ACIT CIR 16(1), MUMBAI v. VEENA S. KALRA, MUMBAI

ITA 2403/MUM/2012 | 2008-2009
Pronouncement Date: 10-07-2013 | Result: Allowed

Appeal Details

RSA Number 240319914 RSA 2012
Assessee PAN AAHPK4389F
Bench Mumbai
Appeal Number ITA 2403/MUM/2012
Duration Of Justice 1 year(s) 2 month(s) 29 day(s)
Appellant ACIT CIR 16(1), MUMBAI
Respondent VEENA S. KALRA, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 10-07-2013
Appeal Filed By Department
Order Result Allowed
Bench Allotted F
Tribunal Order Date 10-07-2013
Date Of Final Hearing 30-05-2013
Next Hearing Date 30-05-2013
Assessment Year 2008-2009
Appeal Filed On 11-04-2012
Judgment Text
F IN THE INCOME TAX APPELLATE TRIBUNA F BENCH MUMBAI !' $ % BEFORE SHRI I.P. BANSAL JM AND SHRI KARUNAKARA RAO AM ./I.T.A. NO.2403/M/2012 ( & ' (' / ASSESSMENT YEAR :2008-2009) ACIT- CIRCLE 16(1) MATRU MANDIR MUMBAI 400 007 & / VS. VEENA S. KALRA 51-C ANITA MAOUT PLEASANT ROAD MUMBAI 400 006. ) $ ./PAN : AAHPK 4389 F ( )* /APPELLANT) .. ( + )* / RESPONDENT) )* - . / APPELLANT BY : SHRI O.P. MEENA DR + )* - . / RESPONDENT BY : MS. JELVIS HENRIQUES & CO & - /$ /DATE OF HEARING : 30.5.2013 01( - /$ /DATE OF PRONOUNCEMENT : 10.7.2013 2 2 2 2 / O R D E R PER D. KARUNAKARA RAO AM: THIS APPEAL FILED BY THE REVENUE ON 11.4.2012 IS AG AINST THE ORDER OF CIT (A)- 27 MUMBAI DATED 31.1.2012 FOR THE ASSESSMENT YEAR 2008-2009. IN THIS APPEAL REVENUE RAISED THE FOLLOWING EFFECTIVE GROUND WHICH READS AS UNDER: 1. ON THE FACTS & CIRCUMSTANCES AND IN LAW THE LD CIT (A) HAS ERRED IN TREATING THE TRANSACTION OF PURCHASE AND SALE OF SHARES AS STCG INSTEAD OF BUSINESS INCOME . 3. THE FACTS NECESSARY FOR THE ADJUDICATION OF THE SAID GROUND ARE THE ASSESSEE IS AN INDIVIDUAL AND FIELD THE RETURN DECLARING THE TOTAL INCOME OF RS. 3.16 CRS (ROUNDED OF). THE RETURN WAS REVISED U/S 139(5) OF THE ACT MAKING DOWNWARD REVISIONS OF HIS INCOME TO RS. 2 78 55 600/-. IN TH E REVISED RETURN OF INCOME ASSESSEE MADE A SIGNIFICANT REVISION QUA THE SHORT TERM CAPITAL GAINS (STCG) FROM RS. 2 54 92 016/- TO RS 2 17 24 104/-. THUS AS PER THE REVISED RETURN OF INCOME STCG IS RS. 2 17 24 104/-; INCOME FROM OTHER SOURCE S IS RS.1 70 071/-; BUSINESS INCOME IS RS. 60 03 269/-. IN ADDITION THE DIVIDE ND INCOME DECLARED IS RS. 9 68 732/- AND THE LTCG IS RS. 8 65 373/-. ASSESSEE IS ADMITTEDLY ENGAGED IN THE 2 BUSINESS OF DEALING IN DERIVATIVES AND F&O . DURING THE ASSESSMENT PROCEEDINGS AO RAISED THE ISSUE OF TREATING THE STCG AS BUSINES S INCOME OF THE ASSESSEE. ASSESSEE SUBMITTED THE FOLLOWING REPLY WHICH IS AS UNDER: (A) ALL INVESTMENTS HAVE BEEN MADE FROM OWN FUNDS NO BORROWED FUNDS. (B) SHE HAS EARNED DIVIDEND AS WELL AS LTCG WHICH SHOW THE INTENT . (C) IN THE AY 2006-07 & 2007-08 THE ASSESSEE HAS R ETURNED STCG AS WELL AS LTCG AND CLASSIFIED HER SHARE HOLDINGS AS INVESTMENT AND N OT AS STOCK IN TRADE . AN INVESTMENT REGISTER IS MAINTAINED ON FIFO BAS IS. IT SHOWS THE INTENT OF THE ASSESSEE. (D) FOLLOWING CHART HAS BEEN FURNISHED TO ESTABLISH HER INTENTION AS INVESTOR: AY 2008 - 2009 AY 2007 - 2008 AY 2006 - 2007 BUSINESS INCOME 59 30 192/ - 5 82 866/ - 86 178/ - STCG 2 17 24 104/ - 1 93 69 822/ - 16 50 313/ - LTCG 8 65 373/ - 5 53 412/ - 17 05 546/ - DIVIDEND INCOME 9 98 163/ - 7 85 782/ - 6 28 208/ - INCOME FROM OS 1 70 071/ - 1 13 213/ - 1 50 993/ - (E) THE TOTAL NUMBER OF SCRIPS ARE 31 NUMBER OF PURCHASE TRANSACTIONS 70 AND SALE TRANSACTIONS 104 . NUMBER OF DAYS ON WHICH TRANSACTIONS TOOK PLACE ARE LESS THAN 150 . THEREFORE IT CANNOT TERM AS TRADING 3.1. ON EXAMINING THE SUBMISSIONS OF THE ASSESSEE AO NOTICED THAT THE ASSESSEE DID NOT SUBMIT THE BALANCE SHEETS SHOWING THE NATUR E OF HOLDING OF SHARES AND NOTED THAT THE DATA PERTAINING TO THE CURRENT ASSESSMENT YEAR IS DISTINGUISHABLE VIS--VIS THE PARTICULARS RELEVANT FOR THE ASSESSMENT YEAR 20 06-07 AND 2007-08. DETAILS AS GIVEN IN THE TABLE IN THE SUBSEQUENT PARAGRAPHS WER E RELIED. AO ALSO NOTICED THAT THE HOLDING PERIOD OF THE SHORT TERM SHARES WAS NOT LONGER THAN A PERIOD OF 100 DAYS IN MANY TRANSACTIONS. AO REASONED THAT THE ASSESSEE WHO IS ALREADY IN THE BUSINESS OF DEALING IN SHARES DERIVATIVES FUTURES & OPTION S AND DEALT WITH THE COMMON SCRIPS QUA THE CAPITAL GAINS TRANSACTIONS IS ONLY SEGREGATED CERTAIN SHARES/BUSINESS PROFITS AS SHORT TERM CAPITAL GAINS FOR THE BENEFIT S OF THE TAX RATE. FURTHER HE DISTINGUISHED THE DECISION RELIED UPON BY THE ASSES SEE. FINALLY RELYING ON