ITO,Wd.-2(1),, Nashik v. Shri Gaurav Arvind Thakkar,, Nashik

ITA 247/PUN/2010 | 2006-2007
Pronouncement Date: 10-11-2017 | Result: Dismissed

Appeal Details

RSA Number 24724514 RSA 2010
Assessee PAN ADCPT7870L
Bench Pune
Appeal Number ITA 247/PUN/2010
Duration Of Justice 7 year(s) 8 month(s) 28 day(s)
Appellant ITO,Wd.-2(1),, Nashik
Respondent Shri Gaurav Arvind Thakkar,, Nashik
Appeal Type Income Tax Appeal
Pronouncement Date 10-11-2017
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 10-11-2017
Date Of Final Hearing 08-11-2017
Next Hearing Date 08-11-2017
Last Hearing Date 18-09-2017
First Hearing Date 18-09-2017
Assessment Year 2006-2007
Appeal Filed On 12-02-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE . BEFORE SHRI D.KARUNAKARA RAO AM AND SHRI VIKAS AWASTHY JM . / ITA NO.247/PUN/2010 / ASSESSMENT YEAR : 2006-07 ITO WARD-2(1) NASHIK . /APPELLANT VS. SHRI GAURAV ARVIND THAKKAR AKT HOUSE WALZADE COLONY NASHIK PAN : ADCPT7870L . / RESPONDENT . / ITA NO.1539/PUN/2011 / ASSESSMENT YEAR : 2007-08 ACIT CIRCLE-2 NASHIK . /APPELLANT VS. SHRI GAURAV ARVIND THAKKAR AKT HOUSE WALZADE COLONY NASHIK PAN : ADCPT7870L . / RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK REVENUE BY : SHRI MUKESH JHA CIT-DR / DATE OF HEARING : 08.11.2017 / DATE OF PRONOUNCEMENT: 10.11.2017 / ORDER PER D. KARUNAKARA RAO AM : THERE ARE 2 APPEALS UNDER CONSIDERATION INVOLVING ASSESSMENT YE ARS 2006-07 AND 2007-08. BOTH OF THEM ARE FILED BY THE REVE NUE AGAINST SEPARATE ORDERS OF CIT(A)-II NASHIK DATED 13-11-2009 & 27-09-2011 RESPECTIVELY. TO START WITH WE SHALL TAKE UP THE APPEAL FOR A.Y. 2006 -07. ITA NO.247/PUN/2010 & ITA NO.1539/PUN/2011 SHRI GAURAV A. THAKKAR 2 ITA NO.247/PUN/2010 (A.Y. 2006-07) 2. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND ENGAGED IN INVESTMENT IN SHARES. ASSESSEE FILE D THE RETURN OF INCOME FOR THE A.Y. 2006-07 DECLARING TOTAL INCOME OF RS.3 0 1 570/-. SCRUTINY ASSESSMENT WAS COMPLETED U/S.143(3) OF THE ACT D ETERMINING THE TOTAL INCOME OF RS.51 32 233/-. AO TAXED BOTH THE SHORT TERM CAPITAL GAINS OF RS.4 79 822/- AND LONG TERM CAPITAL GAINS OF RS.41 5 8 402/- AS BUSINESS INCOME OF THE ASSESSEE. THESE ARE THE MAJOR A DDITIONS IN THE ASSESSMENT. CIT(A) DELETED THE SAID ADDITIONS DISCUSSING TH E ISSUES ON MERITS. AGGRIEVED WITH THE ORDER OF CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 3. WHILE THE LD. DR FOR THE REVENUE RELIED HEAVILY ON THE ORDER OF THE AO THE LD. COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENT ION TO THE SAID ADDITIONS AND ALSO REFERRED TO THE CBDT CIRCULAR NO.06/201 6 DATED 29-02-2016. LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTE NTION THE SAID LONG TERM CAPITAL GAINS TREATED AS THE BUSINESS INCOME OF THE ASSESSEE AMOUNTING TO RS.41 58 401/- AND READ OUT THE CONTENTS O F PARA 3(B) OF THE SAID CIRCULAR LD. COUNSEL MENTIONED THAT THE AOS ARE BA RRED FROM DISPUTING THE CLAIM OF THE ASSESSEE WHEN IT COMES TO THE LONG TERM CAPITAL GAINS INVOLVING THE TRANSFER OF THE LISTED SHARES AND SECUR ITIES HELD BY ASSESSEES FOR THE PERIOD MORE THAN 12 MONTHS PRECEDING TO THE DATE OF ITS TRANSFER. DEMONSTRATING THAT THE LONG TERM CAPITAL GAINS ARE EARNED FROM TRANSFER OF THE SAID SHARES LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE DECISION OF THE AO IN THIS REGARD NEEDS TO BE REVERS ED. LD. COUNSEL SUBMITTED THAT THE CIT(A) ALLOWED THE CLAIM OF THE ASSESSE E AND THE SAME MAY NOT CALL FOR ANY AMENDMENT. ITA NO.247/PUN/2010 & ITA NO.1539/PUN/2011 SHRI GAURAV A. THAKKAR 3 4. ON HEARING BOTH THE SIDES ON THIS ISSUE WE PERUSED THE SAID CIRCULAR OF CBDT NO.06/2016 DATED 29-02-2016 AND PROCEE D TO EXTRACT PARA 3(B) WHICH READS AS UNDER : 3(B) IN RESPECT OF LISTED SHARES AND SECURITIES HELD FOR A PERIOD OF MORE THAN 12 MONTHS IMMEDIATELY PRECEDING THE DATE OF ITS TRANSFER IF THE ASSESSEE DESIRED TO TREAT THE INCOME ARISING FROM T HE TRANSFER THEREOF AS CAPITAL GAIN THE SAME SHALL NOT BE PUT TO DISPUTE BY THE ASSESSING OFFICER . 