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Commissioner of Income Tax-16 Versus Smt. Datta Mahendra Shah

2015 (9) TMI 970 - BOMBAY HIGH COURT

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 circular. This finding of fact by the CIT (A) has been upheld on examinati .....

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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 Jasani ORDER P. C. 1. This appeal under Section 260A of the Income Ta .....

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n 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 of the following: (a) that the assessee dealt with the shares of m .....

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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 gains even when losses were suffered in a particular year; (c) dealing .....

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art 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 capital gains; (i) dividend Income earned was over ₹ 8.50 lakhs; .....

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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) came to the conclusion that the finding of the CIT (A) calls for no .....

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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. This was because the impugned order has followed the order dated 3 .....

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: "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 2008-09 was perused by the then CIT-16, Mumbai and the said CIT had recom .....

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ifferent 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 the same facts viewed them from a different perspective to conclude .....

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e 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 gains'. This is particularly so on application of CBDT circula .....

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