THE DECISION OF THE TRIBUNAL IN THE CASE OF SMT. HARSHA N MEHTA VS. DCIT IN ITA NO.1859/MUM/2009 DATED 17.7.2010 AND ALSO KEEPING IN VIEW THE CONTENTS OF CIRCULAR NO.4/2007 OF THE CBDT DATED 15.6.2007 AO TREATED THE IMPUGNED STCG OF RS. 2 17 24 104/- AS BUSINESS INCOME OF THE ASSESSEE WHICH IS THE SUBJECT MATTER OF THE APPEAL BEFORE US. THE VARIATION IN RATES OF TAXATION TO STCG AND BUSINESS INCOME MAKES THE DIFFERENCE AND OTHER-WISE THE TOTAL INCOME DETERMINED BY THE AO IS RS. 2 79 89 373/- AGAINST T HE REVISED INCOME OF RS. 3 2 78 55 600/-. AGGRIEVED WITH THE ABOVE ASSESSEE F ILED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 4. DURING THE PROCEEDINGS BEFORE THE CIT (A) THE A SSESSEE MADE SUBMISSIONS CONTENDING EACH OF THE ALLEGATIONS OF THE ASSESSING OFFICER AND PLEADED FOR TREATING THE IMPUGNED GAINS AS STCGS AND REVERSING THE ORDER OF THE AO. THE TABLE IMPORTED VIDE PARA 4 OF THE IMPUGNED ORDER CONTAINS THE ALLEGATION-WISE DISCUSSION. ARGUMENTS COUNTER ARGUMENTS REVOLVE AROUND THE CO MMON SCRIPS AKINNESS OF THE BUSINESS & STCG TRANSACTIONS SHORTER HOLDING PERIO DS NATURE OF THE SCRIPS INTENTION OF THE ASSESSEE SOURCE OF FUNDS BEING OWN FUNDS R E-ENTERED TRANSACTIONS ETC. RELYING ON CIRCULAR NO.4/2007 OF THE CBDT ASSESSEE SUBMITTED THAT ASSESSEE IS EMPOWERED TO DO TWO PORTFOLIOS IN THE CAPACITY OF T HE INVESTOR AS WELL AS JOBBER. FOR DEMONSTRATING THE CONSISTENCY OF CLAIM OF STCG OVER THE YEARS WHICH IS ACCEPTED BY DIFFERENT AOS ASSESSEE FURNISHED THE DETAILS OF SH ARE HOLDINGS AND PARTICULARS OF SCRIPS TRANSACTIONS TURNOVER OF PURCHASE AND SALE S MARKET VALUE ETC. FURTHER ON BEING CALLED TO FURNISH CERTAIN DETAILS RELATING TO SCRIPS RE-ENTERED BY THE ASSESSEE IT WAS SUBMITTED THAT IN 11 CASES OF SCRIPS ASSESS EE HAD THE HISTORY OF REENTRY IN TO THE SAME SCRIPS AND THE RELATABLE PROFITS WORKS OUT TO RS. 21 50 410/-. BEFORE THE CIT(A) THE QUESTION CAME UP FOR DEBATE ON WHY SHOULD THE ASSESSEE SELL A PARTICULAR SCRIP TODAY AND ACQUIRE THE SAME SUBSEQU ENTLY IF THE INTENTION IS TO HOLD THE SAME AS AN INVESTMENT ?. ASSESSEE COULD NOT ANSWER THE SAME WITH LOGIC/EVIDENCE. ASSESSEE QUANTIFIED THE ATTRIB UTABLE PROFITS OF SUCH REENTERED SHARE TRANSACTIONS AND THE SAME WORKS TO RS. 21 50 410/-. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE DATA FURNISHED CIT (A) CAME TO THE CONCLUSION THAT THE STCG OFFERED BY THE ASSESSEE SHOULD BE ACC EPTED WITHOUT ANY DISTURBANCE. HE HOWEVER CONFIRMED THE AOS FINDING TO THE EXTE NT OF RS. 21 50 410/- AND DENIED THE GAINS RELATABLE TO THE REENTERED SCRIPS. THUS ASSESSEES APPEAL WAS PARTLY ALLOWED ON THIS ISSUE. RELEVANT DISCUSSION IS GIVE N IN PARA 7 8.1 TO 8.7 OF THE IMPUGNED ORDER. AGGRIEVED WITH THE ABOVE REVENUE FILED THE PRESENT APPEAL BEFORE US. HOWEVER THE ASSESSEE ACCEPTED THE DECISION OF THE CIT(A) QUA THE CIT(A)S TREATMENT OF RS 21 50 410/- AS PROFITS AND GAINS FROM BUSINESS OR PROFESSION INSTEAD OF SHORT TERM CAPITAL GAINS AS ORIGINALLY CLAIMED BY THE ASSESSEE IN THE RETURNS. 4 5. DURING THE PROCEEDING BEFORE US LD DR RELIED HEAVILY ON THE ORDER OF THE AO. HE MENTIONED THAT ENTIRE SHORT TERM CAPITAL GA INS (STCG) OFFERED BY THE ASSESSEE AMOUNTING TO RS. 2 17 24 104/- SHOULD BE T REATED AS BUSINESS INCOME INSTEAD OF MERELY A SUM OF RS. 21 50 410/-. LD DR RELIED HEAVILY ON THE FACT THAT THE ASSESSEE CONCEDED THE AOS ALLEGATION REGARDING THE ORIGINAL INTENTION OF THE ASSESSEE AS INVESTOR AND THE SAME IS EVIDENT FROM T HE WAY ASSESSEE ACCEPTED FOR TAXING THE PROFITS OF RS 21 15 410/- AS BUSINESS IN COME INSTEAD OF ORIGINAL CLAIM OF STCG. THE PARTIES HAVE ACCEPTED THE FACT THAT ASSESSEE HAS NOT FILED ANY APPEAL BEFORE US AGAINST THE CIT (A) QUA THE SUSTAINING OF THE CONCLUSION OF CIT(A) TO THE EXTENT OF RS. 21 15 410/-. IT IS THE CLAIM OF THE R EVENUE THAT ASSESSEE WHEN ENGAGED IN THE BUSINESS OF DEALING IN F&O THE SHOR T TERM INVESTMENT IN SHARES CONSTITUTES AN ALLIED BUSINESS ACTIVITY MORE SO WHEN THE SCRIPS ARE ADMI TTEDLY COMMON. DR BROUGHT ATTENTION TO THE SAID PARA 4 FOR DETAILS. REGARDING INTENTION IT WAS MENTIONED THAT ASSESSEE DID NOT FILE RELEVANT PAPERS OF BALANCE SHEET TO DEMONSTRATE CONCLUSIVELY THE FACTS ABOUT THE BOOK E NTRIES OF THE SAID SHARES. ADMITTEDLY THE BALANCE SHEET COPIES WERE NOT FILED . FURTHER AO IS OF THE OPINION THAT WITH 31 SCRIPS INVESTED / TRADED FOR 174 TIMES WHICH INCLUDES SALES AND PURCHASE TRANSACTIONS OVER THE PERIOD OF 150 DAYS I N THE YEAR INVOLVING PURCHASE AND SALES OF RS. 25.37 CRS AND RS. 28.92 CRS RESPEC TIVELY. HE ALSO MENTIONED THAT WHATEVER HAVE BEEN PURCHASED ARE MOSTLY SOLD LEAVIN G THE OPENING STOCK MORE OR LESS EQUAL IN VALUE TO THE CLOSING STOCK. IT INDICA TES THE INTENTION OF QUICKER REALIZATION OF PROFITS A TRAIT IN THE BUSINESS WORLD AND NOT OF THE INVESTMENT ACTIVITY. FURTHER IT WAS MENTIONED THAT THERE IS NO ONE TO KNOW THAT THE INVESTMENT WAS MADE OUT OF OWN FUNDS ONLY. THE HOLDING PERIOD OF THE SHARES BEING MOSTLY LESS THAN 100 DAYS ALSO INDICATES THE BUSINESS NATU RE OF THE TRANSACTIONS. 