ACIT, Chandigarh v. Sh. Paramjit Singh Battu, Chandigarh

ITA 549/CHANDI/2011 | 2006-2007
Pronouncement Date: 19-09-2011 | Result: Dismissed

Appeal Details

RSA Number 54921514 RSA 2011
Bench Chandigarh
Appeal Number ITA 549/CHANDI/2011
Duration Of Justice 3 month(s) 27 day(s)
Appellant ACIT, Chandigarh
Respondent Sh. Paramjit Singh Battu, Chandigarh
Appeal Type Income Tax Appeal
Pronouncement Date 19-09-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 19-09-2011
Date Of Final Hearing 05-09-2011
Next Hearing Date 05-09-2011
Assessment Year 2006-2007
Appeal Filed On 23-05-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE MS SUSHMA CHOWLA JUDICIAL MEMBER AND SHRI MEHAR SINGH ACCOUNTANT MEMBER ITA NO. 549/CHD/2011 ASSESSMENT YEAR: 2006-07 ACIT C-4(1) V SHRI PARAMJIT SINGH BATTU CHANDIGARH. # 3431 SECTOR 38 CHANDIGARH. PAN: AAQPB-8028B & C.O.NO. 56/CHD/2011 IN ITA 549/CHD/2011 SHRI PARAMJIT SINGH BATTU V ACIT C-4(1) # 3431 SECTOR 38 CHANDIGARH. CHANDIGARH. (APPELLANT) (RESPONDENT) DEPARTMENT BY: SHRI AJAY SHARMA ASSESSEE BY: SHRI AJAY JAIN DATE OF HEARING : 05.09.2011 DATE OF PRONOUNCEMENT : 19.09.2011 ORDER PER MEHAR SINGH AM THIS IS AN APPEAL BY THE REVENUE AND THE CROSS OBJECTION BY THE ASSESSEE AGAINST THE ORDER OF CIT( A) DATED 12.01.2011 RELATING TO ASSESSMENT YEAR 2006-07 AGAI NST THE ORDER PASSED UNDER SECTION 143(3) OF THE I.T. ACT 1961. 2. IN THE APPEAL THE REVENUE HAS RAISED THE FOLLOW ING GROUNDS OF APPEAL : 1.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN ALLOWING APPEAL OF THE ASSESSEE WITHOUT APPRECIATING THE FACTS OF THE CASE. 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN NOT TAKING INTO ACCOUNT THE SHORT TERM CAPITAL GAIN AS BUSINESS INCOME WHILE RECALCULATING THE NET PROFIT IN THE COMPUTATION SHEET RESULTING IN TOTAL INCOME AT RS.26 93 877/- INSTEAD OF RS.90 75 277/-. 3. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GROUND OF APPEAL BEFORE THE APPEAL IS HEARD AND IS DISPOSED OFF. 3. LD. DR SUPPORTED THE ORDER OF THE AO AND CONTEND ED THAT LD. CIT(A) ERRED IN NOT TREATING THE SHORT TER M CAPITAL GAIN AS BUSINESS INCOME WHILE RECALCULATING THE NET PROFIT IN THE COMPUTATION SHEET RESULTING IN TOTAL INCOME AT RS.26 93 877/- INSTEAD OF RS.90 75 277/-. 4. LD. AR ON THE OTHER HAND CONTENDED THAT THE APPELLANT IS A DEALER AS WELL AS INVESTOR IN SHARES . HE ARGUED THAT THE CIT(A) PASSED THE ORDER AFTER TAKING COGNI ZANCE OF THE REMAND REPORT. THE LD. AR ALSO POINTED OUT THA T IN THE ASSESSMENT YEAR 2004-05 THE AO ACCEPTED THE CONTEN TION OF THE ASSESSEE AND HENCE RULE OF CONSISTENCY IS APPLI CABLE TO THE FACTS OF THE PRESENT CASE. HE ALSO REFERRED TO VARIOUS RELEVANT PAGES OF THE PAPER BOOK AS ALSO THE RELEVA NT PARAS OF THE CIT(A)S ORDER AS WELL AS ASSESSMENT ORDER. 5. WE HAVE CAREFULLY PERUSED AND CONSIDERED THE FAC TS OF THE CASE RIVAL SUBMISSIONS AND THE PAPER BOOK F ILED BY THE ASSESSEE. THE FACTS OF THE CASE ARE; THAT THE ASSESSEE IS AN INDIVIDUAL WHOSE ONLY INCOME IS FROM TRANSACTION S IN SHARES. THE ASSESSEE HAD FILED A RETURN SHOWING IN COME OF 3 RS.71 62 710/- WHICH INCLUDED INCOME OF RS.5 13 248 /- UNDER THE HEAD BUSINESS AND PROFESSION FROM TRAD ING IN SHARES AND SECURITIES. THE ASSESSEE ALSO SHOWED SH ORT TERM CAPITAL GAIN AMOUNTING TO RS.66 30 243/- AND LONG T ERM CAPITAL GAIN AMOUNTING TO RS.23 06 141/- FROM TRANS ACTIONS IN SHARES AND INCOME FROM OTHER SOURCES AMOUNTING T O RS.49 590/-. 