TMI Blog2016 (5) TMI 269X X X X Extracts X X X X X X X X Extracts X X X X ..... t there is no deeming provisions for unit to be considered as share. Thus units are not shares. In the present facts also no specific provision has been pointed out to us which would deem the units in a mutual funds and/or bonds to be shares either for the purposes of the Act or for any other purposes. In that view of the matter, in our view, the decision of the Apex Court in Apollo Tyres Ltd. (supra) would cover the controversy arising for our consideration as units are not shares and therefore dealing in units cannot be considered to be shares. - Decided in favour of assessee - Income Tax Appeal No. 2368 of 2013 - - - Dated:- 25-4-2016 - M. S. Sanklecha And A. K. Menon, JJ. For the Appellant : Mr. Arvind Pinto For the Res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed profit/loss as speculative business on its income from share trading as well those from mutual funds. This was revealed by the fact that for the year ending 31st March, 2003 the respondentassessee had shown closing stock of shares at ₹ 6.69 crores while the opening stock on 1st April, 2003 for the subject assessment year was shown as ₹ 1.01 crores and the balance of ₹ 5.67 crores was shown as opening stock of mutual funds/bonds. This was done by the respondentassessee in view of the decision of the Apex Court in Apollo Tyres Ltd. vs. CIT 255 ITR 273 rendered on 2nd May, 2002. However, the Assessing Officer held that the closing stock on the last day of the preceding assessment year should be the opening stock for the su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered to be shares for the purposes of Section 73 of the Act. Thus according to him the decision of the Supreme Court in Apollo Tyres (supra) would not have application to units of mutual funds and bonds other then those of Unit Trust of India. Further reliance is placed upon a decision of the Delhi High Court in CIT Vs. DLF Commercial Developers Limited (Income Tax Appeal No.94 of 2013) rendered on 11th July, 2013 wherein the Delhi High Court held that the derivatives would be considered as shares under Section 73 of the Act in view of the fact that their value depended upon the value of its underlying financial instruments. In support of the aforesaid decisions Mr. Pinto submits that the value of the units of the mutual funds dealt with by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds and/or bonds to be shares either for the purposes of the Act or for any other purposes. In that view of the matter, in our view, the decision of the Apex Court in Apollo Tyres Ltd. (supra) would cover the controversy arising for our consideration as units are not shares and therefore dealing in units cannot be considered to be shares. 11. The decision of the Delhi High Court in DLF Commercial Developers Limited (supra) relied upon by the Revenue dealt with derivative and not with regard to units of mutual funds. In the facts before the Delhi High Court the underlying instruments were only shares. However, the mutual funds are invested in various types of securities and not limited only to shares in company as pointed out by the Reven ..... X X X X Extracts X X X X X X X X Extracts X X X X
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