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2011 (8) TMI 1115 - ITAT HYDERABADRevisional Power of Commissioner u/s 263 - Assessee contended that initially a show cause notice u/s 263 was issued - After a long pause, the successor Commissioner of Income-tax issued again a show cause notice under S.263 of the Act on proposing revision on entirely different grounds - The commissioner was not justified in assuming the revisional jurisdiction u/s 263 - HELD THAT:- As held in the case of MALABAR INDUSTRIAL CO. LTD. VERSUS COMMISSIONER OF INCOME-TAX [2000 (2) TMI 10 - SUPREME COURT], the Commissioner can exercise revision jurisdictional u/s 263 if he is satisfied that the order of the assessing officer sought to be revised is (i)erroneous; and also (ii) prejudicial to the interests of the revenue. The view so taken by the AO without making the requisite inquiries or examining the claim of the assessee will per se be an erroneous view and hence will be amenable to revisional jurisdiction u/s 263. Second reason is that it is not taking of any view that will take the matter under the scope of Section 263. The view taken by the Assessing Officer should not be a mere view in vacuum but a judicial view. As already stated earlier, we are not able to appreciate on what material was placed before the Assessing Officer at the assessment stage to take such a view. The assessee has also not been able to lead enough evidence to show to us that any inquiry was made by the Ao in this regard. Therefore mere allegation that the Assessing Officer has taken a view in the matter will not put the matter beyond the purview of Section 263 unless the view so taken by the Assessing Officer is a judicial view consciously based upon proper inquiries and appreciation of all the relevant factual and legal aspects of the case. In the case of income tax matters each assessment year is an independent assessable distinct unit in which principles of res judicata are not applicable. The income of each assessment year and admissible expenses are determined in each year considering the facts and circumstances of the case prevailing during the year. As per the facts and circumstances of the case if there is a change in the facts and circumstances, a different view as per the changed facts and circumstances is required to be taken - Thus Principle of consistency can't be followed in income tax matters. In this case, the CIT came to conclusion that the assessee is engaged in the business of buying and selling of shares and income arising out of these transactions has to be considered as income from business instead of considering the same as income from capital gain. Accordingly, we do not find any infirmity in the order of the CIT. The same is confirmed - Decision against Assessee. Profit arising out of sales of shares - Income from business or Capital Gain? - Assessee was frequently purchasing and selling the shares and mutual funds - CIT(A) treated such income as income from profit and gains of business or profession instead of Capital gain - HELD THAT:- In our opinion, whether or not a person carried on business in a particular commodity must depend upon volume, frequency, continuity and regularity of transactions of purchase and sale in a class of goods and the transaction must ordinarily be entered into with a profit motive. After analysing the statement, it is observed that assessee is buying and selling shares and mutual funds in the same year very frequently. Looking into the volume, frequency, continuity and regularity of transactions of purchase and sale in shares by the assessee, it cannot be said that these transactions were entered into only for the purpose of investment and there was no motive of the assessee to earn profit. Therefore, only inference which can be drawn is that the income earned by the assessee out of sale and purchase of these shares was an income under the head ‘profit and gains of business or profession.' Therefore, the CIT is justified in treating the profit arising out of sale of shares acquired by the assessee as income from business - Decision against Assessee.
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