CIT v. Associated Industrial Development Co. (P.) Ltd.

82 ITR 586Supreme Court of India1971#1154 most cited

What is CIT v. Associated Industrial Development Co. (P.) Ltd. authority for?

The assessee has the burden to prove whether shares are held as investments or as stock-in-trade. This requires the assessee to produce evidence from their records clearly distinguishing between shares held for investment and those held as stock-in-trade.

98

judgments rely on this decision, according to BharatTax’s citation analysis of 366,470 Indian tax judgments — from 2010 to 2025.

Also referred to as

CIT v. Associated Industrial Development Co. · 82 ITR 586 · capital gains vs business income · shares as investment or stock-in-trade · burden of proof on assessee · evidence from records · distinction of share holdings · Section 14 · Section 143 · classification of share transactions

Sections most often in play

Section 10(38)Section 114Section 139Section 142(1)Section 143(2)Section 143(3)Section 147Section 148

Issues it is cited on

short term capital gainsshort term capital gainlong term capital gainslong term capital gainsection 10transfercompanysection 143businesssection 14section 143(3)india

Judgments citing CIT v. Associated Industrial Development Co. (P.) Ltd.

ACIT, New Delhi vs. M/S. Ascot Investments, New Delhi

In the result, the appeal of the revenue and the cross objection of the

ITA 4645/DEL/2013[2009-10]Status: DisposedITAT Delhi27 Jan 2016AY 2009-10

Bench: Shri J.S. Reddy & Shri A.T. Varkeyita No.4645/Del./2013 (Assessment Year : 2009-10) Acit, Central Circle 25, Vs. M/S. Ascot Investments, New Delhi. 102, Ratan Jyoti Building, 18, Rajendra Place, New Delhi – 110 008. (Pan : Aamfa6159Q) Co No.177/Del/2014 (In Ita No.4645/Del./2013) (Assessment Year : 2009-10) M/S. Ascot Investments, Vs. Acit, Central Circle 25, 102, Ratan Jyoti Building, New Delhi. 18, Rajendra Place, New Delhi – 110 008. (Pan : Aamfa6159Q) (Appellant) (Respondent)

For Appellant: S/Shri Ved Jain, Advocate & Ashish Chadha, CAFor Respondent: Shri S.K. Jain, DR
Section 153C

…es. (i) Ram Narain Sons (P) Ltd. v CIT as reported in 411TR 534 (SC), (ii) Dwarkadas Kesardev Morarka as reported in 44 ITR 625 (SC), (iii) CIT vs. Madan Gopal Radheylal as reported in 73 ITR 652 (SC) (iv) CIT v. Associated Development Co. Ltd. as reported in 82 ITR 586 (SC). 20. The above judgments clearly state that the same person can be a trader as well as investor in shares. 21. In a recent decision of Lucknow Bench of the Tribunal in the case of Sarmath Infrastructure (P) Ltd. as reported in 16 DTR (Lucknow) (Trib) 97, a view had been taken in favour of the assessee after fully considering the CBDT circular…

Sobhagya Mal Singhvi, Mumbai vs. DCIT 12(3), Mumbai

ITA 5085/MUM/2012[2008-09]Status: DisposedITAT Mumbai01 Jan 2016AY 2008-09
For Appellant: Shri N. Jayendra (AR)For Respondent: Shri B.S.N. Raju-(DR)
Section 143(3)Section 254(1)

…आयकर आयकर अपीलीय अपीलीय अिधकरण अिधकरण, " ई” खंडपीठ खंडपीठ मुंबई मुंबई आयकर आयकर अपीलीय अपीलीय अिधकरण अिधकरण खंडपीठ खंडपीठ मुंबई मुंबई INCOME TAX APPELLATE TRIBUNAL,MUMBAI-“E”,BENCH सव"ी राजे"", लेखा सद"य एवं एवं संजय गग", "याियक सद"य एवं एवं Before S/Sh. Rajendra,Accountant Member & Sanjay Garg,Judicial Member आयकर आयकर अपील अपील संसंसंसं/.ITA No.5085/Mum/2012,िनधा"रण िनधा"रण वष" वष"/Assessment Year-2008-09 आयकर आयकर अपील अपील िनधा"रण िनधा"रण वष" वष" Shri Sobhagya Mal Singhvi The DCIT-12(3) 2nd Floor, Jeevan Sahakar Bldg. Vs. Aayakar Bhavan, M.E. Road Sir P.M. Road, Fort,Mumbai-1. Mumbai-400 020. PAN:AAJPS 51…