6. FURTHER LD DR IS OF THE OPINION THAT ASSESSEES CONDUCT IN RE-ENTERING INTO THE SAME SCRIPS FOR TRADING INDICATES THE INTENTION OF BUSINESS ACTIVITY WHICH WAS APPRECIATED BY THE CIT (A) AND ACCEPTED BY THE ASSE SSEE. THE PROFIT EARNED BY THE ASSESSEE RELATABLE TO SUCH REENTERED TRANSACTIONS A MOUNTING TO RS. 21 50 410/- WAS HELD AS TRADING PROFITS OF THE ASSESSEE. IN THESE FA CTUAL CIRCUMSTANCES WHERE ASSESSEE ACCEPTED PART OF ITS IMPUGNED PROFITS AS B USINESS INCOME AND THE BALANCE OF GAINS SHOULD ALSO HAVE BEEN CONSIDERED AS BUSINE SS INCOME OF THE ASSESSEE. 5 CRITICIZING THE BOOK ENTRIES BASED ARGUMENT ON INTE NTION OF THE ASSESSEE LD DR CONTENDS THAT THE REENTERED TRANSACTIONS THOUGH CLA IMED TO HAVE BEEN ENTERED AS INVESTMENT REGISTER AND NOT AS STOCK IN TRADE IN TH E BOOKS OF ACCOUNTS ASSESSEE ACCEPTED SUCH REJECTION OF BOOKS. WHEN THE ASSESSEE SO ACCEPTS THE DECISION OF THE CIT(A) TO THE EXTENT OF RS 21 50 410/- THERE IS NO REASON WHY THE AO SHOULD ACCEPT THE ASSESSEES EXPLANATION ON THE BALANCE OF GAINS. MEANING THEREBY THE ENTRY IN THE BOOKS OF ACCOUNTS IS NO DIFFERENCE VIS--VIS IN TENTION OF THE ASSESSEE. 7. SUBMITTING FURTHER LD DR MENTIONED THAT THE REA L INVESTOR WITH A GOAL OF LONG TERM INVESTMENT IS NOT TEMPTED TO UNLOAD THE SHARES BEING THE TEMPORARY FALL FOR THE SHORT TERM BENEFITS AND NOT TEMPTED BY THE MARKET C ONDITIONS. HE MENTIONED THAT THE SHORT TERM GAIN REPORTED IS IN FACT BUSINESS TR ANSACTIONS AKIN TO THE BUSINESS OF DEALING IN DERIVATIVES AND F & O. ATTRIBUTING TO TH E ASSESSEES FAILURE TO FURNISH THE ORIGINAL BALANCE SHEETS FOR THE AY 2007-2008 AND 20 08-2009 AND ALSO CONSIDERING THE LACK OF SCRUTINY ASSESSMENT PROCEEDINGS FOR THE EARLIER ASSESSMENT YEARS THERE IS NO FACT OF FINDING THAT THE CONSISTENCY RELATED RULES DO NOT APPLY HERE. FURTHER LD DR SUBMITTED THAT THE HOLDING PERIOD OF THE SHARES BEING VERY SHORT (94% OF THE TRANSACTIONS INVOLVED LESS THAN 100 DAYS) IS IN FA VOUR OF THE REVENUE. THE QUANTIFY ASPECTS OF REPURCHASE OF SHARES AS HELD BY THE LD D R IS IN FAVOUR OF THE REVENUE. NO INVESTOR SHALL UNLOAD THE SHARES AGAIN TO PURCHASE THE SAME SHARE BUT FOR THE BUSINESS INTENTIONS THE SALE AND PURCHASE TURNOVER WITH THE TURNOVER OF RS. 28.92 CRS AND RS. 25.37 CRS RESPECTIVELY REFLECTS THE TR ADING NATURE OF THE TRANSACTIONS. SUBMITTING THE DETAILS OF VARIOUS BUSINESS RATIOS THE STOCK: TURNOVER RATIO WITH 1:16 AND CAPITAL: TURNOVER RATIO WITH 1:10 REFLECTS THE BUSINESS NATURE OF THE TRANSACTIONS AND RELIED ON THE DECISION OF THE ITAT RAJKOT BENCH IN THE CASE OF MUKESHBHAI BABULAL SHAH [2013] 32 TAXMANN.COM 6 (RA JKOT). THE OPENING STOCK (RS. 18.29 LACS) AND CLOSING STOCK (RS. 18 LACS ROU NDED OF) ARE ALMOST THE SAME. WHATEVER SHARES WERE PURCHASED IN THE YEAR WERE SOL D WHICH SHOWS THE BUSINESS NATURE AND ABSENCE OF THE LONG TERM INVESTMENT INTE NTIONS. IT IS ALSO MADE OUT WITH SCRIPS TREATED IN F & O AS WELL AS SHORT TERM SCRIP S ARE THE SAME AND THEREFORE THE SO CALLED STCG HAS TO BE TREATED AS BUSINESS INCOME OF THE ASSESSEE. WITH 264 TRANSACTIONS IN THE YEAR ASSESSEE IS ALMOST ENGAGE D IN THE TRANSACTIONS EVERY DAY ON AN AVERAGE BASIS. NORMALLY INVESTOR MAKES INVE STMENT OCCASIONALLY NOT ON DAY- 6 TO-DAY BASIS. FURTHER LD DR RELIED ON THE ORDER O F THE TRIBUNAL IN THE CASE OF ACIT VS. HITESH S BHAGAT VIDE ITA NO.6586/MUM/2010 (AY: 2007-08) AND ITA NO.5711/MUM/2011(2008-09) DATED 15.5.2013 FOR THE P ROPOSITION THAT THE INCOME ARISING IN SALE OF SHARES HAS TO BE TAXED AS BUSINE SS INCOME AND RELIED ON THE CONTENTS OF PARA 5 TO 5.6 OF THE SAID TRIBUNALS OR DER. IN THE SAID PARAS LD DR MADE OUT THAT THE HOLDING PERIOD VARIES FROM 1 TO 244 DA YS INVOLVING REPETITIVE TRANSACTIONS. HE ALSO MENTIONED VIDE PARA 5.3 THE PRINCIPLES OF RES JUDICATA AS WELL AS ESTOPPELS ARE NOT APPLICABLE TO MATTERS OF TAXATION BECAUSE E ACH