Shri Anuj Gaurang Doshi, Ahmedabad v. The ACIT.,Cent.Circle-2(2),, Ahmedabad

ITA 3275/AHD/2009 | 2006-2007
Pronouncement Date: 28-07-2011 | Result: Allowed

Appeal Details

RSA Number 327520514 RSA 2009
Assessee PAN AGSPD3333M
Bench Ahmedabad
Appeal Number ITA 3275/AHD/2009
Duration Of Justice 1 year(s) 7 month(s) 19 day(s)
Appellant Shri Anuj Gaurang Doshi, Ahmedabad
Respondent The ACIT.,Cent.Circle-2(2),, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 28-07-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 28-07-2011
Date Of Final Hearing 28-07-2011
Next Hearing Date 28-07-2011
Assessment Year 2006-2007
Appeal Filed On 09-12-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI JM AND A. N. PAHUJA AM) ITA NO.3275/AHD/20009 A. Y.: 2006-07 ANUJ GAURANG DOSHI 26 SAMASTA BRAHMSHATRIYA SOCIETY PALDI AHMEDABAD VS THE A. C. I. T. CENT. CIR-2(2) AHMEDABAD PA NO. AGSPD 3333 M (APPELLANT) (RESPONDENT) APPELLANT BY SHRI S. N. DIVATIA AR RESPONDENT BY SHRI S. K. MEENA SR. DR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-II I AHMEDABAD DATED 14-09-2009 FOR ASSESSMENT YEAR 2006-07. 2. ACCORDING TO OFFICE OBJECTION THE APPEAL IS TIM E BARRED BY TWO DAYS. THE AFFIDAVIT IS FILED FOR CONDONATION OF DEL AY AND IT WAS EXPLAINED THAT THE POWER OF ATTORNEY HOLDER WHO WAS LOOKING AFTER THE CASE OF THE ASSESSEE WAS OUT OF STATION DUE TO MARR IAGE OF CLOSE RELATIVE THEREFORE THE APPEAL FEES COULD NOT BE D EPOSITED IN TIME. IT WAS THEREFORE PRAYED THAT DELAY MAY BE CONDONED. THE LEARNED DR HAS NO OBJECTION IN CONDONATION OF THE SAME. CONSID ERING THE EXPLANATION OF THE ASSESSEE AND THAT THERE IS A NOM INAL DELAY IN FILING THE APPEAL THE EXPLANATION OF THE ASSESSEE IS ACCE PTED AND THE DELAY IN FILING THE APPEAL IS CONDONED. ITA NO.3275/AHD/2009 ANUJ GAURANG DOSHI VS ACIT CENT. CIR- 2(2) AHMEDA BAD 2 3. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSESS EE FILED RETURN OF INCOME DECLARING INCOME OF RS.7 10 830/-. THE AO ISSUED QUESTIONNAIRE AND THE ASSESSEES REPRESENTATIVE FIL ED THE DETAILS TIME TO TIME. DURING THE YEAR UNDER CONSIDERATION THE A SSESSEE HAS SHOWN THE FOLLOWING INCOME UNDER THE HEAD CAPITAL G AINS: (1) SHORT TERM CAPITAL GAIN RS. 7 57 881/- (2) LONG TERM CAPITAL GAIN RS. 8 91 091/-(CLAIMED EXEMPT) THE AO CONSIDERED THE ISSUE OF CAPITAL GAIN AS BUSI NESS INCOME OF THE ASSESSEE FOR THE REASONS DISCUSSED BY HIM IN TH E ASSESSMENT ORDER FOR ASSESSMENT YEAR 2005-06. THE INCOME SHOWN UNDER THE HEAD CAPITAL GAINS WAS THEREFORE TREATED AS BUSIN ESS INCOME AND TAXED ACCORDINGLY. IT WAS SUBMITTED BEFORE THE LEAR NED CIT(A) THAT INVESTMENT HAD BEEN SHOWN UNDER THE HEAD INVESTMEN T. THE QUANTUM OF INVESTMENT WAS NOT DECISIVE OR RELEVANT. THE BORROWED FUNDS WERE ONLY ON ACCOUNT OF MARGIN MONEY. FURTHER THOUGH THE QUANTITATIVE DETAILS OF THE SHARES HAD NOT BEEN MAI NTAINED A COPY OF THE DEMAT ACCOUNT HAD BEEN PROVIDED. THERE WAS NO F REQUENT TRANSACTION AND THE ASSESSEE HAD DEALT WITH ONLY OF FEW SCRIPTS FOR THE PURPOSE OF WEALTH MAXIMIZATION/DIVIDEND. AS FOR THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDING 31-03-2005 IT HAD BEEN PREPARED ONLY TO ASCERTAIN THE RETURN OF INVESTMENT. STATUS OF THE A SSESSEE WAS THAT OF INVESTOR AS PER CBDT CIRCULAR. THE ASSESSEE WAS A S TUDENT AND HELD SHARES OVER TWO YEARS. THE INVESTMENT WAS ONLY IN F OUR SCRIPTS AND SO THE FACTS WERE DIFFERENT FROM ASSESSMENT YEAR 2005- 06. IN RESPECT OF DISCLOSURE OF SHORT TERM CAPITAL GAIN IT AROSE ONL Y ON SIX SCRIPTS HELD FOR ABOUT TWO MONTHS AND ACQUIRED VIDE MULTIPLE SHA RE APPLICATIONS. ITA NO.3275/AHD/2009 ANUJ GAURANG DOSHI VS ACIT CENT. CIR- 2(2) AHMEDA BAD 3 THEREFORE ACTION OF THE AO IN TREATING THE CAPITAL GAIN AS INCOME FROM BUSINESS WAS NOT JUSTIFIED. THE LEARNED CIT(A) HOWE VER HAS NOT ACCEPTED THE CONTENTION OF THE ASSESSEE AND NOTED T HAT THE AO NOTICED THAT THE SHARES WERE ACQUIRED OUT OF FUNDS FROM BANK THROUGH BORROWED FUNDS AND IN THE ABSENCE OF VOLUME FREQUE NCY CONTINUITY AND REGULARITY OF TRANSACTION OF PURCHASE AND SALES TREATMENT IN THE PAST WAS NOT TREATED IN THE NATURE OF INVESTOR. ORD ER OF THE AO WAS ACCORDINGLY CONFIRMED. 