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Income Tax Appellate Tribunal, BENCH “A”, MUMBAI
Before: SHRI G.S. PANNU & SHRI PAWAN SINGHShri B.V. Jhaveri (AR) Shri Saurabh Kumar (DR) PER PAWAN SINGH:
Order Under Section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee under section 253 of Income Tax Act (‘the Act’) is directed against the order of Ld. Commissioner of Income-Tax (Appeals)-41, Mumbai, [for short the ld. CIT(A)] for Assessment Year 2011-2012, which in turn arises from the assessment order dated 19.03.2014 passed under section 143(3) of the Act. The assessee has raised the following grounds of appeal:
1. The Commissioner (Appeals) erred in upholding the assessing officer's view of treating Short Term Capital Gain on sale of investment in shares amounting to Rs. 2,48,59,357/- as Business Income.
2. The Commissioner (Appeals) failed to consider the fact that the assessee has not made fresh investment and the frequency of purchase and sale was not beyond six transactions in 3 scripts.
3. The Commissioner (Appeals) failed to appreciate the non-existence of continuity and regularity throughout the year in purchase and sale of scrips invested. 2. Brief facts of the case are that the assessee is an individual and engaged in the business of trading of share and also making investment in share and securities. The assessee filed his return of income for relevant Assessment Year on 19.03.2014 declaring total income of Rs. 36,30,370/-. In the return of income, the assessee has shown income from Business & Profession and Other Sources. The assessment was completed on 19.03.2014 under section 143(3). The Assessing Officer while passing the assessment order treated the Short Term Capital Gain as Income from Business & Profession. On appeal before the Ld. CIT(A), the action of Assessing Officer was confirmed. Thus, further aggrieved by the order of Ld. CIT(A), the assessee has filed the present appeal before us.
At the outset of hearing, the Ld. AR of the assessee argued that the sole ground of appeal raised by assessee relates to treatment of Short Term Capital Gain as Business Income. The ld AR for the assessee further submits that the issue raised by assessee is squarely covered in favour of assessee in three earlier Assessment Year by the order of Tribunal in assessee’s own case i.e. A.Y. 2006-07 in dated 23.09.2011, ITA No. 3053/Mum/2012 for A.Y. 2008-09 and ITA No. 2305/Mum/20014 for A.Y. 2010-11. The Ld. DR for the Revenue fairly conceded that in earlier three years, the similar issue was decided in favour of assessee.
We have considered the rival contention of the parties and have gone through the order of authorities below. We have noted that in earlier A.Y. i.e. in A.Y. 2006-07, 2008-09 & 2010-11, the identical ground of appeal was raised by assessee and in all years, the issue was decided in favour of assessee. We have noted that in A.Y. 2010-11, the co-ordinate bench of Tribunal on similar ground of appeal allowed the appeal of assessee. We have further noted that during the year under consideration, the assessee has transacted only in respect of three scripts for the purpose of investment, copy of chart of shares which he had investment account which we have reproduced here:
S. Name No. of Purchase No. of Sold On Holding Frequenc Frequenc N Shares d on Shares Period y of y of o. Month-days Purchase Purchase 1 Hero 300 16.02.10 300 09-12-10 9m-23 days 2 2 Honda 9797 15.02.10 9797 08-12-10 9m-23 days Motors 1963 15.02.10 1963 09-12-10 9m-23 days Ltd. 2 Tata 50000 26.02.10 50000 16.10.10 7m-20 days 1 1 Consultanc y Services Ltd. 3 Infosys 7070 26.02.10 7070 16.12.10 9m-20 days 1 2 Technologi 2930 26.02.10 2930 03.01.10 10m-7 days es Ltd.
Perusal of above chart shows that the assessee has invested in three scripts and the period of holding in all scripts are more than seven month to about ten months. Thus, keeping in view the order of the coordinate bench in assessee’s own case for three assessment years as referred above, we are of the view that the gain arising out of sale of three scripts is liable to be treated as capital gain. The assessing officer is directed accordingly. Resultantly, the ground of appeal raised by assessee is allowed.