OF SHARES. H E ALSO ASSUMED THAT THE ASSESSEE WAS NOT COMPELLED OR FORCED BY AN Y OF THE CIRCUMSTANCES TO SELL SHARES ACQUIRED BY HIM AND SU DDEN SALE OF SOME SHARES INDICATE THAT PURCHASE OF SHARES WAS WITH A MOTIVE TO EARN PROFIT WHICH IS NOT EXPECTED OF FROM A PERSON WHO I NTENDS TO ACQUIRE THE SHARES AS AN INVESTOR. AS REGARDS THE APPLICABI LITY OF DOCTRINE OF RESJUDICATA, ASSESSING OFFICER OBSERVED THAT THE SA ID DOCTRINE APPLIES TO DECISIONS OF CIVIL COURTS AND IT CANNOT BE INVOK ED WHILE DECIDING INCOME TAX MATTERS. IN OTHERWORDS, INCOME TAX AUTHO RITIES ARE NOT PRECLUDED FROM DETERMINING A QUESTION AFRESH ON THE SET OF FACTS AVAILABLE ON RECORD MERELY BECAUSE IDENTICAL ISSUE WAS DECIDED IN A DIFFERENT MANNER IN A PRECEDING YEAR. HE THUS BROUG HT TO TAX THE PROFIT ON SALE OF SHARES AS BUSINESS INCOME. 4. ON AN APPEAL FILED BY THE ASSESSEE, LEARNED CIT (A) HAD THE BENEFIT OF THE ORDER OF THE ITAT, B BENCH, MUMBAI IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2005-2006 WHEREIN ON I DENTICAL FACTS THE APPELLATE TRIBUNAL DECIDED THE ISSUE IN FAVOUR OF T HE ASSESSEE BY HOLDING THAT PROFIT ON SALE OF SHARES IS ASSESSABLE TO TAX AS SHORT TERM CAPITAL GAINS AND NOT AS BUSINESS INCOME. SINCE THE ASSESSING OFFICER HAS NOT STATED ANYWHERE THAT FACTS ARE MATERIALLY D IFFERENT IN THE YEAR UNDER CONSIDERATION, BY APPLYING THE PRINCIPLE OF C ONSISTENCY, LEARNED CIT(A) ACCEPTED THE PLEA OF THE ASSESSEE IN THE LIG HT OF DECISION OF THE ITAT (SUPRA). 5. AGGRIEVED BY THE ORDER OF THE LEARNED CIT(A), R EVENUE IS IN APPEAL BEFORE US. LEARNED DR PAINSTAKINGLY REFER RED TO THE OBSERVATIONS OF THE ASSESSING OFFICER AND, WITH THE HELP OF THE CHART GIVEN IN PARA 6.4 OF THE ASSESSMENT ORDER, IT WAS C ONTENDED THAT THERE ITA.NO.929/MUM/2010 SHRI BHARAT KUNVERJI KENIA 5 WAS FREQUENCY AND REGULARITY OF THE TRANSACTIONS IN PURCHASE AND SALE OF SHARES. IN THE OPINION OF THE LEARNED DR VOLUME, FREQUENCY AND REGULARITY OF THE TRANSACTIONS IS ONE OF THE ESSENT IAL TESTS TO CONSIDER THE NATURE OF TRANSACTIONS AND ACCORDINGLY ATTEMPT WAS MADE TO SUBMIT THAT IN THE INSTANT CASE IMPUGNED TRANSACTIO NS WERE EFFECTED IN HIS CAPACITY AS A TRADER AND NOT AS AN INVESTOR IN SHARES. LEARNED DR HAS ALSO RELIED UPON FOLLOWING DECISIONS OF THE ITAT IN SUPPORT OF HIS CONTENTION THAT IN A GIVEN CASE WHERE FACTS ARE DISTINGUISHABLE OR FRESH FACTS ARE BROUGHT ON RECORD, PRINCIPLES OF RE SJUDICATA DOES NOT COME INTO PLAY IN THE INCOME TAX PROCEEDINGS AND AN APPELLATE AUTHORITY IS FREE TO TAKE A DIFFERENT VIEW ON THE M ATTER WITHOUT MERELY BEING GUIDED BY THE CONCLUSIONS REACHED BY THE ITAT IN ASSESSEES OWN CASE FOR THE EARLIER YEAR. (I) SMT. SADHANA NABERA VS. ACIT ITA.NO.2586/M/2009 DATED 26 TH MARCH, 2010. (II) MR.RAKESH J.SANGHVI VS. DCIT ITA.NO.4607/M/2008 AND 5710/MUM/2009 DATED 31-08-2010. 