MOHAN K JAIN, V. ASST DIT 20(2),

MA 127/MUM/2014

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 2117 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 9 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 25-07-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2006-2007
• Appeal Filed On: 16-04-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ADAGIRI
• Assessee Lawyers: S C TIWARI; NATASHA MANGAT
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL F , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI AMIT SHUKLA , J M M A NO. 127 / MUM/20 1 4 ( ARISING OUT OF ITA NO. 1033 /MUM/201 0 ) ( ASSESSMENT YEAR :200 6 - 20 07 ) SHRI MOHAN K. JAIN, C/4, JEEVAN SUDHA, S D BARFIWALA MARG, JUHU LANE, ANDHERI WEST, MUMBAI - 400 058 VS. ADCIT, 20(2), MUMBAI PAN NO. : AAB PJ 7629 P APP LICANT .. RESPONDENT ASSESSEE BY : SHRI S.C.TIWARI & NATASHA MANGAT REVENUE BY : SHRI B.YADAGIRI DATE OF HEARING : 25 TH JU LY , 201 4 DATE OF PRONOUNCEMENT : 25 TH JU LY , 201 4 O R D E R PER R.C.SHARMA, AM : THIS MISCELLANEOUS APPLICATION AROSE OUT OF THE ORDER PASSED BY THE TRIBUNAL IN ITA NO. 1033 /MUM/201 0, DATED 21 - 2 - 2014 . 2 . THROUGH THIS MISCELLANEOUS APPLICATIO N, IT WAS THE CONTENTION OF THE ASSESSEE THAT THE APPARENT MISTAKE HAS BEEN OCCURRED IN THE ORDER OF TRIBUNAL IN RESPECT OF PROFIT EARNED ON SALE OF SHARE OF M/S COROMANDEL FERTILIZERS LTD. AND DHARANI SUGARS AND CHEMICALS LTD. . AS PER ANNEXURE - A , THERE WA S NO REPETITIVE NATURE OF TRANSACTION, ACCORDINGLY THERE WAS NO JUSTIFICATION FOR HOLDING THE PROFIT EARNED ON SALE OF THESE SHARES AS BUSINESS INCOME RATHER THAN CAPITAL GAINS. M A NO. 12 7 /20 1 4 2 3 . SHRI S.C.TIWARI, LEARNED AR APPEARING ON BEHALF THE ASSESSEE INVITED OUR A TTENTION TO THE PAGE 22 OF THE CIT(A) S ORDER, WHEREIN THE CIT(A) HAS UPHELD THE TREATMENT OF BUSINESS INCOME AS GIVEN BY THE AO ON THE GROUND THAT THESE WERE REPETITIVE TRANSACTIONS. OUR ATTENTION WAS ALSO INVITED TO ANNEXURE - A CONTAINING TRANSACTION IN C ASE OF COROMANDEL FERTILIZERS LTD. AND DHARANI SUGARS AND CHEMICALS LTD. SO AS TO SUGGEST THAT THERE WAS NO REPETITIVE PURCHASE AND SALE IN RESPECT OF THESE TWO SHARES. IT WAS, THEREFORE, SUBMITTED THAT ASSESSEE DESERVES PART RELIEF IN RELATION TO THESE I TEMS IN ANNEXURE - A. 4 . ON CONTRARY, LEARNED DR CONTENDED THAT THERE IS NO APPARENT MISTAKE IN THE ORDER OF THE TRIBUNAL, WHICH COULD BE RECTIFIED U/S. 254 (2) OF THE I.T.ACT. 5 . WE HAVE CONSIDERED RIVAL CONTENTIONS, CAREFULLY GONE THROUGH THE ORDER OF THE TRIBUNAL AS WELL AS THE ORDER OF THE LOWER AUTHORITIES. WE FOUND THAT CIT(A) HAS DISCUSSED EACH AND EVERY SHARES TRANSACTED BY THE ASSESSEE DURING THE YEAR, PROFIT OF WHICH WAS OFFERED AS SHORT TERM CAPITAL GAIN. AFTER DISCUSSING IN DETAIL AND GIVING ITS FINDING WITH REGARD TO THE LARGE VOLUME AND FREQUENCY OF TRANSACTIONS AS WELL AS REPETITIVE NATURE OF TRANSACTION, CAME TO THE CONCLUSION THAT PROFIT ARISING OUT OF THE FOUR SHARES WAS LIABLE TO BE TAXED AS BUSINESS INCOME RATHER THAN CAPITAL GAIN AMOUNTIN G TO RS. 18,41,027/ - . HOWEVER, IN RESPECT OF BALANCE TRANSACTION AFTER APPLYING TEXT LAID DOWN IN VARIOUS JUDICIAL PRONOUNCEMENTS, THE CIT(A) RECORDED A CATEGORICAL FINDING THAT THESE WERE DELIVERY BASED TRANSACTION AND, THEREFORE, AFTER KEEPING IN VIEW ITS M A NO. 12 7 /20 1 4 3 FREQUENCY AND VOLUME OF TRANSACTION, HELD THAT PROFIT AROSE THEREFROM WAS LIABLE TO BE TAXED AS SHORT TERM/LONG TERM CAPITAL GAINS DEPENDING ON THE PERIOD OF HOLDING. AFTER CONSIDERING THE OBSERVATION MADE BY THE AO & CIT(A) VIS - - VIS THE CONTENTION RAISE D BY THE LEARNED AR AND DR DURING THE COURSE OF HEARING, THE TRIBUNAL HAS UPHELD THE FINDINGS OF CIT(A) AFTER CONSIDERING THE FREQUENCY AND VOLUME OF TRANSACTIONS. WE FOUND THAT THE CIT(A) HAS TREATED PROFIT AROSE IN RESPECT OF THESE FOUR COMPANIES AS BUSI NESS INCOME NOT ONLY BASED ON REPETITIVE NATURE OF TRANSACTION BUT ALSO ON THE BASIS OF FREQUENCY AND VOLUME OF TRANSACTION. EVEN THOUGH THERE WAS NO REPETITIVE TRANSACTION OF PURCHASE AND SALE IN RESPECT OF TWO SHARES HIGHLIGHTED BY THE LEARNED AR, THE OB SERVATION OF THE CIT(A) WITH REGARD TO THE FREQUENCY AND VOLUME OF TRANSACTION CANNOT BE BRUSHED ASIDE . ACCORDINGLY, WE DO NOT FIND ANY MISTAKE APPARENT IN THE ORDER OF THE TRIBUNAL FOR IN TERFERING WITH THE FINDINGS OF THE CIT(A) WITH RESPECT TO NATURE OF PROFIT EARNED IN RESPECT OF VARIOUS SHARES, WHICH CAN BE RECTIFIED U/S. 254(2) OF THE ACT. 6 . IN THE RESULT, THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 25 TH JULY,2014 . SD/ - ( AMIT S HUKLA ) SD/ - ( R.C.SHARMA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 25 /0 7 /2014 /PKM , PS COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. M A NO. 12 7 /20 1 4 4 / BY ORDER, ( ASSTT. REGISTRAR) / ITAT, MUMBAI 3. / THE CIT(A), MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//