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2015 (9) TMI 970 - BOMBAY HIGH COURT

2015 (9) TMI 970 - BOMBAY HIGH COURT - [2015] 378 ITR 304 (Bom.) - Gains from Share Transactions - Short Term Capital Gain OR Business Income - Held that:- On examination of all the facts it has inter alia come to the conclusion that the activities carried out by the respondent assessee cannot be classified under the head 'business income' but more appropriately as claimed by the respondent assessee under the head 'short term capital gains'. This is particularly so on application of CBDT circula .....

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erverse or arbitrary in the context of the facts. The view taken is a possible view on the facts and therefore, calls for no interference. Thus we see no reason to entertain the question as proposed. - Decided against revenue. - Income Tax Appeal No. 1601 of 2013 - Dated:- 9-9-2015 - M. S. Sanklecha And G. S. Kulkarni, JJ. For the Petitioner : Mr. A.R.Malhotra with Mr.N.A.Kazi For the Respondent : Mr.K.Shivram, Senior Adv. with Ms.Aarti Sathe, Mr.Rahul Hakani, Mr.Kalpesh Turalkar i/b. Mr.Atul Ja .....

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reating the Gains from Share Transactions as Short Term Capital Gain whereas it was to be taxed under the head "Business Income" ?" 3. The respondentassessee is a senior citizen having income on account of capital gains, business income and income from other sources. The Assessing Officer was of the view that the amount claimed as short term capital gains of ₹ 9.25 crores was in fact business income and has to be taxed accordingly. This view was inter alia taken on the basis .....

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d income under the head 'short term capital gains' and was subjected to tax under the head 'business income'. 4. In appeal, the Commissioner of Income Tax (Appeals) (CIT (A)) on consideration of the following facts: (a) respondent - assessee has been an investor in shares and has consistently treated its entire investment in shares as "investment in shares" & not "stockintrade"; (b) the income earned on sale of shares was offered as short term capital gain .....

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lted from the shares held during the earlier assessment year as a part of the opening investment on 1 April 2007. (g) the respondent had not resorted to churning of shares or repetitive transactions in shares of the same company. (h) for the earlier Assessment Years i.e. AY 2005-06 and AY 2006-07, the Assessing Officer had, in the proceedings under Section 143(3) of the Act, accepted the stand of the respondent assessee and taxed the profit earned on purchase and sale of shares as short term cap .....

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ent - assessee in terms of Instruction No.1827 dated 31 August 1989 issued by the Central Board of Direct Taxes laying down the tests for distinguishing the shares held in stockintrade and shares held as an investment, the shares held by the respondent - assessee was investment. Thus allowed the appeal of the respondent - assessee and held the income to be treated as short term capital gains. 5. On further appeal by the Revenue, the Tribunal after recording the aforesaid finding of the CIT (A) c .....

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nsideration. Thus in view of the above the impugned order dismisses the revenue's appeal. 6. As we noticed that the Tribunal in the impugned order has relied upon its earlier order dated 31 August 2012 passed in the case of respondent-assessee's son on identical facts, we had by order dated 19 August 2015 directed the Revenue to place on record whether or not any appeal has been preferred against the order of the Tribunal dated 31 August 2012 in the case of respondent-assessee's son. .....

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s son. In paragraphs 7, 8 and 9 of the Affidavit he states as under: "7. I say that in the case of Shri.Jay Mahendra Shah for AY 2008-09, … …. …. …. …. I say that the then CIT-11, Mumbai had not recommended appeal to the Honourable High Court and the then CCIT-I, Mumbai accepted the said recommendation and the said decision was accepted. 8. I say that the order dated 27/02/2013 of the Honourable Tribunal in the case of Smt.Datta Mahendra Shah for AY 2008-0 .....

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h Court was accordingly made. 9. I say that different officers at different times were concerned in taking decisions of filing of appeal to the Hon.High Court in the case of Shri.Jay Mahendra Shah and that of Smt.Datta Mahendra Shah and that the said officers held different jurisdictions." 8. Mr. Malhotra, learned Counsel for the Revenue submits that the impugned order by the Tribunal as well as the order of CIT (A) have viewed the facts from one perspective while the Assessing Officer on t .....

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decision taken in respect of the present appeal. 9. We find that the CIT (A) in his order has considered all the facts including the stand taken by the Revenue as found in the Assessing Officer's order. On examination of all the facts it has inter alia come to the conclusion that the activities carried out by the respondent assessee cannot be classified under the head 'business income' but more appropriately as claimed by the respondent assessee under the head 'short term capital .....

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the Tribunal has taken a particular view which is not shown to be perverse or arbitrary in the context of the facts. The view taken is a possible view on the facts and therefore, calls for no interference. Thus we see no reason to entertain the question as proposed. 10. Before closing we would make a reference of affidavit dated 8 September 2015 of Shri.R.P.Murkunde, Assistant Commissioner of Income Tax. It points out that a decision was taken not to file an appeal from the order dated 31 August .....

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