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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: S/SHRI B.R.BASKARAN & SHRI SANDEEP GOSAIN
स्थामी रेखा सं./जीआइआय सं./PAN. :AAACD-1366K अपीऱाथी की ओर से / Appellant by : Shri C B R Murthy प्रत्यथी की ओर से/ Respondent by : Shri Udaya B Jakke सुनवाई की तारीख / Date of Hearing :10.12.2015 घोषणा की तारीख /Date of Pronouncement :10.12.2015 O R D E R
PER B.R.BASKARAN,AM:
The assessee has filed these appeals challenging the order of ld. CIT(A)-22, Mumbai and they relate to the assessment years 2006-07 and 2008-09.
The assessee is aggrieved by the decision of ld. CIT(A) in assessing the capital gains arising on sale of shares as business income of the assessee.
The ld. AR submitted that the assessee has carried out the transactions of purchase and sale of shares as its investment activity and accordingly declared the profit/loss arising from sale of shares as income under the head Capital gains. However, the AO treated the activity of the assessee as trading activity and accordingly, assessed the gain arising on sale of shares as business income. However, the AO has assessed the loss on arising on sale of shares as capital gains. The ld. AR submitted that the AO has taken inconsistent view with regard to the same set of transaction and hence the ld. CIT(A) was not justified in confirming the order of ld.CIT(A).
The ld. AR submitted that the assessee would be satisfied, if loss, arising on sale of shares also is also treated as business loss and allowed set off of the same against the gain arising on sale of shares, which was treated as business income.
On the contrary, the ld.DR supported the order of the ld.CIT(A).
Having heard the rival contentions, we are of the view that there is merit in the submissions of the assessee. If the activity of purchase and sale of shares is treated as business activity of the assessee, then loss/gain arising on sale of shares should be assessed as business income, meaning thereby, loss arising on sales should be treated as business loss in the same way as the gain arising on sale of shares was treated as business gain. Accordingly gain/loss arising on sale of shares should be adjusted against each other and the net income should be assessed under the head “Income from Business”. Accordingly, we are not able to agree with the view taken by tax authorities. Accordingly, we set aside the orders passed by ld.CIT(A) on this issue in both the years and restored the same