UNIT IS A SEPARATE UNIT AND HAS TO BE TAXED ON THE PECULIAR F ACTS OF THE CASE IN THE SAID ASSESSMENT YEAR. THE HONBLE SUPREME COURT JUDGMEN T IN THE CASE OF GOPAL PUROHIT WAS RELIED FOR THE SAID PROPOSITION. FURTHER LD D R ALSO RELIED ON THE DECISION OF THE ITAT RAJKOT BENCH IN THE CASE OF DCIT VS. MUKESHBH AI BABULAL SHAH [2013] 32 TAXMANN.COM 6 (RAJKOT) FOR THE PROPOSITION THAT WHETHER DOMINANT INTENTION OF THE ASSESSEE BEHIND PURCHASE AND SALE OF SHARES WAS TO QUICKLY REALIZE PROFITS BY FREQUENTLY TURNING OVER THE STOCK OF SHARES AND NOT TO EARN DIVIDEND FROM THE INCOME WOULD ASSESSED AS BUSINESS INCOME. THE SAID DECISION ALSO RELIED FOR THE PROPOSITION THAT THE STOCK TURNOVER RATIO AND CAPIT AL TURNOVER RATIO ARE MORE THAN 1:14. THIS IS THE CHARACTER OF A BUSINESS ACTIVITY AND NOT INVESTMENT ACTIVITY. THUS THE LD DR CONCLUDED BY SAYING THAT THE CIT (A) SHOU LD HAVE CONFIRMED THE DECISION OF THE AO IN TREATING THE CAPITAL GAINS AS A BUSINE SS INCOME OF THE ASSESSEE. 8. ON THE OTHER HAND LD COUNSEL FOR THE ASSESSEE N ARRATED THE FACTS OF THE CASE AND MENTIONED THAT THE STCG EARNED BY THE ASSESSEE AMOUNTS TO RS. 2 17 24 104/- WHICH WAS CONSIDERED BY THE AO AS BUSINESS INCOME O F THE ASSESSEE AND APPLIED THE PROVISIONS OF SECTION 14A READ WITH RULE-8D AND MAD E DISALLOWANCE OF RS. 1 32 933/- AS EXPENDITURE RELATABLE TO THE EXEMPT I NCOME. LD COUNSEL ARGUED VEHEMENTLY STATING THAT THE DECISION OF THE CIT (A) IS INCORRECT AND NOT CONSISTENT THAT THE DEPARTMENTAL STAND TAKEN IN THE ASSESSEES OWN CASE FOR THE EARLIER YEARS. LD COUNSEL MENTIONED THAT THE ASSESSEE DECLARED THE SAID SHARES ARE INVESTMENTS IN THE BOOKS OF ACCOUNTS. HE RELIED ON THE DETAILED A RGUMENTS SUBMITTED BEFORE THE CIT (A) WHICH ARE REPRODUCED IN PARA 4 AND 5 OF THE IMPUGNED ORDER. 7 9. BRINGING OUR ATTENTION TO THE TABLE IN PARA 4 OF THE IMPUGNED ORDER LD COUNSEL MENTIONED THAT THE STCG- RELATED TRANSACTIO NS INVOLVE 31 SCRIPS. THE SCRIPS ARE COMMON/SIMILAR TO THOSE DEALT IN THE BUSINESS O F F&O CATEGORY. FURTHER LD COUNSEL MENTIONED THAT THERE ARE COMMON SCRIPS QUA LTCG ALSO. HOWEVER HE ARGUED THAT THE SAME SHOULD BE A MATTER DEVIATING F ROM THE CLAIM OF THE ASSESSEE CONSIDERING THE ENTRIES IN THE BOOKS OF THE ASSESSE E AND THE ORIGINAL INTENTION OF THE ASSESSEE. LD COUNSEL REASONED THAT ASSESSEE IS A H OUSEWIFE AND SHE DOES NOT NEED TO EARN BUSINESS INCOME AND THEREFORE SHE IS ALWAY S FOR CAPITAL APPRECIATION. IT IS REITERATED THAT ASSESSEE BOUGHT AND SOLD THE SHARES FOR 128 DAYS IN THE FINANCIAL YEAR. IT IS ADMITTED THAT ASSESSEE EARNED 1.73 CRS AS GAINS INVOLVING SINGLE SCRIP ON 4 DISTINCT DAYS. BALANCE OF RS. 40 LACS WAS EARNED ON OTHER SCRIPS SOLD ON 4 DISTINCT DAYS. THE SAID STCG WAS THEREFORE EARNED IN 8 DAYS . HE ALSO MENTIONED THAT INVESTMENT WAS MADE OUT OF HER OWN FUNDS WITHOUT IN VOLVEMENT OF ANY BORROWED FUNDS. IT WAS ALSO REASONED THAT THE HOLDING PERIO D OF ALL THE SCRIPS VARIES FROM 1 TO 188 DAYS. WHILE MENTIONING THAT ALL HER FAMILY MEMB ERS ARE CHARTERED ACCOUNTANTS HUSBAND AND SON AND THERE IS NO NEED TO EARN SHARE S ON SHARES AS LIVELIHOOD. SHE ALSO RELIED ON THE BOOK ENTRIES SHOWING THE SCRIPS AS INVESTMENTS IN THE SHARE REGISTER. AS PER THE ASSESSEES COUNSEL THE SHARE S TRANSACTIONS INVOLVED ONLY IN LISTED COMPANIES INVOLVING INDEPENDENT COMPANIES. RELYING ON THE CBDT CIRCULAR NO.4/2007 DATED 15.6.2007 LD COUNSEL REASONED THA T THE SAID CIRCULAR ALLOWS THE INDIVIDUAL TO DO BUSINESS AS WELL AS INVESTMENT. R EGARDING RULE OF CONSISTENCY LD COUNSEL MENTIONED THAT THE DEPARTMENT HAS CONSISTEN TLY ACCEPTED THE CLAIM OF THE ASSESSEE AND THE CLAIM IS DISTURBED THIS YEAR. HE ALSO MENTIONED THAT THE VOLUME AND NUMBER OF TRANSACTIONS ARE MORE OR LESS THE SAM E AND RELIED ON THE TABLE CONTAINING DETAILS OF SHARE HOLDINGS FOR THE 8 ASSE SSMENT YEARS IE AY 2004-05 TO 2011-2012. LD COUNSEL ALSO BROUGHT OUR ATTENTION T HAT MAJOR STCG WAS EARNED OUT OF 61 TRANSACTIONS WITH A PERIOD OF HOLDING OF 3 MO NTHS OR LESS. HE ALSO ADMITTED THAT THE ASSESSEE IS ENGAGED IN THE REPETITIVE TRAN SACTIONS INVOLVING REENTRY INTO THE SAME SCRIPS AND CONSIDERING THE BUSINESS NATURE OF THE SAID TRANSACTIONS ASSESSEE DID NOT FILE FURTHER APPEAL ON THE DECISION OF THE CIT (A). OTHERWISE CIT (A) SEGREGATED THE STCG RELATABLE TO SUCH REENTERED TRA NSACTIONS AND CONFIRMED THE DISALLOWANCE TO THE TUNE OF RS. 21 50 410/- OUT OF STCG OF RS. 2 17 24 104/-. HE 8 REITERATED THE