6. THE LD. CIT(A) AFTER APPRECIATING THE FACTUAL A ND LEGAL MATRIX OF THE CASE AS ALSO THE REMAND REPORT SUBMITTED BY THE AO ADJUDICATED THE ISSUE IN PARA 8 OF THE IM PUGNED APPELLATE ORDER. IT WOULD BE APPROPRIATE TO REPROD UCE FINDINGS OF THE LD. CIT(A) AS CONTAINED IN PARA 8 T O 10 OF THE SAID ORDER : I HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND MATERIAL ON RECORD. I FIND FORCE IN THE ARGUMENTS PUT FORTH BY THE APPELLANT BEFORE ME. IN MY VIEW FOR THE FOLLOWING REASONS THE TRANSACTIONS IN MUTUAL FUNDS ARE DIFFERENT : A) THE APPELLANT HAD DEALT IN ONLY SIX MUTUAL FUNDS DURING THE YEAR DURING THE YEAR. B) OUT OF THE SIX THE APPELLANT EARNED LONG TERM CAPITAL GAIN ON ONE (HSBC MUTUAL FUND) THE NATURE OF WHICH HAS NOT BEEN DISPUTED BY THE AO. C) THERE WAS NO CAPITAL GAIN/LOSS ON ANOTHER (HSBC CASH FUND-DAILY DIVIDEND) WHICH WAS A DAILY DIVIDEND YIELDING FUND. IT IS ALSO EVIDENT THAT THE ONLY INCOME THAT THE ASSESSEE COULD EARN BY INVESTING IN SUCH A FUND WAS DIVIDENDS. 4 D) OUT OF THE REMAINING FOUR FUNDS THE HOLDING PERIOD OF TWO (FIDELITY EQUITY FUND-DIVIDEND AND HDFC PREMIER MULTI CAP FUND) WAS MORE THAN FIVE MONTHS. E) FURTHER THE APPELLANT HAS MADE ONLY ONE TRANSACTION FOR INVESTMENT AS WELL AS FOR DISPOSAL OF THE SHORT TERM CAPITAL GAIN YIELDING FUNDS EXCEPT IN THE CASE OF HDFC PREMIER MULTI CAP FUND WHICH WAS DISPOSED OFF IN TWO LOTS AFTER A HOLDING OF ALMOST FIVE AND EIGHT MONTHS IN BOTH THE CASES. 9. IN VIEW OF THE ABOVE THE INCOME IS HELD TO BE INCOME FROM BUSINESS EXCEPT INCOME FROM MUTUAL FUNDS AS DISCUSSED IN PARA 8 ABOVE AND THE RECALCULATION IS DONE BELOW AS PER THE CONCLUSION REACHED BY THE AO IN THE REMAND REPORT AS WELL AS MY OBSERVATIONS IN THE FOREGOING PARA ON MUTUAL FUND. REBATE FOR STT U/S 88E HAS TO BE ALLOWED ON THE ENTIRE BUSINESS INCOME. 10. THE APPELLANTS TOTAL INCOME IS THEREFORE COMPUTED AT RS.2693877.06 (BUSINESS INCOME AT RS.2444972.31 + SHORT TERM CAPITAL GAIN FROM MUTUAL FUNDS AT RS.248904.75). 7. ON BARE PERUSAL OF THE FACTUAL MATRIX OF THE CAS E AND RELEVANT MATERIAL IN THE CONTEXT OF FINDINGS RECORD ED BY THE CIT(A) AS REPRODUCED ABOVE WE DO NOT FIND ANY INFI RMITY IN THE SAID FINDINGS OF THE CIT(A). THEREFORE WE ARE OF THE CONSIDERED OPINION THAT THE FINDINGS OF THE LD. CIT (A) DESERVED TO BE UPHELD AND HENCE THE SAME ARE UPHELD . 8. RESULTANTLY THE APPEAL OF THE REVENUE IS DISMIS SED. 9. NOW WE TURN TO DISCUSS AND DEAL WITH THE CONTENT S OF THE CROSS OBJECTION RAISED BY THE ASSESSEE. IN THE CROSS 5 OBJECTION THE ASSESSEE HAS RAISED THE FOLLOWING GR OUND OF APPEAL : THE LD. CIT(A) CHANDIGARH HAS ERRED BY UPHOLDING SHORT TERM CAPITAL ON SHARES AS BUSINESS INCOME. 10. HAVING REGARD TO THE ADJUDICATION MADE IN REVEN UES APPEAL WE DO NOT FIND ANY SUBSTANCE IN THE CROSS O BJECTION RAISED BY THE ASSESSEE. CONSEQUENTLY THE CROSS OB JECTION RAISED BY THE ASSESSEE IS DISMISSED. 11. IN THE RESULT APPEAL OF THE REVENUE AND THE CR OSS OBJECTION OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH SEPT. 2011. SD/- SD/- (SUSHMA CHOWLA) (MEHAR SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 19 TH SEPT. 2011 POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE D.R INCOME-TAX DEPARTMENT CHANDIGARH ASSISTANT REGISTRAR ITAT