DCIT 9(1), Mumbai vs. Envision Investment & Finance P. Ltd, Mumbai

The appeal of the AO stands dismissed

ITA 2322/MUM/2011[2007-08]Status: DisposedITAT Mumbai01 Jan 2016AY 2007-08

Bench: S/Sh. Rajendra & Sandeep Gosainआयकर अपील सं/.Ita No.2322/Mum/2011,िनधा"रण वष"/Assessment Year-2007-08 Acit-Range-9(1) Envision Investment & Finance Room No.223, Aayakar Bhavan Pvt. Ltd. 402, 4Th Floor, Vyapar Bhavan M.K. Road Vs Mumbai-400 020. 386/370, Narsi Natha Street Masjid (W) Mumbai-400 009. Pan: Aaace 2990 G (अपीलाथ" /Appellant) (""थ" / Respondent) आयकर अपील सं/.Ita No.1376/Mum/2011,िनधा"रण वष"/Assessment Year-2007-08 Envision Investment & Finance Pvt. Acit-Range-9(1) Ltd., Masjid (W) Mumbai-400 020. Mumbai-400 009. Vs (अपीलाथ" /Appellant) (""थ" / Respondent)

For Appellant: Shri S.C. Tiwari & Ms. Rutuja N.PawarFor Respondent: Shri Manjunath R. Swamy
Section 143(3)Section 254(1)

…tfolio into trading investment would not affect the reality of the situation.He referred to the circular no.4, 2007 dated 15.10.2007 issued by the Central Board of Direct Taxes along with the cases of associated industrial development company(Private Limited)(82 ITR 586),Holck Larsen(160 ITR 67).He further held that motive of the assessee was appearing from the fact that the shares purchased and sold were part of his trade/business, that it has sold and purchase shares in voluminous quantity,that it had traded in 25.89 lakhs shares of five companies(purchase of Rs.70.39 lakhs and sales of Rs.91.44 lakhs),that und…

ACIT 12(2), Mumbai vs. Rajesh Amratlal Shah, Mumbai

In the result, appeal filed by Revenue is dismissed

ITA 7190/MUM/2012[2008-09]Status: DisposedITAT Mumbai30 Dec 2015AY 2008-09

Bench: Shri B.R. Baskaran, Am & Shri Sandeep Gosain, Jm

For Respondent: Shri Viraj M. Shah

…is as under: - “2.3 The assessment order, submissions made for the appellant and materials on record have been considered. The 4 Shri Rajesh Amratlal Shah Hon'ble Supreme Court in the case of CIT vs. Associated Industrial Development Co. P. Ltd. reported in 82 ITR 586 as well as in the case of CIT vs. H Holck Larsen reported in 160 ITR 67 has laid down various principles, which has been considered by the CBDT for issuing the Circular No.4/2007 dated 15/06/2007. In short, the principles Laid down in those cases for deciding the question of nature of the transaction as trading or investment, mainly/broadly are; -…

DCIT, New Delhi vs. M/S Vic Enterprises Pvt. Ltd., New Delhi

ITA 2863/DEL/2010[2006-07]Status: DisposedITAT Delhi22 Dec 2015AY 2006-07

Bench: Shri I.C. Sudhir & Shri L.P. Sahu Assessment Year: 2006-07 Deputy Cit, Vs. Vic Enterprises Pvt. Ltd., 4Th Floor, Punjabi Bhawan, Circle-17(1), New Delhi. 10-Rouse Avenue, New Delhi. (Pan: Aaacv0132B) (Appellant) (Respondent) Assessment Year: 2008-09 Asstt. Cit, Vs. Vic Enterprises Pvt. Ltd., 4Th Floor, Punjabi Bhawan, Circle-17(1), New Delhi. 10-Rouse Avenue, New Delhi. (Pan: Aaacv0132B) (Appellant) (Respondent)

For Appellant: Shri MP Rastogi, AdvFor Respondent: Shri Sumit Chandra Sharma, CIT- DR
Section 111ASection 143(3)Section 14A

…er records are maintained as per report u/s 142(A) issued by the special auditor. • Certain Shares are held as investment to get tax exemption u/s. 10(38). 10.2 The AO relied on the following case laws: , . • CIT vs. Associated Industrial Development Co. Ltd. 82 ITR 586 (Se) • Karampura Development Co. Ltd. Vs. CIT 44 ITR 362 (Se) • Dalmiya cements Ltd. vs. CIT 12 ITR 50 (Patna) • CIT vs. British Paints 188 ITR 44, 49 (SC). 11.1 The main contentions of the AR as gathered from the various submissions made are as under: • Shares of Dabur India Ltd. have been held as investment is by the assessee as a promoter for c…

ACIT, Circle - 7, Kolkata vs. C.D. Equifinance Pvt. Ltd., Kolkata

In the result, all the appeals filed by the Revenue are dismissed, while the appeal of the assessee is allowed

