DCIT CC 23, MUMBAI V. JATIN J ASHAR, MUMBAI

ITA 959/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4989 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 04-09-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 02-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P SINGH
• Keywords: Capital asset; Business income; Rule of consistency
• Section: 143(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL I II I BENCH, BENCH, BENCH, BENCH, MUMBAI MUMBAI MUMBAI MUMBAI , . . . ! ! ! ! , ' ' ' ' #$ #$ #$ #$ BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM & & & & SHRI SHRI SHRI SHRI N. K. BILLAIYA N. K. BILLAIYA N. K. BILLAIYA N. K. BILLAIYA, AM , AM , AM , AM ./ I.T I.TI.T I.T.A. NO. .A. NO. .A. NO. .A. NO.959/MUM/2011 959/MUM/2011 959/MUM/2011 959/MUM/2011 ( % % % % & & & & / ASSESSMENT YEAR :2007-08) ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE- 23, ROOM NO. 409, 4 TH FLOOR AAYAKAR BHAVAN, M. K. MARG MUMBAI-400020 / VS. SHRI JATIN J ASHAR 301/302, UMANG, 144, KASHIBHAI NAVRANGE MARG, GAMDEVI, MUMBAI-400007 $' ' ./ ( ./ PAN/GIR NO. :AABPA1915F ( ') / APPELLANT APPELLANT APPELLANT APPELLANT) .. ( *+') / RESPONDENT RESPONDENT RESPONDENT RESPONDENT) ') ') ') ') , , , , / APPELLANT BY : SHRI O. P. SINGH *+') *+') *+') *+') - -- - , , , , /RESPONDENT BY : SHRI SATISH MODI - -- - .' .' .' .' / DATE OF HEARING : 4 TH SEPTEMBER 2013 /0& /0& /0& /0& - -- -.' .' .' .' /DATE OF PRONOUNCEMENT: 13 TH SEPTEMBER 2013 #1 / O R D E R PER : , . . / VIJAY PAL RAO, JM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 14.10.2010 OF COMMISSIONER OF INCOME TAX(APPEALS) F OR THE ASSESSMENT YEAR 2007-08. 2. THE REVENUE HAS RAISED THE FOLLOWING EFFECTIVE G ROUND: A. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, WHETHER THE LD. CIT(A) WAS JUSTIFIED IN TREATI NG THE INCOME FROM SALE OF SHARES OF ` 23,36,824/-, AS INC OME FROM SHORT TERM CAPITAL GAIN AS AGAINST THE INCOME FROM BUSINESS ASSESSED BY THE A.O. ITA NO.959/M/2011 JATIN J ASHAR 2 3. THE ASSESSEE EARNED INCOME FROM SALE OF SHARES O F ` 23,36,824/- AND OFFER THE SAME AS SHORT TERM CAPITAL GAIN. THE AO HAS TREATED THE SAME AS BUSINESS INCOME. ON APPEAL, THE CIT(A) HAS NOTED THAT FOR THE ASSESSMENT YEAR FROM 2004-05 TO 2006-07 THE SHORT T ERM CAPITAL GAIN OFFERED BY THE ASSESSEE WAS ACCEPTED BY THE AO AND ACCORDINGLY BY FOLLOWING THE DECISION OF THIS TRIBUNAL IN CASE OF GOPAL PUROHIT VS JCIT 122 TTJ 87 ALLOWED THE CLAIM OF THE ASSESSEE. 4. WE HAVE HEARD THE LD. DR AS WELL AS LD. AR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. AT THE OUTSET THE LD. AR OF THE ASSESSEE HAS POINTED OUT THAT APART FROM THE EARLIER ASSESSM ENT YEAR EVEN FOR THE SUBSEQUENT ASSESSMENT YEAR 2008-09 THE AO HAS A CCEPTED THE CLAIM OF THE ASSESSEE REGARDING SHORT TERM CAPITAL GAIN. THE LD. AR HAS RELIED UPON THE DECISION DATED 23.8.2013 OF THIS TR IBUNAL IN CASE OF ASSESSEES WIFE SMT. VARSHA J. ASHAR IN ITA NO. 953 /2011 AND SUBMITTED THAT AN IDENTICAL ISSUE HAS BEEN DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE. THE LD. DR HAS HOWEVER, REL IED UPON THE ORDER OF THE ASSESSING OFFICER. 