6. AS REGARDS THE DECISION OF ITAT B BENCH, MUMB AI, IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2005-20 06 (ITA.NO. 6544/MUM/2008 DATED 15 TH MAY, 2009), LEARNED DR SUBMITTED THAT THE SAME WAS BASED ON CERTAIN ASSUMPTIONS. ADVERTIN G OUR ATTENTION TO PARA 6 OF THE ORDER OF THE TRIBUNAL IT WAS SUBMI TTED THAT DECISION WAS RENDERED ON THE PREMISE THAT THERE WAS NO DISPU TE THAT ASSESSEE WAS DEALING IN SHARES AS AN INVESTOR FOR PAST MANY YEARS AND ASSESSEE HAD NOT BORROWED ANY MONEY FOR MAKING INVESTMENT IN SHARES, OVERLOOKING MANY OTHER FACTORS THAT NEED TO BE TAKE N NOTE OF IN ORDER TO ANALYSE AS TO WHETHER IN A PARTICULAR YEAR THE A CTIVITY CARRIED ON BY THE ASSESSEE IS ESSENTIALLY IN HIS CAPACITY AS A TR ADER OR AS AN INVESTOR. IT WAS ALSO SUBMITTED THAT THE TRIBUNAL WAS NOT JUS TIFIED IN HOLDING THAT FREQUENCY OF TRANSACTIONS CANNOT BE A DECISIVE FACTOR. HE THUS STRONGLY SUPPORTED THE ORDER PASSED BY THE ASSESSIN G OFFICER. ITA.NO.929/MUM/2010 SHRI BHARAT KUNVERJI KENIA 6 7. ON THE OTHER HAND LEARNED COUNSEL, APPEARING ON BEHALF OF THE ASSESSEE, SUBMITTED THAT THOUGH THE PRINCIPL E OF RESJUDICATA IS NOT APPLICABLE TO INCOME TAX PROCEEDINGS, RULE OF C ONSISTENCY DESERVES TO BE TAKEN NOTE OF IF THE FACTS AND CIRCUMSTANCES ARE IDENTICAL, IN THE CASE OF A PRECEDENT OF A COORDINATE BENCH, IN ASSES SEES OWN CASE. IN THIS REGARD, HE REFERRED TO AN UNREPORTED DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF SHRI DARIUS PANDOLE (INCO ME TAX APPEAL NO. 3053 OF 2009 DATED 16 TH JUNE, 2010) AS WELL AS THE DECISION OF ITAT, A BENCH, MUMBAI (SHRI LAKSHMICHAND KUNVERJI KENIA ITA. NO. 2697/MUM/2009 DATED 22 ND OCTOBER, 2009). HE HAS ALSO PLACED BEFORE US A CHART SHOWING ALL COMPARATIVE FIGURES F OR THE ASSESSMENT YEARS 2005-2006 AND 2006-2007 TO HIGHLIGHT THAT ASS ESSEES CASE IS ON A STRONGER FOOTING IN THE YEAR UNDER CONSIDERATI ON AS COMPARED TO THE FACTS PERTAINING TO THE ASSESSMENT YEAR 2005-20 06. IT APPEARS THAT A CIRCULAR WAS ISSUED BY THE CBDT (CIRCULAR NO . 