ITA 1790/KOL/2008[2005-06]Status: DisposedITAT Kolkata09 Dec 2015AY 2005-06

Bench: Shri P.M. Jagtap & Shri S.S. Viswanethra Ravi

Section 10(38)

…therefore, gather the intention with reference to assessee's conduct and the manner in which shares are accounted and dealt with in the books of account of the assessee. 25. The Supreme Court in the case of CIT Vs. Associated Industrial Development Co. Ltd. [82 ITR 586] has observed that whether any part of the holding of shares is by way of investment or forms part of the stock in trade, is a matter which is within the knowledge of the assessee and therefore, the assessee should be in a position to produce evidence from its record to establish the distinction between the shares held as stock in trade and by way…

Ashish C Singhania, Mumbai vs. ITO 12(3)-1, Mumbai

ITA 3475/MUM/2012[2008-09]Status: DisposedITAT Mumbai28 Oct 2015AY 2008-09
For Respondent: Ms. Vinita J. Menon
Section 143(3)Section 254(1)

…treated as business asset and consequently capital gain couldnot be treated as business income. The FAA considered AO's order, submissions made for the assessee and materials on record and referred to the cases of Associated Industrial Development Co. P. Ltd.(82 ITR 586) and H Holck Larsen(160 ITR 67)and the Circular No.A/2007 dated 15/06/2007 issued by the CBDT.He held that the principle of res judicata was not applicable to income tax proceedings and the nature of transactions is to be adjudged on the basis of the facts and circumstances in each year,that in the present day scenario of transactions in BSE/NSE o…

CIT vs. Amit Jain

ITA - 517 / 2012HC Delhi03 Mar 2015
Section 143

…in a number of decisions. These include Raja Bahadur Visheshwar Singh v. CIT, (1961) 41 ITR 685 (SC); Commissioner of Income Tax, U.P v. Madan Gopal Radhey Lal, [1969] 73 ITR 652 (SC); Commissioner of Income Tax v Associated Industrial Development Company 82 ITR 586 (SC); P.M. Mohammed Meerakhan v. Commissioner of Income- tax, Kerala, 73 ITR 735 (S.C.) and Commissioner of Income Tax v NSS Investments Ltd 2007 (277) ITR 149 (Mad). It was in the light of these decisions that the CBDT Circular No. 4/2007, was issued, indicating the principles applicable in this regard. These criteria are: 2015:DHC:2076-DB…

Sanjeev Mittal vs. Commissioner of Income Tax

The appeal is allowed in the above

ITA/520/2014HC Delhi02 Feb 2015

…nclude that the income derived from sale of shares was not business income but capital gains. In arriving at this decision, the CIT(Appeals) was guided by several binding decisions, such as CIT V. Associated Industrial Development Company (P) Ltd. (1971) 82 ITR 586 (SC), Raja Bahadur Kamakhya Narayan Singh V. CIT (1970) 77 ITR 253 (SC) and CIT V. Holck Larsen (1987) 160 ITR 67 (SC) etc. In fact the order of the CIT (Appeals) with respect to analysis of the facts covers a considerable part of the order. 12. Likewise the analysis of case law and the inference is drawn on the basis of its application run…

Acee Enterprises vs. Commissioner of Income Tax – I

The appeals are disposed of

ITA/300/2014HC Delhi24 Sept 2014

…held and other relevant criteria, which have been elucidated in Circular No.4 of 2007 dated 15th June, 2007 as well as the decision of the Supreme Court in Commissioner of Income Tax (Central), Calcutta Vs. Associated Industrial Company Pvt. Ltd., [1971] 82 ITR 586 and Fidelity Northstar Fund, In Re, [2007] 288 ITR 641 (AAR), which are 2014:DHC:4984-DB ITAs 300/2014 & 304/2014 Page 3 of 4 mentioned in the aforesaid circular. 5. By order dated 28th July, 2014, after referring to the factual matrix of the assessment years 2005-06 and 2006-07,…

Radials International vs. Asstt. Commissioner of Income Tax

ITA/485/2012HC Delhi25 Apr 2014

Bench: The Court Is: “Whether, The Shares Invested Through A Portfolio Management 2014:Dhc:2173-Db

Section 271(1)(c)Section 88E

…and not at the time of depositing the money. This proposition is supported by the judgment of the Supreme Court reported as CIT-Calcutta v. Associated Industrial Development 2014:DHC:2173-DB ITA No.485/2012 Page 10 Company, AIR 1972 SC 445 = (1971) 82 ITR 586 (SC), in which it was held that: “…it was open to the assessee to contend that even on the assumption that it had become a dealer and was no longer an investor in shares the particular holdings which had been cleared and the sales of which had resulted in the profit in question had always been treated by it as an investment. It can hardly b…

