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Income Tax Appellate Tribunal, MUMBAI BENCHES “A”, MUMBAI
आदेश / O R D E R
Per Joginder Singh (Judicial Member) The assessee is aggrieved by the impugned order dated 14/05/2012 of the ld. First Appellate Authority, Mumbai.
During hearing of this appeal, the ld. counsel for the assessee, Shri Vijay Mehta, only pressed ground no.1 (a) by contending that (b) and (c) is in support of the above ground and did not press sub-ground (d) & (e) of ground no.1, ground no.2 and 3, therefore, the grounds, which were not pressed/not agitated are dismissed as not pressed.
The only ground which was argued by the ld. counsel pertains to assessing income declared under the head capital gain (long term and short term) as profit & gains from business or profession without appreciating the fact that the assessee in its activity has made investment from the last number of years and the income therefrom was declared and assessed under the head long term capital gains or short term capital gains, as the case may be, after due verification and passing a order u/s 143(3) of the Act. Reliance was placed upon the decision in CIT vs Gopal Purohit 336 ITR 287 against which the SLP was dismissed by the Hon’ble Apex Court. The ld. DR, Shri Yogesh kamat, on the other hand, defended the conclusion arrived at in the impugned order.
3.1. We have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee firm is engaged in the investment in shares and derivatives (futures and options) for the last number of years. The assessee in his return declared capital gain both long term and short term in its return filed on 16/09/2008, declaring income of Rs.1,29,41,877/-, speculation loss of Rs.31,00,229/-, long term capital gain of Rs.29,52,771/-, short term capital gain of Rs.70,78,206/- and dividend of Rs.2,84,500/- as exempt. The assessee did share transation and shown as investment in its accounts. The ld. Assessing Officer completed assessment u/s 143(3) on a income of Rs.2,58,25,380/- treating the capital gains (short term gain of Rs.70,78,206/- and Rs.29,52,771/- as long term capital gain ) as “profit & gains from business or profession. On appeal, the ld. Commissioner of Income Tax (Appeals) affirmed the stand taken in the assessment order. The assessee is aggrieved and is in appeal before this Tribunal.
3.2. If the observation made in the assessment order, leading to addition made to the total income, conclusion drawn in the impugned order, material available on record, assertions made by the ld. respective counsel, if kept in juxtaposition and analyzed, there is no dispute to the fact that the assessee has been showing the amount as investment in shares and securities for number of years. The assessee also offered the income under the head long term and short term gains, as the case may be and the department had been assessing as such in number of years in the past. It seems that the assessee treated the long term capital gain and short term capital gain as profit and gains from business or profession on the ground that assessee firm is promoted by partners, who are running big brokerage house and the assessee is also dealing in derivatives and speculations in shares and further the frequency of the trade is high. In such a situation, the decision of the Tribunal and also from the Hon’ble High Court in CIT vs Gopal Purohit (336 ITR 287) (Bom.) order dated 06/01/2010, SLP dismissed by Hon’ble Apex Court comes to the rescue of the assessee. The Tribunal in that case held that the delivery based transaction should be treated as those in the nature of investment transactions and the profit received therefrom should be treated either as long term or short term as the case may be depending upon the period of holding. We have perused the records along with the period of holding, books of accounts maintained by the assessee and the fact that identically the Department had been accepting the claim of the assessee, therefore, we are of the view that the assessee is having a good case in its favour. Our conclusion is even based upon the conduct of the Department itself wherein, the Assessing Officer had been accepting such gains in the past either as long term capital gain or short term capital gain, as the case may be, while framing the assessment u/s 143(3) of the Act in subsequent assessment years. It is also noted that average period of holding is 113 days (page -11 of the paper book) and details of the shares is available at page 7, 11 of the paper book. Even on the issue of consistency, the assessee is having a good case in its favour as unless and until contrary facts are brought on record, consistency has to be followed. On the issue of consistency, we are supported by the following judicial pronouncements:- i. Parshuram Pottery Works Ltd. vs ITO 106 ITR 1 (SC) ii. Security Printers 264 ITR 276(Del.) iii. CIT vs Neo Polypack Pvt. Ltd. 245 ITR 492 (Del.) iv. CWT vs Allied Finance Pvt. Ltd. 289 ITR 318 (Del.) v. Berger Paints India Ltd. vs CIT 266 ITR 99 (SC) vi. DCIT vs United Vanaspati (275 ITR 124) (AT)(Chandigarh ITAT) vii. Union of India vs Kumudini N. Dalal 249 ITR 219 (SC) viii. Union of India vs Satish Pannalal Shah 249 ITR 221 ix. B.F.Varghese vs State of Kerala 72 ITR 726 (Ker.) x. CIT vs Narendra Doshi 254 ITR 606 (SC) xi. CIT vs Shivsagar Estate 257 ITR 59 (SC) xii. Pradip Ramanlal Seth vs UOI 204 ITR 866 (Guj.) xiii. Radhaswamy Satsang vs CIT 193 ITR 321 (SC) xiv. Aggarwal warehousing & Leasing Ltd. 257 ITR 235 (MP)
The sum and substance of the aforesaid judicial pronouncements is that on the basis of principle of judicial discipline, consistency has to be followed and once in a particular year, if any view is taken, in the absence of any contrary material, no contrary view is to be taken as finality to the litigation is also a principle which has to be followed. Before us, no contrary facts or any adverse material was brought on record by the Revenue, therefore, we find merit in the argument of the assessee, thus, this ground of the assessee is allowed.
Finally, the appeal of the assessee is partly allowed.
This Order was pronounced in the open court in the presence of ld. representatives from both sides at the conclusion of the hearing on 10/02/2016.