4 OF 2007 DATED 15-6-2007) LISTING OUT ESSENTIAL REQUIREMENTS TO BE TAKEN NOTE OF TO DISTINGUISH THE CASE OF AN INVESTOR FROM A TRADER. LEARNED COUNSEL HAS PREPARED A CHART TO SHOW THAT MAJORITY OF THE REQUI REMENTS WERE FULFILLED IN ASSESSEES CASE AND HENCE IT CANNOT BE SAID TO BE A CASE OF TRADING IN SHARES, EITHER ON REGULAR BASIS OR AS AN ADVENTURE IN THE NATURE OF TRADE. LEARNED COUNSEL SUBMITTED THAT IN HIS INDIVIDUAL CAPACITY HE WAS NOT CARRYING ON ANY BUSINESS AND EV EN AS A PARTNER IN PRABHAT REALTORS, JAYANT PULSE MILLS AND M/S. S.K. OIL TRADING COMPANY HE WAS ENGAGED IN THE BUSINESS OF DEALING I N OILS AND CONSTRUCTION AND HENCE, PURCHASE AND SALE OF SHARES WAS AN INDEPENDENT ACTIVITY AS COMPARED TO HIS USUAL TRADE OR BUSINESS. IN THE BOOKS OF ACCOUNT ASSESSEE DECLARED THE VALUE OF SHARES AS AN INVESTMENT AND NOT AS STOCK-IN-TRADE. SHARES WERE P URCHASED OUT OF OWN FUNDS AND THERE WAS NO REPETITION OF TRANSACTIO N I.E., ONCE A SCRIP IS SOLD, IT IS NOT BOUGHT AGAIN. IT WAS ALSO SUBMIT TED THAT INVESTMENTS WERE MADE IN PURCHASE OF BLUE-CHIP COMPANYS SHARE AND THE RATIO OF SALES TO PURCHASE WAS NOT MUCH AS COMPARED TO THE I MMEDIATELY PRECEDING YEAR. SHARES WERE HELD FOR A SUBSTANTIAL PERIOD OF TIME ON ITA.NO.929/MUM/2010 SHRI BHARAT KUNVERJI KENIA 7 AN AVERAGE, AND THE PRIMARY INTENTION WAS WEALTH MA XIMISATION AND NOT PROFIT MAXIMISATION. IT WAS THUS CONTENDED THAT MAJORITY OF THE REQUIREMENTS LISTED OUT IN THE CIRCULAR WERE FULFIL LED BY THE ASSESSEE AND THE ASSESSING OFFICER HAS NOT SPECIFICALLY HIGH LIGHTED AS TO WHAT ARE THE REQUIREMENTS THAT WERE NOT FULFILLED IN THE INSTANT CASE. SINCE ALL THESE ASPECTS WERE TAKEN NOTE OF, IN THE ABSENC E OF HIGHLIGHTING SPECIFIC POINTS WHICH WOULD SUPPORT REVENUES CONTE NTION, REVENUE IS BOUND BY THE DECISION OF THE ITAT IN ASSESSEES OWN CASE FOR THE EARLIER YEAR. HE THUS STRONGLY SUPPORTED THE ORDER PASSED BY LEARNED CIT(A). 8. WE HAVE CAREFULLY CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE RECORD. IT IS WELL SETTLED THAT IN ORDE R TO DECIDE AS TO WHETHER PURCHASE AND SALE OF SHARES WOULD FALL IN T HE CATEGORY OF TRADING ACTIVITY OR INVESTMENT DEPENDS UPON VARIOUS FACTORS AND COURTS HAVE FROM TIME TO TIME LAID DOWN VARIOUS PRI NCIPLES AND IN TUNE WITH THE COURTS RULINGS THE CBDT APPEARS TO HA VE ISSUED A CIRCULAR. NO SINGLE CRITERIA LAID DOWN BY THE COURT S OR IN THE CIRCULAR IS DECISIVE AND THEY HAVE TO BE CONSIDERED CUMULATIVEL Y TO BRING OUT THE REAL INTENTION OF THE ASSESSEE BEFORE ENTERING INTO SUCH TRANSACTIONS. ASSESSEE HAS PREPARED A CHART SHOWING COMPLIANCE WI TH THE CIRCULAR WHEREIN IT WAS HIGHLIGHTED THAT HE HAS COMPLIED WIT H ALL THE REQUIREMENTS MENTIONED IN THE CIRCULAR. FOR IMMEDIA TE REFERENCE CHART IS REPRODUCED BELOW : BHARAT KUNVERJI KENIA CHART SHOWING COMPLIANCE WITH CIRCULAR 