DARSHAK DADBHAWALA,MUMBAI vs. ASST CIT 16(2), MUMBAI

The solitary issue raised in both the appeals under consideration relates to the claim of the assessee relating to short term capital gains. In the assessment, AO treated the short term capital gains as „business income‟ of the assessee. Matter travelled to the first appellate authority.

During the proceedings before the first appellate authority, CIT (A) artificially divided the gains basing on the holding period. The gains relating to the shares held by the assessee for a period upto „7‟ days was treated as „business income‟ and the balance was considered as „short term capital gains‟.

During the proceedings before us, mentioning the above facts, Ld Counsel for the assessee brought our attention to the order of the Tribunal for the assessment year 2008-2009 in & 4411/M/2012 (AY 2008-2009), dated 5.12.2014 and submitted that the facts were similar and the decision of the CIT (A) was also identical which constitutes dividing the gains based on the holding period. This particular approach of the CIT (A) was not appreciated by the Tribunal and followed the principle of consistency and granted the relief to the assessee. Vide the said order (supra), Tribunal directed the AO to treat the entire gains as „short term capital gains‟. The contents of para 8.2 of the said Tribunal‟s order are relevant in this regard and the same read as under: “8.2......in our considered view, the assessee is an investor who has been assessed as investor since AY 2000-01 onwards. We, therefore, do not find any reason to deviate from the rule of consistency. We, therefore, do not find any reason in the findings of the Ld CIT (A) to treat the assessee as an investor where the holding period was less than 7 days. We, accordingly, set aside the findings of the Ld CIT (A) and direct the AO to treat the entire short term capital gains as such.” 3. Considering the above settled nature of the issue, and the Revenue‟s failure to demonstrate as to why the rule of consistency should not be followed when the facts are similar, we are of the opinion that the grounds raised