Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (12) TMI 489 - ITAT MUMBAIIncome from sale of shares - Nature of income - short term capital gain or business income - Held that:- From the record, we found that assessee was having capital of ₹ 2.30 crores as against investment in shares of ₹ 1.21 crores. Thus, capital was much more than the investment in shares. There was secured loans of 5.23 lakhs against assessee‟s own Kisan Vikas Patra, and bank overdraft of ₹ 11.56 lacs against assessee‟s own FDR‟s. Thus, loan from bank was only against assessee‟s own security which cannot be treated as business advance. Assessee was also having loan from family members without any interest. From the record we also found that assessee has no business income. No evidence on record to suggest that assessee had any establishment for running share activities. Assessee has also not claimed any business expenditure in respect of her activity of dealing in shares. No organized activity to suggest a business activity in existence. No significant risk exposure from borrowings. Capital is more than investments in shares. Secured loans are not significant compared to the level of investment in shares and any case, obtained on security of liquid assets. Unsecured loans are from family members and after taking into account corresponding loans given to family members, the net amount is not significant. From the record, we also found that in the immediate preceding assessment year 2005-2006, assessment was framed u/s.143(3) r.w.s.153A dated 31/03/2010, wherein AO has accepted assessee‟s claim of short term capital gains on sale of shares, however, in the assessment year 2007-08 to 2009-2010, the AO has followed his order for assessment year 2006-07 without mentioning any peculiar facts for treating the capital gain as business income. We found that decision of Supreme Court in Radhasaomi Satsang vs. CIT (1991 (11) TMI 2 - SUPREME Court ) has been relied by CIT (A) on proposition that each year's assessment is final for that year does not govern later year and principle of res judicata is not applicable to income tax proceedings. In view of the above, we direct the AO to treat gain arising out of sale of shares as short term capital gains rather than business income.
|