4 OF 2007 DATED 15-06-2007 SR. NO. REQUIREMENTS COMPLIANCE REMARKS 1. WHETHER PURCHASE AND SALE OF SECURITIES WAS AN INDEPENDENT ACTIVITY AS COMPARED TO HIS USUAL TRADE OR BUSINESS YES THE ASSESSEE IS IN THE BUSINESS OF DEALING IN OIL AND CONSTRUCTION AS PARTNER IN PRABHAT REALTORS, JAYANT PULSE MILLS AND M/S. S.K. OIL TRADING CO. ITA.NO.929/MUM/2010 SHRI BHARAT KUNVERJI KENIA 8 2. WHETHER PURCHASE IS MADE WITH THE PURPOSE OF LONG TERM APPRECIATION YES THERE IS A SUBSTANTIAL PERIOD OF HOLDING A.Y.2006-07 AVERAGE 181 DAYS FOR STCG 3. WHETHER SCALE OF ACTIVITY IS SUBSTANTIAL NO YES NOT SUBSTANTIAL. THERE ARE 166 DAYS ON WHICH NO TRANSACTION HAVE BEEN CARRIED OUT FOR A.Y. 2006-07 AND 163 DAYS FOR A.Y. 2005-06. 4. TRANSACTIONS WERE ENTERED INTO CONTINUOUSLY AND REGULARLY NO YES THERE HAVE BEEN NO TRANSACTIONS FOR 166 DAYS AND PARTICULARLY NO SALE FOR 248 DAYS AND NO PURCHASE FOR 204 DAYS. NO REGULAR AND CONTINUOUS TRANSACTIONS. 5. PURCHASES OUT OF OWN FUNDS YES PURCHASES WERE MADE OUT OF OWN POST TAX INCOME NO BORROWED FUNDS HAVE BEEN UTILISED. 6. SUBSTANTIAL PERIOD OF HOLDING YES PERIOD OF HOLDING FOR STCG 181 DAYS (L.Y.116 DAYS) 7. SUBSTANTIAL RATIO OF SALES TO PURCHASES AND HOLDING NO. YES THE RATIO IS ONLY 1.04:1 (L.Y. 1.36:1) 8. SUBSTANTIAL TIME DEVOTED TO THE ACTIVITY OF SHARES NO. YES ACTIVELY ENGAGED IN PARTNERSHIP FIRMS BUSINESS. 9. ONLY MEANS OF LIVELIHOOD-NO YES PARTNER IN OTHER FIRM SHAVING SUBSTANTIAL PROFIT. OTHER MEANS OF LIVELIHOOD AVAILABLE. OTHER INCOME THAN OF RS.24,44,439/-. 10. CHARACTERISATION OF SECURITIES IN BOOKS OF ACCOUNTS YES SHOWN AS INVESTMENTS IN THE BALANCE SHEET AND THE BOOKS OF ACCOUNTS. 11. ARE SECURITIES PURCHASED OR SOLD ARE LISTED ? YES LISTED ON THE BOMBAY STOCK EXCHANGE AND/OR NATIONAL STOCK EXCHANGE. 12. WHETHER INVESTMENT IN INDEPENDENT COMPANIES YES INVESTMENT IN BLUECHIP CONCERNS. 13. SUBSTANTIAL NUMBER OF STOCKS DEALT IN VERY LIMITED STOCKS YES AS COMPARED TO THE NUMBER OF SHARES LISTED ON THE STOCK EXCHANGE THE NUMBER OF STOCKS DEALT IN IS NOT SUBSTANTIAL. 14. ACTUAL MONEY RECEIVED OR PAID. YES BILL WISE PAYMENT IS MADE AND RECEIVED. 15. NO REPETITION OF TRANSACTION YES ONCE A SCRIPT IS SOLD IT IS NOT BOUGHT AGAIN. 