5. HAVING CONSIDERED THE RIVAL SUBMISSIONS AND CARE FULLY PERUSAL OF THE RECORD WE NOTE THAT THE AO ACCEPTED THE SHORT T ERM CAPITAL GAIN OFFERED BY THE ASSESSEE ON SALE OF SHARES FOR THE A SSESSMENT YEAR 2004-05 TO 2006-07. WE FURTHER NOTE THAT EVEN FOR T HE ASSESSMENT YEAR 2008-09 THE AO ACCEPTED THE CLAIM OF THE ASSES SEE REGARDING SHORT TERM CAPITAL GAIN. THUS, IT IS CLEAR THAT PRI OR AS WELL AS SUBSEQUENT ITA NO.959/M/2011 JATIN J ASHAR 3 ASSESSMENT YEAR TO YEAR UNDER CONSIDERATION, THE AO HAS ACCEPTED THE CLAIM OF THE ASSESSEE REGARDING SHORT TERM CAPITAL GAIN ARISING FROM SALE OF SHARES. IT HAS NOT BEEN BROUGHT OUT ON RECO RD AS HOW THE FACTS ARE DIFFERENT FOR THE ASSESSMENT YEAR UNDER CONSIDE RATION SO THAT THE RULE OF CONSISTENCY SHOULD NOT BE FOLLOWED. THE CO- ORDINATE BENCH OF THIS TRIBUNAL IN CASE OF SMT. VARSHA J. ASHAR (SUPR A) (THE WIFE OF THE ASSESSEE) HAS CONSIDERED AND DECIDED AN IDENTICAL I SSUE IN PARA 3 AS UNDER: 3. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PER USING THE RELEVANT MATERIAL ON RECORD, IT IS OBSERVED THAT TH E LEARNED CIT(A) HAS RECORDED A CATEGORICAL FINDING ON PAGE 12 OF TH E IMPUGNED ORDER THAT IN THE EARLIER YEARS SUCH PROFIT ON SHOR T TERM CAPITAL ASSET WAS TREATED AS SHORT TERM CAPITAL GAIN. THE L EARNED AR HAS PLACED ON RECORD COPY OF THE ORDER PASSED BY THE AS SESSING OFFICER U/S 143(3) IN RESPECT OF THE IMMEDIATELY SU CCEEDING ASSESSMENT YEAR I.E. 2008-2009 IN WHICH INCOME FROM SALE OF SHARES UNDER SIMILAR CIRCUMSTANCES DECLARED AS SHOR T TERM CAPITAL GAIN HAS BEEN ACCEPTED AS SUCH. A COPY OF S UCH ASSESSMENT ORDER DATED 31.12.2010 HAS BEEN PLACED O N RECORD. THE LEARNED AR DREW OUR ATTENTION TO THE FACT THAT THE NUMBER OF SHARES DEALT WITH IN THE INSTANT YEAR IS LESS THAN THOSE IN THE SUCCEEDING ASSESSMENT YEAR. WE FIND THAT THE HONBL E JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. GOP AL PUROHIT [(2011) 336 ITR 287 (BOM.)] HAS EMPHASIZED ON THE P RINCIPLE OF CONSISTENCY. IN THIS CASE THE HONBLE HIGH COURT, D EALING WITH SIMILAR ISSUE, HELD THAT: THERE OUGHT TO BE UNIFOR MITY IN TREATMENT AND CONSISTENCY WHEN THE FACTS AND CIRCUM STANCES ARE IDENTICAL. AS INCOME FROM SALE OF SHARES HAS BEEN CONSISTENTLY ACCEPTED AS SHORT TERM CAPITAL GAIN IN PRECEDING AN D SUCCEEDING YEARS, WE SEE NO REASON FOR OBSERVING DEPARTURE FOR THE CURRENT YEAR. RESPECTFULLY FOLLOWING THE PRECEDENT, WE UPHO LD THE IMPUGNED ORDER. 6. IN THE FACTS AND CIRCUMSTANCES OF THE CASE WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDER OF THE CIT(A). ACC ORDINGLY, THE IMPUGNED ORDER OF THE CIT(A) IS UPHELD. ITA NO.959/M/2011 JATIN J ASHAR 4 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 13 TH DAY OF SEPTEMBER 2013 SD/- SD/- ( . . ! ) ' #$ (N. K. BILLAIYA) ACCOUNTANT MEMBER ( ) % #$ (VIJAY PAL RAO) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 13 TH SEPTEMBER 2013 SUBODH COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI