ACIT CIR 25(3), MUMBAI v. PRATIK SHAILESH SHAH, MUMBAI

ITA 248/MUM/2012 | 2007-2008
Pronouncement Date: 03-10-2013 | Result: Dismissed

Appeal Details

RSA Number 24819914 RSA 2012
Assessee PAN AAWPS9346K
Bench Mumbai
Appeal Number ITA 248/MUM/2012
Duration Of Justice 1 year(s) 8 month(s) 23 day(s)
Appellant ACIT CIR 25(3), MUMBAI
Respondent PRATIK SHAILESH SHAH, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 03-10-2013
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 03-10-2013
Date Of Final Hearing 03-10-2013
Next Hearing Date 03-10-2013
Assessment Year 2007-2008
Appeal Filed On 10-01-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH MUMBAI BEFORE SRI H.L. KARWA PRESIDENT AND SHRI N.K.BILL AIYA AM ./ I.T.A. NO. 248/MUM/2012 ( / ASSESSMENT YEAR: 2007-08) ACIT CIR-25(3) BANDRA KURLA COMPLEX BANDRA (EAST) MUMBAI-400051 / VS. PRATIK SHAILESH SHAH 403 UMANG MATHURADAS EXT. ROAD KANDIVALI(W) MUMBAI-400067 !' $ ./ PAN :AAWPS9346K ( '% / APPELLANT ) .. ( &''% / RESPONDENT ) '% ( ) / APPELLANT BY : SHRI SANJEEV JAIN &''% ( ) / RESPONDENT BY : SHRI JAYESH DADIA ( *$ / DATE OF HEARING : 03/10/2013 + ( *$ / DATE OF PRONOUNCEMENT : 03/10/2013 -. / O R D E R PER N.K. BILLAIYA AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-35 MUMBAI DATED 31/10/2011 PERTAINING TO A .Y.2007-08. 2. THE SOLE GRIEVANCES OF THE REVENUE IS THAT THE C IT(A) ERRED IN DIRECTING THE AO TO ACCEPT THE CLAIM OF SHORT TERM CAPITAL GAIN ON PROFIT ARRIVING FROM PURCHASE AND SALE OF SHARES INSTEAD O F BUSINESS INCOME TREATED BY THE AO. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO OBSERVED THAT THAT ASSESSEE HAS SHOWN INCOME FROM SHORT TERM CAPI TAL GAINS AT RS.10 65 045/- INCOME FROM THE LONG TERM CAPITAL G AIN AT RS.4 627/- AND 2 ITA NO.248/MUM/2012 PRATIK SHAILESH SHAH. INCOME FROM DERIVATIVES F & O RS.1 54 238/-. THE AO WAS OF THE OPINION THAT THE INCOME ARISING OUT OF TRANSACTION IN SHARE S OUGHT TO BE TREATED AS BUSINESS INCOME. THE AO FURTHER OBSERVED THAT A PE RUSAL OF THE DETAILS OF THE SHORT TERM CAPITAL GAINS SHOW THAT THE ASSESSEE HAS BEEN ENGAGED IN THE BUY AND SELLING OF SHARES ON A REGULAR BASIS. THE AO FURTHER OBSERVED THAT THE ASSESSEE HAS TAKEN RS.61 04 159/- AS UNSEC URED LOANS WHICH ARE USED BY THE ASSESSEE FOR PURCHASE OF SHARES. THE A O SOUGHT CLARIFICATION FROM THE ASSESSEE AS TO WHY SHORT TERM CAPITAL GAIN SHOULD NOT BE TREATED AS BUSINESS INCOME. ASSESSEE FILED A DETAILED REPL Y AND EXPLAINED THAT HE IS ONLY INVESTOR AND NOT A TRADER. ASSESSEE ALSO R ELIED UPON THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CAS E OF GOPAL PUROHIT . THE AO WENT ON TO DISCUSS VARIOUS JUDICIAL DECISIONS IN THE LIGHT OF THE CIRCULAR OF THE CBDT DATED 15/06/2007 AND CAME TO THE CONCLU SION THAT THE CAPITAL GAINS SHOWN BY THE ASSESSEE IS IN FACT BUSI NESS INCOME OF THE ASSESSEE AND CONSIDERING THE CAPITAL GAINS AS BUSIN ESS INCOME ASSESSMENT PROCEEDINGS WERE COMPLETED. 4. ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A) AN D REITERATED THAT HE IS ONLY AN INVESTOR AND NOT A TRADER. ASSESSEE FUR THER POINTED OUT THAT IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR I.E. 2006 -07 THE TRIBUNAL HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE IN ITA NO.883/MUM/2010 DATED 21.10.2011. 5. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSE E AND THE DECISION IN THE CASE OF GOPAL PUROHIT 29 SOT 117. THE CIT(A) FINALLY CONCLUDED THAT THE TRIBUNAL IN ASSESSEES OWN CASE HAS DECIDED THI S ISSUE IN FAVOUR OF THE ASSESSEE. THE SAME DECISION DESERVES TO BE FOLLOWE D IN THE YEAR UNDER CONSIDERATION ALSO AND DIRECTED THE AO TO ACCEPT TH E CLAIM OF CAPITAL GAINS. 6. AGGRIEVED BY THIS REVENUE IS BEFORE US. THE LD . DR SUBMITTED THAT IN THE PRECEDING ASSESSMENT YEAR THERE IS NO FINDING BY THE AO THAT THE 3 ITA NO.248/MUM/2012 PRATIK SHAILESH SHAH. ASSESSEE HAS PURCHASED SHARES BY BORROWED CAPITAL. HOWEVER DURING THE YEAR UNDER CONSIDERATION THERE IS A SPECIFIC FINDI NG BY THE AO THAT THE ASSESSEE HAS BORROWED CAPITAL IN HIS BALANCE-SHEET; THEREFORE THE FACTS ARE NOT SIMILAR WITH THE FACTS OF PRECEDING ASSESSM ENT YEAR AND ACCORDINGLY THE DECISION OF THE TRIBUNAL IN EARLIER SHOULD NOT BE CONSIDERED FOR THE YEAR UNDER CONSIDERATION. REPLY ING TO THIS SUBMISSION OF THE DR THE LD. AR DREW OUT ATTENTION TO THE BAL ANCE-SHEET FOR THE YEAR UNDER CONSIDERATION AND THE BALANCE-SHEET OF THE EA RLIER YEAR I.E. YEAR ENDING 31/03/2006. IT IS THE SAY OF THE AR THAT IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR ALSO ASSESSEE HAD BORROW ED FUNDS FROM ITS FAMILY MEMBERS ON WHICH NO INTEREST WAS PAID BY THE ASSESSEE. THE SAME BORROWED FUNDS HAVE BEEN BROUGHT FORWARD TO THE YEA R UNDER CONSIDERATION AND ONCE AGAIN THE ASSESSEE PAID NO I NTEREST ON SUCH BORROWALS. THEREFORE IT CANNOT BE SAID THAT FACTS ARE NOT SIMILAR. THE COUNSEL FURTHER SUBMITTED THAT THE TRIBUNAL IN ASSE SSEES OWN CASE HAS CONSIDERED ALL THESE FACTS AND HAS DECIDED THE ISSU E IN FAVOUR OF THE ASSESSEE; THEREFORE THE SAME VIEW DESERVES TO BE F OLLOWED. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND CAR EFULLY PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE RELEVANT MA TERIAL EVIDENCE BROUGHT ON RECORD IN THE FORM OF A PAPER-BOOK. WE HAVE CAR EFULLY PERUSED THE BALANCE-SHEET OF THE ASSESSEE AS ON 31/03/2006 AND AS ON 31/03/2007. WE FIND THAT AS ON 31/03/2006 THERE WERE BORROWALS FROM FAMILY MEMBERS TO THE TUNE OF RS.60 57 668/- WHICH STOOD A S ON 31/03/2007 AT RS.61 04 159/-. WE FIND THAT BORROWINGS FROM THE SAME PERSONS HAVE BEEN BROUGHT FORWARD TO THIS YEAR. WE ALSO FIND TH AT IN BOTH THESE YEARS NO INTEREST PAYMENT HAS BEEN MADE. WE HAVE ALSO PE RUSED THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y.2006-07 IN ITA NO.883/MUM/2010 DATED 21/10/2011. WE FIND FORCE IN THE CONTENTION OF THE COUNSEL THAT THE FACTS AND CIRCUMSTANCES ARE ID ENTICAL . THAT BEING SO 4 ITA NO.248/MUM/2012 PRATIK SHAILESH SHAH. WE HAVE NO HESITATION IN FOLLOWING THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y.2006-07(SUPRA). RESPECTFULLY FOLLO WING THE DECISION OF THE TRIBUNAL FINDINGS OF THE CIT(A) ARE CONFIRMED. 8. IN THE RESULT APPEAL FILED BY THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 03/10/2013 -. ( + $ /- 03/10/2013 ( 0 SD/- (H.L.KARWA) SD/- (N.K.BILLAIYA) HONBLE PRESIDENT ACCOUNTANT MEMBER MUMBAI; /- /DATED : 3 RD OCTOBER 2013. SHEKHAR. P.S. -. -. -. -. ( (( ( &*12 &*12 &*12 &*12 32 * 32 * 32 * 32 * / COPY OF THE ORDER FORWARDED TO : 1. '% / THE APPELLANT 2. &''% / THE RESPONDENT. 3. 4 ( ) / THE CIT- MUMBAI. 4. 4 / CIT(A)- MUMBAI 5. 250 &* / DR ITAT MUMBAI 6. 06 7 / GUARD FILE. -. -. -. -. / BY ORDER '2* &* //TRUE COPY// 8 88 8 / 9 9 9 9 : : : : (DY./ASSTT. REGISTRAR) / ITAT MUMBAI