CIT (A)S REASONING AND SUBMITTED TH AT THE ORDER OF THE CIT (A) SHOULD BE CONFIRMED WITHOUT ANY INTERFERENCE. IN RESPECT O F THE ASSESSEES CLAIM RELATING TO THE PRINCIPLES OF CONSISTENCY LD COUNSEL RELIED ON THE DECISION OF APEX COURT IN THE CASE OF GOPAL PUROHIT. FURTHER LD COUNSEL RELIED ON THE ORDER OF THE ITAT MUMBAI IN THE CASE OF SMK SHARES & STOCK BROKING VIDE ITA NO.799/M/2009 DATED 26.11.2010 IN HIS FAVOUR. HE ALSO RELIED ON ANOTHER DECISION OF THE ITAT MUMBAI IN THE CASE OF ACIT VS. SMT. DATTA MAHENDRA SHAH VIDE ITA 6094/M/2011 AND CO NO.155/M/2012 DATED 27.2.2013 REGARDING MOTIVE AND INTENTIONS. HOWEVER THE LD COUNSEL FOR THE ASSESSEE COULD NOT ESTABLISH A SING LE DECISION OUT OF THE ONES RELIED UPON BY HIM WHERE THE FACTS ARE EXACTLY COMPARABLE WITH THOSE OF THE PRESENT CASE. TRIBUNAL DECISION: 10. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AND THE FACTS PLACED BEFORE US. THE UNDISPUTED FACTS ARE THAT THE IS NO CLARITY ON PREPARATION AND FURNISHING OF THE COMPLETE BALANCE SHEETS OF VARIOUS AYS TO DEMONSTRATE THE BOOK ENTRIES OF THE SHARES AS INVES TMENTS INCLUDING THAT OF THE AY 2007-2008. COLUMNS IN THE BALANCE SHEET WERE KEPT BLANK. IT IS ALSO A FACT THAT THE ASSESSEE DEALT WITH 31 COMMON SCRIPS SIX (6) OF WH ICH ARE COMMONLY TRADED AS STOCKS AS PART OF F & O BUSINESS AND ALSO EARNED ST CG OUT OF UNLOADING OF SUCH SHARES. IN FACT THERE ARE COMMON SCRIPS QUA THE LTC G TOO. ASSESSEE HAS THE HISTORY OF RE-ENTERING INTO THE SAME SCRIPS TOO AND THE RELEVANT GAINS CONSTITUTES RS 21 50 410/-. OTHER UNDISPUTED FACTS INCLUDE (I) AS SESSEE HAS NOT FILED ANY APPEAL AGAINST THE TAXING OF RS 21 50 410/- AS BUSINESS IN COME; (II) THE TOTAL PURCHASES ARE OF THE VALUE OF RS. 25.37 CR AND TOTAL SALES OF RS. 28.92 CR (III) CLOSING STOCK OF RS. 17.96 LACS IS VERY CLOSE TO OPENING STOCK OF RS. 18 .29 LACS. (IV) IT IS ALSO A FACT THAT AY 2008-2009 (CURRENT AY) REPORTEDLY IS DISTINGUISH ABLE ON FACTS QUA THE NUMBER OF SCRIPS PURCHASED THE NUMBER OF TRANSACTIONS (162 + 184= 346) AGAINST OTHER YEARS SINGLE OR DOUBLE DIGITS. (V) STOCK TURNOVER RATIO IS 1:16 AD CAPITAL TURNOVER RATIO IS 1:10 (THESE ARE THE FEATURES OF BUSINESS ACTIVITY). THE CASE OF THE REVENUE: WITH THE ABOVE UNDISPUTED FACTS THE CASE OF THE REVENUE IS THAT THE ALLEGED TRANSACTIONS OF LTCG IS AKIN WITH THE ACTIVITIES OF THE F&O QUA THE INTENTION OF THE ASSESSEE AND SCRIPS TRADED BY THE ASSESSEE DURING THE 9 YEAR. THE TRANSACTIONS FOR THE CURRENT YEAR ARE FA CTUALLY DISTINGUISHABLE WITH THAT OF THE EARLIER AND LATER YEARS THEREFORE THE PRINCI PLE OF CONSISTENCY QUA THE RATIO OF THE HONBLE SUPREME COURT JUDGMENT IN THE CASE OF C OMMISSIONER OF INCOME-TAX VS GOPAL PUROHIT (BOM) HAS NO APPLICATION TO THE ASSES SMENT YEAR UNDER CONSIDERATION. PROPER BALANCE SHEETS WERE NOT PREPARED AND FURNISH ED BY THE ASSESSEE FOR MANY YEARS TO READ THE INTENTION OF THE ASSESSEE AND THE ENTRIES IN THE BOOKS OF ACCOUNTS. IT IS AN ACCEPTED POSITION THAT SOME OF THE SO CALLE D STCG WERE AGREED TO BE THE BUSINESS TRANSACTION AS CONFIRMED BY THE CIT (A). THE STOCK TURNOVER RATIO AND THE CAPITAL TURNOVER RATIOS INDICATES BUSINESS INCOMES AND DECISION OF THE ITAT RAJKOT IN THE CASE OF DCIT VS. MUKESHBHAI BABULAL SHAH [2013] 32 TAXMANN.COM 6 (RAJKOT) CONFIRMS THE DEPARTMENTAL VIEWS. THEREFORE NOTWIT HSTANDING THE CLAIMS OF THE ASSESSEE IN THE RETURNS THE AY UNDER CONSIDERATION AND THE OTHER AYS THE CONCLUSIONS OF THE AO ARE REQUIRED TO BE UPHELD. 11. PER CONTRA THE CASE OF THE ASSESSEE IS THAT IN VIEW OF THE PRINCIPLE OF CONSISTENCY WHICH THE REVENUE HAS BEEN ACCEPTING TH E CLAIMS IN THE RETURNS OF THE ASSESSEE THE IMPUGNED INCOME SHOULD BE TAXED AS ST CG NOT AS A BUSINESS INCOME. ON THE TRANSACTIONS INVOLVING REENTRY ASSESSEE HAS NOTHING TO STATE EXCEPT RELYING ON THE DETAILED REPLIES GIVEN BY THE ASSESSEE DURIN G THE FIRST APPELLATE PROCEEDINGS WHICH ARE ENUMERATED IN THE TABLE GIVEN IN PARA 4 O F THE IMPUGNED ORDER. BRIEFLY COMMONALITY OF THE SCRIPS DEALT AS F&O AND THE LTCG IS NOT A DETERMINING FACTOR. WHEN THE ASSESSEE IS INVESTED HER OWN FUNDS IN LIST ED SCRIPS INVOLVING INDIVIDUAL COMPANIES THEY HAVE TREATED AS STCG ONLY. AS PER THE ASSESSEE ALL THE GAINS WERE ACTUALLY EARNED IN 8 YEARS ALTHOUGH IT INVOLVED ONL Y 31 SCRIPS. FURTHER IT WAS ASSERTED THAT THE SAID TRANSACTIONS WERE ENTERED IN THE BOOKS AS INVESTMENTS AND ASSESSEE IS AUTHORIZED BY THE CBDT CIRCULAR NO.4/20 07 TO DO BOTH THE ACTIVITIES NAMELY INVESTMENT AS WELL AS STOCK-IN-TRADE. OTHER WISE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES FOR T HE PROPOSITION THAT THE SCHEME OF STCGS SHOULD BE ACCEPTED. 12. WE HAVE CONSIDERED THE ABOVE DIVERGENT STANDS O F THE LD REPRESENTATIVES OF THE PARTIES IN DISPUTE. CORE ISSUE FOR ADJUDICATION IN THIS APPEAL OF THE REVENUE RELATES IF THE BALANCE OF SHORT TERM CAPITAL GAINS (RS. 2 17 24 104/- MINUS RS 10 21 50 410/-) ARE ASSESSABLE TO TAX UNDER THE HEAD PROFITS AND GAINS FROM BUSINESS OR PROFESSION . THE STCG OF RS 21 50 410/- WHICH ARE ATTRIBUTAB LE TO THE RE-ENTERED SCRIPS ARE HELD ASSESSABLE AS BUSINESS PROFITS BY THE CIT(A) AND THE ASSESSEE ACCEPTED THE SAID DECISION. ASSESSEE HAS NOT FILED APPEAL AGAINST SUCH DECISION AND THEREFORE SO FAR AS THE HEAD OF INCOME FOR SUM OF RS 21 50 410/- IS CONCERNED THE FINALITY IS ATTAINED. HENCE THE NATURE OF THE BALAN CE GAINS OF RS. 2 17 24 104/- IS THE DISPUTE BEFORE US. 13. REGARDING THE LEGAL SCOPE OF THE ISSUE UNDER CONSIDERATION IT IS A SETTLED POSITION THAT THE ISSUE RELATING TO A PARTICULAR TR ANSACTION CONSTITUTES CAPITAL GAIN TRANSACTION OR BUSINESS TRANSACTION IS A MIXED QUESTION OF LAW AND FACT . THE ANSWER TO THE DISPUTE DEPENDS ON THE FACTS OF EACH CASE. FURTHER IT IS ALSO A SETTLED LAW THAT THE PRINCIPLE OF ESTOPPELS OR RES JUDICATA DOES NOT APPLY TO THE TAX PROCEEDINGS AS HELD BY THE ITAT MUMBAI IN THE CASE OF HITESH S. BHAGAT VIDE ITA NO.6588/MUM/2010 AND THE JUDGMENT OF THE HONBLE SU PREME COURT IN THE CASE OF NEW JAHANGIR VALKIL MILLS LTD 49 ITR 137 (SC). FURTHER ALSO THE RULE OF CONSISTENCY SHOULD BE FOLLOWED SO LONG AS THE FACTS ARE NOT DIFFERENT AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF COMMISSIONER OF INCOME -TAX VS GOPAL PUROHIT (BOM) 336 ITR 287. REGARDING THE INTENTION OF THE ASSESSEE THE DECISION OF ITAT RAJKOT IN THE CASE OF DCIT VS. MUKESHBHAI BABULAL S HAH AND IT IS RELEVANT FOR THE PROPOSITION WHERE INTENTION OF THE ASSESSEE BEHIND PURCHASE AND SALES OF THE SHARES WAS QUICKLY TO REALIZE PROFITS AND NOT TO EARN DIVIDEND FROM THEM THE INCOME WOULD BE ASSESSABLE AS BUSINESS INCOME. THIS PROPOSITION WAS DRAWN ON THE FACTS OF THE STOCK TURNOVER RATIO OF 1:16 AND C APITAL TURNOVER RATIO OF 1:14. ORDER OF THE TRIBUNAL IN THE CASE OF HITESH S. BHAGAT (SU PRA) RELIED UPON BY THE LD DR IS RELEVANT FOR THE PROPOSITION THAT THE STCG CLAIMED BY THE ASSESSEE WERE TREATED AS BUSINESS INCOME ON THE FACTS THAT WHICH INVOLVE 86 TRANSACTIONS ON SALE WITH THE HOLDING PERIOD OF 1 TO 44 DAYS. IN THE SAID DECISION THE TRIBUNAL HELD ACCEPTANCE OF THE CLAIM FOR THE EARLIER YEAR WOULD NOT OPERATE RE S JUDICATA OR ESTOPPELS ON THE ASSESSING OFFICER FOR DECIDING THE ISSUE FOR THE YE AR UNDER CONSIDERATION WHEN THE FACTS ARE NOT STRICTLY IDENTICAL. 11 14. FACTS OF THE ASSESSEES CASE : CIT(A) INCORPORATED A TABLE CONTAINING RELEVANT DATA FOR MANY AYS 2004-05 TO 2011-12 FOR P URPOSE OF COMPARISON AND DISTINGUISHING THE FIGURES FOR THE PRESENT AY 2008 -2009 FROM THAT OF THE OTHER AYS. DATA RELATE TO THE NUMBER OF SCRIPS SHARES PURCHAS ED AND SOLD OPENING AND CLOSING STOCKS VOLUMES/TURNOVERS NO OF TRANSACTIONS OF SA LE AND PURCHASES TURNOVERS OF PURCHASE AND SALES AND RATIOS ETC. THE SAID TABLE IS AS UNDER: 15. FROM THE ABOVE IT IS EVIDENT THAT THE FIGURES FOR THE AY 2008-2009 ARE NOT COMPARATIVE QUA THE EARLIER AND SUBSEQUENT ASSESSMENT YEARS. THE CH ART IS PREPARED FOR COMPARING 13 PARAMETERS AND MOST OF TH EM IE VOLUMES/TURNOVERS NUMBER OF SCRIPS/TRANSACTION NO OPENING/CLOSING ST OCK POSITION RATIOS ETC SHOW DISTINCTLY INCREASING TENDENCY FOR THE AY 2008-09 AIMED AT MAKING QUICK PROFITS. THE DATA FOR THE YEAR UNDER CONSIDERATION IS CLEARL Y DISTINGUISHABLE FROM THAT OF THE OTHER YEARS. THEREFORE THE JUDGMENT IN THE CASE OF GOPAL PUROHIT (SUPRA) WILL NOT HELP THE ASSESSEE IN MATTERS OF PRINCIPLE OF CONSI STENCY. THEREFORE THE RELATED ARGUMENTS OF LD COUNSEL FOR THE ASSESSEE ARE DISMIS SED. AS SUCH IT IS A SETTLE LEGAL 12 POSITION THAT THE PRINCIPLES OF RES JUDICATA AND THE ESTOPPELS DO NOT APPLY TO THE PROCEEDINGS UNDER THE ACT. 16. REGARDING THE INTENTION OF THE ASSESSEE NORMALLY ENTRIES ORIGINALLY MADE IN THE BOOKS OF ACCOUNTS SOON AFTER A PURCHASE TRAN SACTION IS COMPLETE BECOMES RELEVANT FACTOR OR INDICATING FACTOR FOR DECIDING T HE SAID INTENTION. IT IS THE CASE OF THE ASSESSEE THAT THE RELATABLE INVESTMENTS ARE MAD E FOR SHORT TERM