ACIT 15(2), MUMBAI v. NISHITA V. SHAH, MUMBAI

ITA 5646/MUM/2010 | 2007-2008
Pronouncement Date: 05-11-2014 | Result: Partly Allowed

Appeal Details

RSA Number 564619914 RSA 2010
Assessee PAN AXNPS3141G
Bench Mumbai
Appeal Number ITA 5646/MUM/2010
Duration Of Justice 4 year(s) 3 month(s) 23 day(s)
Appellant ACIT 15(2), MUMBAI
Respondent NISHITA V. SHAH, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 05-11-2014
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 05-11-2014
Date Of Final Hearing 05-11-2014
Next Hearing Date 05-11-2014
Assessment Year 2007-2008
Appeal Filed On 12-07-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B MUMBAI .. . .!'# $ % BEFORE SHRI I.P.BANSAL JM AND SHRI N.K.BILLAIYA A M ITA NO.5646/MUM/2010 : ASST.YEAR 2007-08 ASSTT. COMMISSIONER OF INCOME TAX 15(2) MATRU MANDIR ROOM NO.113 TARDEO MUMBAI 400008 SMT.NISHITA V. SHAH 15/7 NAVJEEVAN SOCIETY LAMINGTON ROAD MUMBAI 400 008 PAN:AXNPS 3141G ( &' / // / APPELLANT) / VS. ( )*&'/ RESPONDENT) &' + + + + /APPELLANT BY : SHRI RUDOLPH N. DSOUZA )*&' + + + + /RESPONDENT BY : SHRI M.SUBRAMANIAN + -.$ / / / / DATE OF HEARING : 05.11.2014 /01 + -.$ / DATE OF PRONOUNCEMENT : 05.11.2014 2 2 2 2 / / / / O R D E R PER I.P.BANSAL (JM) : THIS IS AN APPEAL FILED BY THE REVENUE AND IT IS D IRECTED AGAINST ORDER PASSED BY LD. CIT(A)-26 MUMBAI DATED 05.05.2010 FO R ASSESSMENT YEAR 2007- 08. GROUNDS OF APPEAL READ AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND LAW THE LEARNED CIT(A) HAS ERRED IN HOLDING THAT DELIVERY TO AND FROM THE MAIN BROKER IN THE INSTANT CASE TAKES THE PRESENT CASE OUT OF PURVIEW OF SEC.43(5) OF THE I.T. ACT 1961 AS THE MAIN BROKER BEING AGENT OF THE ASSESSEE IGNORING TH E FACT THAT NO DEMAT ACCOUNT OF ANY PERSON THAT IS THE ASSESSEE OR THE BROKER WA S PRODUCED BEFORE THE ASSESSING 0FFICER OR DURING APPELLATE PROCEEDINGS B Y THE ASSESSEE TO PROVE THAT DELIVERY WAS TAKEN BY THE BROKER ON BEHALF OF THE A SSESSEE ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND LAW THE LEARNED CIT(A) HAS ERRED IN DIRECTING THE ASSESSING OFFICER TO TRE AT THE PROFIT OF RS. 91 71 001/- EARNED BY THE ASSESSEE AS SHORT TERM CAPITAL GAIN A ND NOT AS SPECULATION INCOME OR BUSINESS INCOME OVERLOOKING THE FACT THAT NO DEM AT ACCOUNT OF ANY PERSON WAS PRODUCED BY THE ASSESSEE IN SUPPORT OF DELIVERY OF SHARES AND ALSO IGNORING THE FACTS THAT WHERE THERE IS NO DELIVERY OF SHARES INC OME CAN ONLY BE TAXED OUT OF SALE AND PURCHASE OF SHARES AS SPECULATION OR BUSIN ESS INCOME. ITA NO.5646/MUM/2010 : ASST.YEAR 2007-08 2 2. AT THE OUTSET IT WAS SUBMITTED BY LD. AR THAT IN GROUP CASES SIMILAR APPEALS WERE FILED BY THE REVENUE AND THOSE APPEALS WERE DECIDED BY THE TRIBUNAL VIDE ITS ORDER DATED 15/3/2013 IN THE CASE OF SHRI VIPUL C SHAH SHRI VIMAL C. SHAH AND SMT. VAISHALI V. SHAH IN ITA NOS. 5645 5647 & 5649/MUM/2010. COPY OF THE ORDER WAS ALSO PLACED O N OUR RECORD. IT WAS SUBMITTED THAT IN ALL THESE APPEALS SAME ISSUE WAS RAISED BY THE REVENUE AND THE MATTER WAS RESTORED BY THE TRIBUNAL TO THE FIL E OF LD. CIT(A) WITH THE FOLLOWING OBSERVATIONS: 5. WE HAVE PERUSED THE RECORDS AND CONSIDERED THE R IVAL CONTENTIONS CAREFULLY. THE DISPUTE IS REGARDING NATURE OF INCOME FROM PURC HASE AND SALE OF SHARES BY THE ASSESSEES WHO BELONGED TO THE SAME GROUP. THE A SSESSEES HAD PURCHASED SHARES FROM THE SAME SUB-BROKER WHO IN TURN HAD PUR CHASED THE SHARES FROM THE MAIN BROKER. THE ENQUIRY FROM