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Income Tax Appellate Tribunal, IN THE INCOME TAX APPELLATE TRIBUNAL
Before: SHRI BEFORE SHRI G.D. AGRAWALG.D. AGRAWALG.D. AGRAWAL & G.D. AGRAWAL & AND & MS. SUCHITRA KAMBLE
The only common issue raised in these two appeals before the Tribunal is whether the profit from sale of shares is assessable as business income or capital gains. The assessee had claimed the same to be capital gains while the Assessing Officer has treated the same as income from business. Learned CIT(A) has sustained the order of the Assessing Officer. Hence, these two appeals by the assessee.
The facts of the case are that the ITAT had disposed of the assessee’s appeals for four years i.e., for assessment year 2005-06,
2 ITA-1820/Del/2010 & 2567/Del/2012 2006-07, 2007-08 & 2008-09 by common order dated 26th April, 2013. In the said order, the ITAT upheld the finding of the Assessing Officer and had dismissed the appeal of the assessee. The assessee had filed the appeals to Hon'ble Jurisdictional High Court. Hon'ble Jurisdictional High Court, vide order dated 28th July, 2014, dismissed the assessee’s appeals for assessment year 2005-06 & 2006-07. However, so far as the appeals for assessment year 2007-08 & 2008-09 are concerned, Hon'ble Jurisdictional High Court, vide order dated 24th September, 2014, remanded the matter to the Tribunal with the following finding:-
By order dated 28th July, 2014, after referring to the “5. factual matrix of the assessment years 2005-06 and 2006- 07, we had dismissed and 302/2014, but notice was issued in the present ITAs, which relate to assessment years 2007-08 and 2008-09. In these years, we notice that the Assessing Officer did not deal with the facts, but simply followed his predecessor’s order for the assessment years 2005-06 and 2006-07 to hold that the transactions relating to shares treated by the appellant- assessee as short term capital gains should be taxed under the head ‘Profits and gains of Business or Profession’.
The Commissioner of Income Tax (Appeals) also did not go in depth and detail and preferred to rely upon the earlier orders. In the first appellate order relating to assessment year 2007-08, reference was made to transactions in share of 8 companies, which were held for a period ranging from 6 days to 97 days, but learned counsel for the appellant-assessee states that there were other shares too, which were held for longer period. For the assessment year 2008-09, there is no discussion and elucidation.
It is clearly noticeable that the impugned order passed by the Tribunal does not refer to the factual matrix relating to the assessment years 2007-08 and 2008-09, except for recording as under :-
“In other assessment years also, the frequency of transactions were quite large. Learned CIT(Appeals) has reproduced the details of transactions and observed that 3 ITA-1820/Del/2010 & 2567/Del/2012 some of the shares were kept only for one, two or three days………………………………………………. As far as other years are concerned, we do not find any merit in the appeals of assessee on this issue. The assessee has to be treated as a trader in shares in all the assessment years.”
We notice that the appellant-assessee had declared long-term capital gains and, therefore, the stand of the appellant-assessee is that he was an investor as well as trader in shares.
In view of the aforesaid factual position, we have to hold that the Tribunal has not dealt with the contentions raised after examining and ascertaining the facts in detail. Answer or conclusion has been recorded without reference to facts of the particular year. The factual position can vary and can be materially different. The question of law, therefore, has to be answered in favour of the appellant- assessee, but with an order of remand. We clarify that we have not examined the contentions of the appellant- assessee or the respondent-Revenue on merits. The appeals are disposed of.
To cut short delay, parties are directed to appear before the Tribunal on 3rd November, 2014, when a date of hearing will be fixed.”
At the time of hearing before us, both the parties fairly agreed that the Assessing Officer has not recorded the facts of these two years in the assessment order. He has simply followed the order of his predecessor in the earlier year. Since Hon’ble High Court has held that the facts of each year are to be considered before arriving at the conclusion whether the profit from sale of shares is business income or not, it would be essential to have the relevant facts and details with regard to sale and purchase of shares by the assessee during each of the assessment years under appeal. Since such details are not available on record, both the parties fairly admitted that the matter may be remanded to the file of the Assessing Officer. In view of the above admission of both the parties, we deem it proper to set aside
4 ITA-1820/Del/2010 & 2567/Del/2012 the orders of authorities below on this point and restore the matter to the file of the Assessing Officer. We direct him to discuss the facts of each year in detail in the assessment order and thereafter readjudicate the issue in accordance with law. Needless to mention that he will allow adequate opportunity of being heard to the assessee while giving effect to this order.
In the result, both the appeals of the assessee are deemed to be allowed for statistical purposes. Decision pronounced in the open Court on 19.08.2016.