GAINS PURPOSE. NOW THE QUESTION IS HOW TO DEMONSTRATE THE SAME IF NOT WITH THE HELP OF THE BOOKS OF ACCOUNTS AND ENTRIES THEREIN AND OF COURSE STAN D BY THE SAME WITHOUT YIELDING TO THE TEMPTATION OF MAKING QUICK PROFITS AND IDEALLY TO EARN THE DIVIDEND INCOME ON ONE SIDE AND THE CAPITAL APPRECIATION ON THE OTHER. IN THIS CASE THE ASSESSEE FAILED TO DEMONSTRATE THE SAME WITH THE HELP OF THE BOOKS. THE CONDUCT OF THE ASSESSEE DEMONSTRATES DIFFERENT. AS DISCUSSED ABOVE THERE I S PROBLEMS IN FILING BALANCE SHEET COPIES FOR RELEVANT AYS THERE ARE PROBLEMS IN NOT STICKING TO THE INVESTMENTS THE ASSESSEE BUYS A SCIP ON A PARTICULAR DAY AND SELL I T WHEN THERE IS RAISE IN INDEX IN OPEN MARKET FOR PROFITS ASSESSEE BUYS THE SAME SCR IP LATER ONLY FOR UNLOADING LATER FOR PROFITS AGAIN. THIS CONDUCT OF THE ASSESSEE DOE S NOT CONGRUOUS WITH HIS CLAIMS IN THE RETURN. IT IS THE CLAM OF THE ASSESSEE THAT AS A N INDIVIDUAL SHE IS NOT UNDER OBLIGATION TO PREPARE AND FILE BALANCE SHEETS. THIS VIEW POINT MAY CORRECT HAD THE ASSESSEE NOT BEEN INVOLVED IN THE TRANSACTIONS OF T HIS MAGNITUDE CLAIMING ENGAGED IN THE BUSINESS AT LEAST UNDISPUTEDLY FOR THE EXTEN T OF F&O. THEREFORE THIS PART OF THE EXPLANATION OF THE ASSESSEE IS REJECTED ON FACT OF THE PRESENT CASE. THUS THE ASSESSEE HAS FAILED TO DEMONSTRATE THE BOOK ENTRIES INVOLVING EACH OF THE TRANSACTION. FURTHER ON THE INTENTION RELATED ARGUMENTS IT IS AN ADMITTED POSITION THAT ASSESSEE ACCEPTED THE DECISION OF THE CIT (A) WITH REGARD TO THE BUSINESS NATURE OF THE GAINS OF RS. 21 50 410/- REL ATABLE TO THE REENTERED TRANSACTIONS IN THE SAME SCRIP. WITH NO APPEAL OF T HE ASSESSEE AGAINST THE ORDER OF THE CIT(A) IT IS AGREED POSITION NOW THAT THE SO C ALLED BOOK ENTRIES ON THE SHARE TRANSACTIONS AS INVESTMENT (WITH REFERENCE TO THE S AID REENTERED TRANSACTION) HAVE TO BE NOW DEEMED THEM AS BUSINESS TRANSACTIONS. THES E DEVELOPMENTS INDEED RAISED MANY ISSUES RELATING TO THE (I) QUALITY OF SO CALLE D BOOK ENTRIES FOR OTHER SCIPS (II) THE CREDIBILITY OF THE ASSESSEES CLAIMS RELATING T O THE ORIGINAL INTENTION (II) WHY NO THE OTHER TRANSACTIONS ARE ALSO TO TREATED AS BUSIN ESS TRANSACTIONS AS WELL ETC. WITH 13 THE SAID DEVELOPMENTS THE ONUS NOW SHIFTS TO THE A SSESSEE TO DEMONSTRATE THAT THE OTHER TRANSACTIONS DO NOT CONSTITUTES BUSINESS TRA NSACTION AND ASSESSEE FAILED TO DO SO NOT EVEN BEFORE US. THUS THE ASSESSEE HAS FORFE ITED THE ORIGINAL CLAIM OF INVESTMENT NATURE OF THE TRANSACTIONS FOR THE GAIN OF RS. 21 50 410/- CLEARLY AND THEREFORE FOR OTHERS TOO. THUS SUCH CONDUCT OF TH E ASSESSEE IN MATTERS OF THE CLAIMS MADE IN THE RETURN W R TO STCG IS UNACCEPTAB LE. THEREFORE THE VIEWS OF THE AO ARE SUSTAINABLE AND HENCE THE CONCLUSION OF THE CIT(A) ON THE BALANCE OF THE STCG IS REVERSIBLE. 17. FURTHER THE INTENTIONS OF ASSESSEE FOR REALIZI NG OF THE QUICK PROFITS A BUSINESS TRAIT WE FIND THAT IT IS AN ADMITTED FACT THAT THE ASSESSEE ENTERED INTO COMMON SCRIPS FOR CONDUCTING THE BUSINESS OF F & O ON SIDE AND THE INVESTMENT IN STCG ON THE OTHER. IN FACT THERE ARE COMMON SHARES FOR THE INVESTMENT FOR STCG AND LTCG TOO. THEREFORE THE ALLEGATION OF QUICK PROFITS AN D THE ISSUE OF THE BUSINESS AKINNESS CAME UP IN THE ASSESSMENT PROCEEDINGS. ASSESSEE PICKED UP THE SIX COMMON SCRIPS FOR BUSINESS OF F&O AS WELL AS THE ST CG. THIS IS THE AREA OF DISPUTE BETWEEN THE PARTIES AND THERE IS NO ISSUE ON CHANGE OF CLASSIFICATION OF STCG AS LTCG OR VICE VERSA BEFORE US. THERE IS NO CLARITY ON WHAT BASIS CERTAIN TRANSACTIONS INVOLVING THE SAME SCRIP ARE TREATED AS BUSINESS AN D OTHERS AS STCG AND THE ASSESSEE HAS NO EXPLANATION IN THIS REGARD EXCEPT R ELYING ON THE BOOK ENTRIES WHICH WE REJECTED ALREADY FOR DETAILED REASONS GIVEN ABOV E. IN THE PROCESS THE ASSESSEE GOT AN UNFAIR ADVANTAGE OF LOWER TAX RATES APPLICAB LE TO THE STCG. SUCH ADVANTAGE IS ALLOWABLE UNLESS THE ONUS CAST ON THE ASSESSEE I S DEMONSTRATED. ASSESSEE COULD NOT DEMONSTRATE THE REASONS FOR SUCH TREATMENT WHI CH TURNED OUT TO BE PREJUDICIAL TO THE INTEREST OF THE REVENUE. CONSIDERING THE FAI LURE OF THE ASSESSEE WE ARE OF THE OPINION THE DECISION OF THE AO BECOMES SUSTAINABLE. 