THE SUB-BROKER REVEAL ED THAT IT HAD NOT TAKEN DELIVERY ON BEHALF OF THE ASSESSEES. THE SUB-BROKER HAD ONLY STATED THAT THE SHARES REMAINED WITH MAIN BROKER AS THERE WERE NO I NSTRUCTIONS FOR THE CLIENTS TO TAKE DELIVERY. IT WAS ALSO SUBMITTED BY SUB- BROKER THAT IT HAD NOT MAINTAINED ANY DEMAT ACCOUNT OF THE CLIENTS. AFTER CONSIDERING THE MATERIAL ON RECORD THE AO OBSERVED THAT THE INCOME FROM SHARE TRANSACTION HAD TO BE CONSIDERED EITHER AS SPECULATION OR NORMAL BUSINESS INCOME BUT SINCE THE RE WAS NO EVIDENCE OF DELIVERY THE AO TREATED THE INCOME AS SPECULATION INCOME. IN APPEAL CIT(A) OBSERVED THAT SUB-BROKER HAD STATED THAT THE SHARES REMAINED WITH MAIN BROKER AND FROM THIS HE CONCLUDED THAT DELIVERY HAD BEEN T AKEN BY THE MAIN BROKER WHICH HAS TO BE CONSIDERED AS DELIVERY BY THE ASSES SEE. CIT(A) ALSO OBSERVED THAT THERE WAS NO DISPUTE THAT DELIVERY HAD BEEN TAKEN B Y MAIN BROKER. HOWEVER WE NOTE THAT THERE IS NO EVIDENCE THAT THE DELIVERY HA D BEEN TAKEN BY MAIN BROKER. SINCE THE ISSUE OF DELIVERY WAS STILL IN DISPUTE WE AGREE WITH THE SUBMISSION OF LD. DR THAT FINDING OF CIT(A) THAT THERE WAS NO DI SPUTE OF DELIVERY WAS NOT CORRECT. NO ENQUIRY HAS BEEN MADE FROM THE MAIN BRO KER CONFIRMING THAT IT HAD TAKEN DELIVERY ON BEHALF OF THE ASSESSEE. MOREOVER EVEN IF DELIVERY HAD BEEN TAKEN CIT(A) WAS REQUIRED TO EXAMINE THE OTHER ASPE CT AS TO WHETHER INCOME FROM SHARE TRANSACTION COULD BE CONSIDERED AS BUSINESS I NCOME OR NOT AS AO CLEARLY INDICATED AS IT COULD BE CONSIDERED AS SPECULATIVE INCOME OR NORMAL BUSINESS INCOME. DETAILS OF SHARE TRANSACTIONS PLACED IN PAP ER BOOK REVEAL THAT SHARES HAVE BEEN SOLD AFTER HOLDING FOR A SHORT PERIOD AND IN SOME CASES THERE ARE REPEATED PURCHASES AND SALE OF SHARES IN SAME SCRIP S WHICH APPARENTLY ARE NOT ATTRIBUTES OF AN INVESTOR. CONSIDERING THE FACTS AN D CIRCUMSTANCES OF THE CASE THE MATTER REQUIRES FRESH EXAMINATION AT THE LEVEL OF C IT(A). WE THEREFORE SET ASIDE THE ORDER OF CIT(A) AND RESTORE THE MATTER TO HIM F OR PASSING A FRESH ORDER AFTER NECESSARY EXAMINATION IN THE LIGHT OF THE OBSERVATI ONS MADE ABOVE AND AFTER ALLOWING OPPORTUNITY OF HEARING TO THE ASSESSEE. THUS IT WAS PLEADED BY LD. AR THAT SIMILAR VIEW MA Y BE TAKEN IN THE PRESENT CASE ALSO. ITA NO.5646/MUM/2010 : ASST.YEAR 2007-08 3 3. LD. DR DID NOT OBJECT TO SUCH SUBMISSIONS OF LD. AR. 4. IN THIS VIEW OF THE SITUATION AFTER HEARING BOT H THE PARTIES RESPECTFULLY FOLLOWING THE AFOREMENTIONED ORDER OF THE TRIBUNAL IN GROUP CASES WE RESTORE THE ISSUE RAISED IN THE PRESENT APPEAL ALSO TO THE FILE OF LD. CIT(A) WITH SIMILAR DIRECTIONS. THE RELEVANT PORTION OF THE ORDER PAS SED BY THE TRIBUNAL IN GROUP CASES HAS ALREADY BEEN REPRODUCED IN THE ABOVE PART OF THIS ORDER. 5. IN THE RESULT FOR STATISTICAL PURPOSES THE APPE AL FILED BY THE REVENUE IS CONSIDERED TO BE ALLOWED IN THE MANNER AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 5 TH NOV. 2014. 2 + /01 34 05/11/2014 0 + : SD/- SD/- (N.K.BILLAIYA) (I.P.BANSAL) $ $ $ $ / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; 3 DATED : 5 TH NOV. 2014. VM. 2 + )-! ; !1- 2 + )-! ; !1- 2 + )-! ; !1- 2 + )-! ; !1-/ COPY OF THE ORDER FORWARDED TO : 1. &' / THE APPELLANT 2. )*&' / THE RESPONDENT. 3. <() / THE CIT MUMBAI. 4. < / CIT(A)- MUMBAI 5. !?: )- / DR ITAT MUMBAI 6. :@ A / GUARD FILE. 2 2 2 2 / BY ORDER *!- )- //TRUE COPY// B BB B/ // /C D C D C D C D (DY./ASSTT. REGISTRAR) / ITAT MUMBAI