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Income Tax Appellate Tribunal, G Bench, Mumbai
Before: Shri C.N. Prasad & Shri A.L. SainiShri Sriram Kapur
This appeal has been filed by the Revenue against the order of the CIT(A)-46, Mumbai dated 21.06.2016 for A.Y. 2010-11.
The only issue raised by the Revenue in the appeal is that the CIT(A) erred in directing the AO to treat the gains of `1,95,02,896/- derived from share trading as short term capital gain as against business income assessed by the AO. The Revenue in the grounds of appeal also contended that the decision of the Hon'ble ITAT in assessee’s on case for assessment years 2005-06 to 2008-09, which has been relied upon by the CIT(A) to decide the issue in assessee’s favour, has not been accepted by the Department on merits and appeal under Section 270A of the Income Tax Act, 1961 (hereinafter “the Act”) has been filed before the Hon'ble High Court.
Shri Sriram Kapur 3. At the outset the learned counsel for the assessee submitted that the issue in the appeal is whether the gains on sale of shares by the assessee is assessable under the head ‘short term capital gains’ or under the head ‘income from business’ from A.Y. 2005-06 onwards and the Hon'ble ITAT has held that gains from sale of shares in the case of the assessee is assessable under the head ‘capital gain’. Copy of the orders of the Tribunal for assessment years 2005-06 to 2008-09 in and 4534/Mum/2011 dated 25.02.2015 and ITA Nos. 8952/Mum/2010, 1412 & 1413/Mum/2012 dated 16.10.2015 are placed on record. The learned counsel for the assessee submitted that the CIT(A), following the orders of the Hon'ble Tribunal, held that the gains arising from sale of shares during the current assessment year is assessable under the head ‘capital gain’ and not as business income as held by the AO. The learned counsel, therefore, pleaded that the same may be followed for the current assessment year also.
The learned D.R., on the other hand, vehemently supported the order of the Assessing Officer.
On hearing both the parties and perusing the orders of the Authorities below and the Coordinate Bench’s decision we find that during the current assessment year the AO treated the gains from sale of shares as business income by observing as under: -
6.1 From the ratio of the above said orders & judgment it is clear that the assessee is also carrying out transactions in shares frequently within a period of few days and also upto 200 days. Therefore, the contention of the assessee that he is a investor is disproved by the above said judgment. Accordingly, the same cannot be given concessional treatment of STCG. c) The assessee has contented that the Demat account proved the delivery of shares taken and given by him. This contention of the assessee is not acceptable because the judgment cited above clearly show that even if the shares are sold within the said period of few days and also upto 200 days the same partake the character of share trading.
Shri Sriram Kapur d) It is further noticed that appeal of the assessee on the same grounds and same facts is already dismissed by the ld.CIT(A) for the AY 2005-06, 2006-07 and 2007-08. e) The assessee has entered into huge number of transactions within a short period of time and with frequency of various scrips. This all go to prove that the assessee is of well versed trader and not a investor as claimed in the return of income. f) The case laws relied upon by the assessee vide letter dt.25.03.2013 are distinguishable. 6.2 In view of all the facts discussed above and in view of the volume, frequency, continuity and regularity, it is held that the assessee is a trader in shares and therefore, the income claimed under the head capital gains amounting to Rs. 1,95,02,896/- is chargeable under the head 'Profits and Gains from Business or Profession.'” The CIT(A), following the order of the Coordinate Bench for assessment years 2005-06 to 2009-10 deleted the addition made by the AO as business income.
On a perusal of the decision of the Coordinate Bench in assessee’s case for earlier assessment years we find that the Tribunal, for assessment years 2005-06 to 2008-09, has held that the gains on sale of shares in the case of the assessee is assessable under the head capital gains and not as business income. The learned CIT(A) followed the Coordinate Bench’s decision and deleted the addition made by the AO. In the circumstances we do not see any infirmity in the order passed by the CIT(A). Thus, the grounds raised by the Revenue are rejected.
In the result, the appeal filed by the Revenue is dismissed.