Smt. Chandrika Rashmikant Patel, Dharmaj v. The Addl.CIT.,Range-3,, Baroda

ITA 2483/AHD/2011 | 2008-2009
Pronouncement Date: 30-04-2015 | Result: Allowed

Appeal Details

RSA Number 248320514 RSA 2011
Assessee PAN AERPP3062N
Bench Ahmedabad
Appeal Number ITA 2483/AHD/2011
Duration Of Justice 3 year(s) 6 month(s) 26 day(s)
Appellant Smt. Chandrika Rashmikant Patel, Dharmaj
Respondent The Addl.CIT.,Range-3,, Baroda
Appeal Type Income Tax Appeal
Pronouncement Date 30-04-2015
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 30-04-2015
Date Of Final Hearing 22-04-2015
Next Hearing Date 22-04-2015
Assessment Year 2008-2009
Appeal Filed On 04-10-2011
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE SHRI PRAMOD KUMAR A.M. AND SHRI S.S. GODARA J.M.) ITA NO. 2483 / A HD/2011 A . Y. 200 8 - 0 9 SMT. CHANDRIKA RAHMIKANT PATEL VS. ACIT BARODA. C/O PRANNATH PETROLEUM NR. JALARAM MANDIR DHARMAJ CHOKDI DHARMAJ (PAN: AERPP 3062N) (APPELLANT) (RESPONDENT) ASSESSEE/APPELLANT BY : SHRI P.L. KUREEL SR. D.R. REVENUE/RESPONDENT BY : MS. URVASHI SHODHAN A.R. DATE OF HEARING : 2 2 .04.2015 DATE OF PRONOUNCEMENT : 3 0 . 04.2015 PER S.S. GODARA JUDICIAL MEMBER: TH IS ASSESSEE S APPEAL FOR A . Y . 200 8 - 0 9 ARISES FROM O R DER OF THE CIT(A) - I BARODA DATED 19.8. 2011 PASSED IN CASE NO. 166 /20 10 - 11 AFFIRMING THE A SSESSING O FFICER S ACTION ASSESSING INCOME FROM SALE TRANSACTIONS AT RS.1 37 07 905/ - AS BUSINESS INCOME INSTEAD OF SHORT TERM CAPITAL GAINS IN PROCEEDINGS U/S . 143(3) OF T HE INCOME T AX ACT 1961 (IN SHORT THE ACT ) 2 2. THE ASSESSEE - INDIVIDUAL EARNS INCOME FROM SHARE IN PROFITS OF FIRM CAPITAL GAINS AND OTHER SOURCES . SHE FILED HER RETURN ON 31.7.2008 ADMITTING INCOME OF RS.1 44 94 890/ - . THE ASSESSING OFFICER TOOK UP SCRUTINY. HE COME ACROSS ASSESSEE S SHORT TERM CAPITAL GAINS AMO UNTING TO RS.1 37 07 905/ - DECLARED FROM SHARE TRANSACTIONS. PER ASSESSING OFFICER THE ASSESSEE HAD LARGE NUMBER OF TRANSACTIONS IN NUMEROUS AND VARIED SCRIPTS ALMOST ON DAILY BASIS. AND ALSO MULTIPLE TRANSACTIONS ON A SINGLE DAY. HE SOUGHT TO TREAT THESE SHORT TERM CAPITAL GAINS AS HER BUSINESS INCOME. 3. THE ASSESSEE APPEARS TO HAVE FILED HER RESPONSE. SHE PLEADED THAT PURCHASE AND SALE OF SHARES WITH PROFIT MOTIVE WOULD RESULT IN THE TRANSACTION BEING IN THE NATURE OF TRADE AS AGAINST INVESTMENT IN SHA RES OF A COMPANY WHEREIN THE MOTIVE IS TO EARN PROFIT S BY WAY OF DIVIDENDS. SHE CLAIMED TO BE COVERED BY THE LATTER INSTANCE BEING A CASE OF PERSONAL INVESTMENTS MADE IN SHARES. THE ASSESSING OFFICER TOOK INTO ACCOUNT VARIOUS DETERMINING FACTORS IN DECIDIN G THE NATURE OF THE INCOME IN QUESTION I . E. F REQUENCY / VOLUME OF TRANSACTIONS PURCHASE OF 28 83 782 AND SALE OF 27 33 760 SHARES IN THE RELEVANT PREVIOUS YEARS OPENING AND CLOSING STOCK READING 3 52 978 SHARES AND 4 94 000 SHARES RESPECTIVELY RELATING T O 112 SCRIPS AS WELL TOTAL TURNOVER READING RS.68.25 CRORES. THE ASSESSEE S ACTION OF HAVING PURCHASED AND SOLD A NU MBER OF SCRIPTS WITHIN A DAY OR TWO WAS ALSO TAKEN NOT E OF. I T NEED NOT BE EMPHASIZED THAT HOLDING PERIOD OF THE SHARES IN