9. IN THE BACKDROP OF THE FACTS NARRATED BY THE AS SESSEE IT CAN BE SEEN THAT ASSESSEE HAD ALL ALONG TREATED THE SHARES AS AN ITA.NO.929/MUM/2010 SHRI BHARAT KUNVERJI KENIA 9 INVESTMENT WITH THE PRIMARY OBJECT OF WEALTH MAXIMI SATION AND TREATED THE SAME AS INVESTMENT IN ITS BOOKS OF ACCO UNT OVER A PERIOD OF 30 YEARS. ADMITTEDLY, ASSESSEE HAS NOT BORROWED FUN DS FOR THE PURPOSE OF MAKING INVESTMENTS IN SHARES AND THE CAS E OF ASSESSEE IS THAT, SHARES ONCE SOLD WERE NOT PURCHASED, WAS NOT CONTROVERTED BY THE REVENUE. THE AVERAGE HOLDING OF SHARES FALLING UNDER SHORT TERM CAPITAL GAINS CATEGORY WAS 181 DAYS AND THUS, THE P LEA OF THE ASSESSEE THAT THE PRIMARY INTENTION OF PURCHASE OF SHARES WA S WITH THE PURPOSE OF LONG TERM APPRECIATION CANNOT BE RULED OUT. AT A NY RATE, ASSESSING OFFICER HAS NOT CONTRADICTED THE PLEA OF THE ASSESS EE BY HIGHLIGHTING ANY PARTICULAR TRANSACTION WHEREIN ANY OTHER INTENT ION CAN BE DISCERNED FROM. UNDER THESE CIRCUMSTANCES, WE ARE O F THE VIEW THAT THE DECISION OF THE ITAT IN ASSESSEES OWN CASE FOR THE EARLIER YEAR DESERVES TO BE FOLLOWED BY APPLYING THE RULE OF CON SISTENCY. CASE LAW RELIED UPON BY THE LEARNED DR ARE DISTINGUISHABLE O N FACTS INASMUCH AS IN THE AFORECITED DECISIONS CERTAIN SPECIFIC FEA TURES WERE FOUND SUCH AS FREQUENT BUYING AND SELLING OF SHARES OVER A SHO RT SPAN OF PERIOD, HIGH VOLUME OF TRANSACTIONS TARGETING SHORT TERM CA PITAL GAINS ETC., WHICH ARE DOMINANT FACTORS AS COMPARED TO THE MERE FACTUM OF TREATMENT GIVEN BY THE ASSESSEE IN ITS BOOKS OF ACC OUNTS, WHEREAS, IN THE INSTANT CASE, OVERALL INTENTION OF THE ASSESSEE APPEARS TO BE TO PURCHASE THE SHARES AND TO MAINTAIN A STEADY PORTFO LIO AND ANY TRANSACTION OF SALE WITHIN A SHORT SPAN WAS ONLY TO REDUCE THE LOSS IN THE FORM OF REDUCTION IN WEALTH. AS STATED HEREINAB OVE, THE FACTS IN THE CASES CITED BY THE LEARNED DR ARE DISTINGUISHABLE O N FACTS. ON A CONSPECTUS OF THE MATTER, WE ARE OF THE VIEW THAT T HE ORDER OF THE LEARNED CIT(A), THOUGH NOT ELABORATE, DO NOT SUFFER FROM INFIRMITY, HAVING REGARD TO THE FACT THAT THE POINTS URGED BY THE LEARNED COUNSEL, APPEARING ON BEHALF OF THE ASSESSEE, BEFORE US ARE NOT CONTROVERTED BY THE REVENUE AUTHORITIES. 10. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED. ITA.NO.929/MUM/2010 SHRI BHARAT KUNVERJI KENIA 10 ORDER PRONOUNCED IN THE OPEN COURT, ON THIS THE 0 2 ND DAY OF FEBRUARY, 2011. SD/- SD/- (PRAMOD KUMAR) (D.MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATE 02 ND FEBRUARY, 2011. VBP/- COPY TO 1. DCIT 13 (3), ROOM NO. 430, 4 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, NEW MARINE LINES, MUMBAI 400 020 2. SHRI BHARAT KUNVERJI KENTA, C/O. S.K. OIL TRADIN G CO., 208/210, NARSHI NATHA STREET, BHAT BAZAR, MUMBAI 40000 9 PAN AACPK-4333L 3. CIT(A)-24, MUMBAI. 4. CIT-13, MUMBAI 5. DR B BENCH 6. GUARD FILE (TRUE COPY) BY ORDER ASST. REGISTRAR, ITAT, MUMBAI BENCHES