18. NOW WE SHALL TAKE UP THE ISSUES RELATING TO REV ENUES ALLEGATION OF QUICK REALIZATION OF THE PROFITS WHICH IS A BUSINESS TRAIT. WE FIND THAT THE ASSES SEE PURCHASED SHARES WORTH RS. 25.37 CR DURING THE YEAR AND UNLOADED THE SHARES TO THE VALUE OF MORE THAN RS. 28.92 CR. THESE VOLUMES INDI CATE THAT WHAT IS PURCHASED IN THE YEAR IS COMPLETELY SOLD. THUS INESCAPABLE INFE RENCE IS THAT THE ASSESSEE INTENDS TO REALIZE THE INVESTMENT AND ALSO TO QUICKLY REALI ZE THE RELATABLE PROFITS IN THE YEAR 14 ITSELF. OUT OF RS 28.92 CR OF SALE PROCEEDS THE AS SESSEE AGAIN PURCHASED SHARES WORTH RS 2.19 CRORES AND RS 36 800/- IN THE SUCCEED ING AYS. ASSESSEE COMPLETELY EXITED BY THE END OF AY 2011-12. THESE FACTS GO AGA INST THE ASSESSEES CLAIM AND CONFIRM THE AOS ALLEGATION THAT THE ASSESSEE BELIE VES IN QUICK PROFITS AND NOT IN THE SHORT TERM INVESTMENT ACTIVITY. OTHER RELEVANT DATA COMPILED IN THE TABLE GIVEN ABOVE SHOWS THE BUSINESS TRAITS OF THE TRANSACTIONS . ASSESSEE MAINTAINS UNIFORMLY THE CLOSING STOCK WORTH RS 17- RS 18 LAKHS IN ALL R ECENT AYS. THE SAME IS CASE WITH OPENING STOCKS OF SHARES TOO. IN FACT THE OPENING AND CLOSING VALUES ARE MORE OR LESS EQUAL. THE NUMBER OF SCRIPS TRANSACTIONS OF P URCHASE AND SALES ALSO SUGGESTS THE INCREASING TRENDS FOR MAKING QUICK BUSINESS PRO FITS. THUS THE DECISION OF THE TRIBUNAL IN THE CASE OF MUKESHBHAI BABULAL SHAH (SU PRA) WHICH IS RELEVANT FOR THE PROPOSITION THAT WHERE INTENTION OF THE ASSESSEE BEHIND PURCHASE AND SALES OF THE SHARES WAS QUICKLY TO REALIZE PROFITS AND NOT TO EARN DIVIDEND FROM THEM THE INCOME WOULD BE ASSESSABLE AS BUSINESS INCOME HELPS THE REVENUE. FURTHER WE HAVE ANALYSED THE OTHER UNDISPUTED FACTS NARRATED IN 9 ABOVE ABOUT THE FACT OF ASSESSEE ACCEPTING THE VERDICT OF THE CIT(A) OF TAX ING OF RS 21 50 410/- AS BUSINESS INCOME PURCHASE AND SALE TO OF RS. 25.37 CR AND RS. 28.92 CR RESPECTIVELY CLOSING STOCK OF RS. 17.96 LACS IS VERY CLOSE TO OP ENING STOCK OF RS. 18.29 LACS THE NUMBER OF TRANSACTIONS (162 + 184= 346) AGAINST OTH ER YEARS SINGLE OR DOUBLE DIGITS AND FIND THE SAID DATE HELPS THE REVENUE. FURTHER WE ALSO REITERATE THAT THE WITH THE STOCK TURNOVER RATIO IS 1:16 IT IS COMMONSENSE TO INFER THAT THE ASSESSEE INTENTION IS TO QUICKLY TO REALIZE THE PROFITS AND NOT TO WAIT FOR THE DIVIDEND OR CAPITAL APPRECIATION. IN ANY CASE THE ISSUE OF ESTABLISHIN G THE REAL CAPITAL APPRECIATION OF THE SHARES IS DIFFICULT FOR THE ASSESSEE IN THE CAP ITAL MARKET OF RAPID FLUCTUATIONS OF RELEVANT INDICES. 19. TO SUM THE FACTS ABOUT THE ENTRIES IN THE BOOK S OF ACCOUNTS ARE INCONCLUSIVE. BY NOT CONTESTING THE CONCLUSION OF THE CIT(A) WITH REGARD TO SO CALLED STCG RS 21 50 410/- THE ASSESSEE FORFEITED THE CLAIMS RELA TING TO THE CREDIBILITY OF THE BOOKS ENTRIES AT LEAST WITH REFERENCE TO THE TRANSACTIONS INVOLVING THE RE-ENTERED SCIPS. WITH THIS WITH REGARD TO CLAIMS OF INVESTMENT IN O THER SCRIPS THE ONUS SHIFTS TO ASSESSEE AND ASSESSEE FAILED TO DISCHARGE THE SAME. THE INTENTION OF ACQUIRING THE SHARES AS INVESTMENT FOR CAPITAL APPRECIATION IS NO T TRANSLATED AND INSTEAD THE 15 SYMPTOMS OF GOING FOR QUICK PROFITS ARE EVIDENT. TH E STOCK: TURNOVER RATIO AT 1:16 DOES AGAINST THE CLAIMS OF THE ASSESSEE. OTHER DATA RELATING TO OPENING STOCKS AND CLOSING STOCKS ON ONE SIDE AND THE ASSESSEES FINAL EXITING FROM THE SO CALLED CLAIM OF STCG AT THE END OF 2011-12 INDICATES THE ASSESSEES CONDUCT FOR QUICK PROFITS AND NOT FOR INVESTMENT. OF COURSE THE HOLDING PERIOD P ARTICULARS ALSO CONFIRM THE AOS CONCLUSIONS. REGARDING THE DECISIONS RELIED UPON BY THE LD COUNSEL FOR THE ASSESSEE WE FIND THOSE CASES ARE FACTUALLY DISTINGUISHABLE A ND NONE OF THEM HAS THE RECORD OF RE-ENTERED TRANSACTIONS HIGH STOCK: TO RATIO AND A LSO THE HISTORY OF CAUSING DENT TO THE ORIGINAL CLAIM OF THE ASSESSEE WITH REGARD TO T HE BOOK ENTRIES AND THE INTENTION OF THE ASSESSEE. THEREFORE FROM THE FACTS AND THE LEGAL PROPOSITIONS NARRATED ABOVE WE ARE OF THE OPINION THAT THE CONCLUSIONS OF THE C IT (A) ON THE BALANCE OF THE STCG ARE REVERSED AND ORDER OF THE AO IS RESTORED. ACCOR DINGLY GROUND RAISED BY THE REVENUE IS ALLOWED . 20. IN THE RESULT APPEAL OF THE REVENUE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 10.07.2013. SD/- SD/- (I. P. BANSAL) (D. KARUNAKARA RAO ) / JUDICIAL MEMBER $ / ACCOUNTANT MEMBER MUMBAI; 3& DATED 10.07.2013. . & . ./ OKK SR. PS 2 2 2 2 - -- - +/45 +/45 +/45 +/45 65(/ 65(/ 65(/ 65(/ / COPY OF THE ORDER FORWARDED TO : 1. )* / THE APPELLANT 2. + )* / THE RESPONDENT. 3. 7 ( ) / THE CIT(A)- 4. 7 / CIT 5. 5 89 +/& / DR ITAT MUMBAI 6. 9!' : / GUARD FILE. 16 5/ +/ //TRUE COPY// 2& 2& 2& 2& / BY ORDER ; ;; ; / < < < < = = = = (DY./ASSTT. REGISTRAR) / ITAT MUMBAI