QUESTION WAS NOT MORE THAN ONE YEAR. THE 3 ASSESSING OFFICER IN THESE CIRCUMSTANCES OBSERVED THAT THE ASSESSEE HAD ENGAGED HERSELF IN A SYSTEMATIC ACTIVITY IN SALES AND PURCHASE S OF SHARES HER PRIMARY AIM WAS TO ROL L OVER THE SHARES A NUMBER OF TIMES A LIKE STOCK IN TRADE AN D EARNED CONSEQUENTIAL PROFITS . AND A LSO THAT SHE HAD DECLARED MEAGRE DIVIDEND INCOME OF RS.1 50 928/ - TO HOLD THAT THE IMPUGNED INCOME HAD TO BE TREATED AS BUSINESS INCOME OF INSTEAD OF SHORT TERM CAPITAL GAINS. HE ACTED ACCORDINGLY IN ASSESSMENT ORDER DA TED 22.12.2010. 4. THE ASSESSEE PREFERRED AN APPEAL. THE CIT(A) QUOTES HIS PREDECESSOR S ORDERS DATED 30 AND 31 ST OF AUGUST 2010 RELATING TO ASSESSMENT YEARS 2006 - 07 AND 2007 - 08 RESPECTIVELY FOLLOWING THE SAME COURSE OF ACTION. THEREAFTER HE AFFIRMS THE ASSESSING OFFICER S ACTION REITERATING THE AFORESAID CORROBORATIVE CIRCUMSTANCES. THE ASSESSEE RAISED AN ALTERNATE PLEA SEEKING DEDUCTION OF INTEREST EXPENSES OF RS.86 63 474/ - INCURRED TOWARDS FUNDS BORROWED FROM GM FINANCIAL AND KOTAK MAHINDRA BANK FOR P URCHASING SHARES AND OTHER EXPENSES DEBITED IN THE PROFIT AND LOSS ACCOUNT. THE CIT(A) HAS DIRECTED THE ASSESSING OFFICER TO VERIFY THE CORRECTNESS THEREOF. THEREFORE THE ASSESSEE HAS FILED THE INSTANT APPEAL. 5. WE HAVE HEARD BOTH SIDES AND GONE THROUGH THE CASE FILE. THE SOLE QUESTION THAT ARISES FOR OUR CONSIDERATION IS AS TO WHETHER THE ASSESSEE S INCOME FROM SHARE TRANSACTION S READING RS.1 37 07 905/ - IS SHORT TERM CAPITAL GAINS OR BUSINESS INCOME. IT IS MADE CLEAR THAT ANSWER TO THIS QUESTION IS PURE LY A FACTUAL ONE KEEPING IN MIND FACTS AND CIRCUMSTANCES OF EACH CASE. THE ASSESSEE HAS FILED 4 A PAPER BOOKS BEFORE US. IT TRANSPIRES THAT SHE CAME IN APPEAL IN ASSESSMENT YEARS 2006 - 07 AND 2007 - 08 AGAINST THE CIT(A) S APPEAL DATED 30 AND 31 ST AUGUST 2010 (SUPRA) RAISING A VERY SIMILAR GRIEVANCE. A COORDINATE BENCH IN ITAS NO. 3006 & 3007/AHD/2010 DECIDED ON 31.12.2013 HAS RESTORED THE ISSUE BACK TO THE ASSESSING OFFICER FOR A FRESH DECISION. THE ASSESSEE INFORMS US THAT THE ASSESSING OFFICER IS YET TO PASS HIS CONSEQUENTIAL ORDER. IT HAS COME ON RECORD THAT THE LOWER AUTHORITIES HAVE QUOTED SIMILARITY OF FACTS INVOLVED IN THE IMPUGNED ASSESSMENT YEAR VIS - A - VIS THOSE IN THE EARLIER ONES. THE REVENUE FAILS TO REBUT THIS FACTUAL POSITION. THEREFORE WE FEEL THA T INTEREST OF JUSTICE WOULD BE MET IN CASE THE ISSUE RAISED IN THE PRESENT C A S E IS ALSO REMITTED BACK TO THE ASSESSING OFFICER FOR A FRESH DECISION IN THE LIGHT OF HIS CONSEQUENTIAL ORDER BEING PASSED IN EARLIER ASSESSMENT YEARS. WE ORDER ACCORDINGLY. THE ASSES SEE S GROUNDS STAND SET ASIDE TO THE FILE OF ASSESSING OFFICER. 6. THE ASSESSEE S APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON THIS DAY THE 3 0 T H APRIL 2015 IN AHMEDABAD. S D / - S D / - (PRAMOD KUMAR) (S.S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED : 3 0 APRIL 2015 PRABHAT KUMAR KESARWANI COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. CONCERNED CIT 4. CIT(A) 5. D.R. ITAT AHMEDABAD 6. GUARD FILE 5 BY ORDER DY./ASSTT. REGISTRAR ITAT AHMEDABA D