4. THE ASSESSEE ON GROUNDS NO.1 AND 2 CHALLENGED T HE ORDER OF THE LEARNED CIT(A) IN CONFIRMING THE ORDER OF THE A O ON LONG TERM CAPITAL GAIN OF RS.8 91 091/- TREATING AS BUSINESS INCOME. IT IS ALSO EXPLAINED THAT THE LEARNED CIT(A) PASSED NON-SPEAKI NG ORDER THEREFORE IT REQUIRES CANCELLATION. THE ASSESSEE A LSO RAISED ADDITIONAL GROUND OF APPEAL CHALLENGING THE ORDER O F THE LEARNED CIT(A) IN HOLDING THAT SHORT TERM CAPITAL GAIN OF R S.7 57 881/- AS BUSINESS INCOME. THE LEARNED COUNSEL FOR THE ASSESS EE SUBMITTED THAT DUE TO THE ATTENTION OF THE ASSESSEE ESCAPED THIS GROUND WAS NOT RAISED IN THE MAIN GROUNDS OF APPEAL BUT IT IS ARISING OUT OF THE ORDER OF THE LEARNED CIT(A). HE HAS THEREFORE SUB MITTED THAT THE SAME MAY BE ADMITTED FOR HEARING. CONSIDERING THE F ACTS THAT THIS ISSUE IS ARISING OUT OF THE ORDER OF THE LEARNED CI T(A) AND WAS ALSO TAKEN INTO CONSIDERATION BY THE AO WE ADMIT THE AD DITIONAL GROUND OF APPEAL FOR HEARING. 5. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND S UBMITTED THAT ITA NO.3275/AHD/2009 ANUJ GAURANG DOSHI VS ACIT CENT. CIR- 2(2) AHMEDA BAD 4 THE LEARNED CIT(A) DID NOT PASS SPEAKING ORDER. ON THE OTHER HAND THE LEARNED DR RELIED UPON THE ORDERS OF THE AUTHOR ITIES BELOW. 6. ON CONSIDERATION OF THE RIVAL SUBMISSIONS WE AR E OF THE VIEW THAT THE MATTER REQUIRES RECONSIDERATION AT THE LEV EL OF THE LEARNED CIT(A). THE AO CONSIDERING THE ISSUE OF SHORT TERM CAPITAL GAIN AND LONG TERM CAPITAL GAIN FOLLOWED HIS ORDER FOR ASSES SMENT YEAR 2005-06 AND TREATED THE SAME AS BUSINESS INCOME. THE ASSESS EE SUBMITTED BEFORE THE LEARNED CIT(A) THAT THE FACTS ARE DIFFER ENT FROM ASSESSMENT YEAR 2005-06 AND THAT THE SHARES WERE HELD AS INVES TMENT ONLY. THEREFORE THE LEARNED CIT(A) SHOULD HAVE PASSED SP EAKING ORDER CONSIDERING THE OBJECTION OF THE ASSESSEE. THE LEAR NED CIT(A) HOWEVER DID NOT PASS ANY SPEAKING ORDER AND HAS N OT DISCUSSED ANY MERIT OF THE CASE AND HOLDING OF THE SHARES BY THE ASSESSEE DURING THIS PERIOD THEIR FREQUENCY AND THE INTENTI ON OF THE ASSESSEE FOR HOLDING THE SHARES AS INVESTOR OR AS BUSINESSM AN. IN THE ABSENCE OF ANY SPECIFIC FINDING OF FACT BY THE LEARNED CIT( A) PARTICULARLY WHEN THE AO DID NOT PASS ANY SPEAKING ORDER WE ARE OF T HE VIEW THE MATTER REQUIRES RECONSIDERATION AT THE LEVEL OF THE LEARNED CIT(A). WE ACCORDINGLY SET ASIDE THE ORDER OF THE LEARNED CIT (A) AND RESTORE THE GROUND OF APPEAL AS WELL AS ADDITIONAL GROUND OF AP PEAL TO THE FILE OF THE LEARNED CIT(A) WITH DIRECTION TO RE-DECIDE THIS ISSUE AFRESH BY PASSING THE SPEAKING ORDER ON MERIT. THE LEARNED CI T(A) SHALL GIVE REASONABLE SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE LEARNED CIT(A) SHALL DISCUSS THE FACTS OF THE CASE AND THE DETAILS SUBMITTED BY THE ASSESSEE IN THE APPELLATE ORDER WH ILE ADJUDICATING THE ISSUE. ITA NO.3275/AHD/2009 ANUJ GAURANG DOSHI VS ACIT CENT. CIR- 2(2) AHMEDA BAD 5 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28-07-2011 SD/- SD/- (A. N. PAHUJA) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 28-07-2011 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR ITAT AHMEDABAD