CIT vs. D & M Components Ltd

Appeal is allowed

ITA - 561 / 2012HC Delhi21 Apr 2014

…one it indicates that the main intention of the appellant was to earn income out of these shares which have been claimed to be under the head of short term capital gains….” 10. In Commissioner of Income Tax v Associated Industrial Development Company (P) Ltd. 82 ITR 586 (SC) the Supreme Court held that: 2014:DHC:2064-DB ITA 561/2012 & ITA 566/2012 Page 9 “3…it was open to the assessee to contend that even on the assumption that it had become a dealer and was no longer an investor in shares the particular holdings which had been cleared and the sales of which had resulted in the profit in question had always bee…

CIT vs. Devasan Investment Pvt Ltd

ITA - 1103 / 2011HC Delhi16 Apr 2014

…resent appeals. 5. The revenue contends that the assessee failed to keep separate accounts for investments and normal trading activities. Relying on the decisions, especially in Commissioner of Income Tax v. Associated Industrial Development Company, 82 ITR 586 (SC), it was contended that the volume, frequency and quantum test as well as whether the assessee maintains separate investment accounts is a strong indicator to examine whether the profit is capital gain or income from business. It was contended that the assessee is engaged in the business of a share broker. Its investments in the impugned…

CIT vs. Devasan Investment Pvt Ltd

ITA - 1102 / 2011HC Delhi16 Apr 2014

…resent appeals. 5. The revenue contends that the assessee failed to keep separate accounts for investments and normal trading activities. Relying on the decisions, especially in Commissioner of Income Tax v. Associated Industrial Development Company, 82 ITR 586 (SC), it was contended that the volume, frequency and quantum test as well as whether the assessee maintains separate investment accounts is a strong indicator to examine whether the profit is capital gain or income from business. It was contended that the assessee is engaged in the business of a share broker. Its investments in the impugned…

Commissioner of Income Tax-VII vs. Avinash Jain

The appeal is dismissed

ITA/703/2012HC Delhi09 Jan 2013
For Appellant: Mr Sanjeev Rajpal, AdvFor Respondent: None

…ITA 703/2012 Page 1 of 5 IN THE HIGH COURT OF DELHI AT NEW DELHI % Judgment delivered on : 09.01.2013 + ITA No.703/2012 COMMISSIONER OF INCOME TAX-VII ..... Appellant versus AVINASH JAIN ..... Respondent Advocates who appeared in this case : For the Appellant : Mr Sanjeev Rajpal, Adv. For the Respondent : None CORAM:- HON’BLE MR JUSTICE BADAR DURREZ AHMED HON’BLE MR JUSTICE R.V. EASWAR JUDGMENT BADAR DURREZ AHMED, J (ORAL) This appeal has been filed by the revenue against the order dated 20.07.201…

Commissioner of Income Tax, Rajahmundry vs. M/s. Kakinada Coop. Town Bank LTd., Kakinada

ITTA/485/2012HC Telangana15 Nov 2012

Bench: GODA RAGHURAM,M.S.RAMACHANDRA RAO

CIT vs. Vinay Mittal

ITA/1172/2011HC Delhi27 Apr 2012

Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE R.V.EASWAR

…above instructions, it is proposed to update the above instructions for the information of the assessees as well as for guidance of the Assessing Officers. 5. In the case of CIT (Central), Calcutta v. Associated Industrial Development Co. (P) Ltd. [1971] 82 ITR 586, the Supreme Court observed that : “Whether a particular holding of shares is by way of investment or forms part of the stock-in-trade is a matter which is within the knowledge of the assessee who holds the shares and it should, in normal circumstances, be in a position to produce evidence from his records as to whether it has maintained an…

Commissioner of Income Tax vs. Pnb Finance & Industries Ltd

Accordingly, the same stands dismissed without any order as to

ITA/306/2010HC Delhi18 Oct 2010
Section 143(1)Section 143(2)Section 234BSection 260ASection 271(1)(c)

…dealt with the shares held as stock-in-trade and investments and what should be the test for such a distinction. The Board referred to the decisions in Commissioner of Income-tax (Central, Calcutta v. Associated Industrial Development Co. (P) Ltd., [1971] 82 ITR 586 (SC) and Commissioner of Income-tax, Bombay v. H. Holck Larsen, [1986] 160 ITR 67 (SC), the Authority for Advance Rulings (AAR) (288 ITR 641) and after reproducing certain passages therefrom, gave the following guidelines: “10. CBDT also wishes to emphasise that it is possible for a taxpayer to have two portfolios, i.e., an investment portfo…