5. THE ABOVE PORTION OF THE CIRCULAR IS CATEGORICAL IN DIREC TING THE AOS TO NOT TO DISPUTE THE CLAIM OF LONG TERM CAPITAL GAINS. CON SIDERING THE ABOVE BINDING NATURE OF THE CIRCULAR ON THE FIELD OFFICERS AND ON FINDING THAT THE ASSESSEE FULFILLED THE SAID CONDITIONS WE ARE OF TH E VIEW THAT THE ORDER OF THE CIT(A) GRANTING RELIEF TO THE ASSESSEE WITH RE SPECT TO THE CLAIM OF LONG TERM CAPITAL GAINS IS CONFIRMED. THEREFORE THE ORDER OF THE CIT(A) ON THIS ISSUE IS FAIR AND REASONABLE AND IT DOES NOT CALL FO R ANY INTERFERENCE ON THIS ISSUE. 6. REGARDING THE AOS DECISION OF TREATING THE SHORT TERM CAPITAL GAINS AS BUSINESS INCOME AO OPINED THAT THE SAID GAINS CONS TITUTES BUSINESS INCOME CONSIDERING THE LARGE NUMBER OF TRANSACT IONS INVOLVING THE TURNOVER OF THE ASSESSEE. IN THE PROCESS THE AO DISRESPECTED THE ENTRIES IN THE BOOKS OF ACCOUNT. ASSESSEE REFLECTED THE RELEVANT SHARES AS INVESTMENTS IN THE BOOKS. AO REJECTED THE ASSESSEES IN TENTION OF BOOKING THE GAINS EARED IN TRADING OF THE SAID SHARES SHOWN AS INVESTMENT IN BOOKS. BEFORE US IT IS THE CLAIM OF THE ASSESSEE THAT TH E ASSESSEE IS CONSISTENTLY BOOKING SUCH GAINS AS SHORT TERM CAPITAL GA INS OVER THE YEARS. IT IS SUBMITTED THAT SUCH CLAIMS ARE ALLOWED WITHOUT ANY D ISTURBANCE. IN THE PROCESS AO ALSO FAILED TO APPRECIATE THE JUDGMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. GOPAL PUROHIT 222 CTR 5 82 FOR RELIANCE TO THE PRINCIPLE OF CONSISTENCY. CIT(A) FOLLOWED THE SAID PR INCIPLE OF ITA NO.247/PUN/2010 & ITA NO.1539/PUN/2011 SHRI GAURAV A. THAKKAR 4 CONSISTENCY APART FROM OTHERS AND GRANTED RELIEF TO THE ASSESSEE. IN OUR OPINION THE ORDER OF THE CIT(A) ON THIS ISSUE IS ALSO FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 7. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED. ITA NO.1539/PUN/2011 (A.Y. 2007-08) 8. THE ISSUES RAISED IN THIS APPEAL OF THE REVENUE ARE IDE NTICAL TO THE ONES ALREADY ADJUDICATED BY US IN THE APPEAL OF THE REVENUE FOR A.Y. 20 06- 07. IN THIS A.Y. 2007-08 ALSO AO TREATED THE LONG TERM C APITAL GAINS AS WELL SHORT TERM CAPITAL GAINS AS BUSINESS INCOME OF THE A SSESSEE IGNORING THE CONTENTS OF CBDT CIRCULAR NO.06/2016 DATED 29-02-20 16 AS WELL AS THE PRINCIPLE OF CONSISTENCY ENUNCIATED BY THE HONBLE BOM BAY HIGH COURT IN THE CASE OF GOPAL PUROHIT (SUPRA) AND CONFIRMED BY THE HONBLE APEX COURT. WE APPROVED THE DECISION OF THE CIT(A) ON BOTH TH E ISSUES FOR A.Y. 2006-07 AND DISMISSED THE GROUNDS RAISED BY THE REVENU E. FOLLOWING THE SAME REASONING WE DISMISS THE GROUNDS RAISED BY THE REV ENUE FOR A.Y. 2007-08. 9. IN THE RESULT BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 10 TH DAY OF NOVEMBER 2017. SD/- SD/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) /JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 10 TH NOVEMBER 2017. ITA NO.247/PUN/2010 & ITA NO.1539/PUN/2011 SHRI GAURAV A. THAKKAR 5 / COPY OF THE ORDER FORWARDED TO : BY ORDER // TRUE COPY // //TRUE COPY// SENIOR PRIVATE SECRETARY / ITAT PUNE THE APPELLANT THE RESPONDENT THE CIT(A) - II NASHIK CIT - II NASHIK B BENCH PUNE; / GUARD FILE.