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Commissioner of Income-Tax Versus SMAA Enterprises P. Ltd.

2016 (5) TMI 336 - JAMMU AND KASHMIR HIGH COURT

Short-term capital gain v/s income from business - sale & purchase of shares - Assessing Officer treated the company as a trading company - Held that:- The assessee has declared purchases/holding of shares as investment for the past several years and surplus has been claimed as capital gains before the assessing authority and said facts are evident from the reply of the assessee dated November 21, 2008 and the appellate authority also has mentioned about the claim of the assessee with reference .....

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tment at cost and declared the same as investment as per the balance-sheet as on March 31, 2006. It is also stated in the order that the shares have been held for more than 30 number of days which is evident from the holding period shown by the assessee in more than 92 per cent. of the transactions and the assessee retained the shares for appreciation in value and not with an intension of commercial motive. The assessee is not registered with any authority or body such as the Security Exchange B .....

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t considered by the assessing authority as well as the appellate authority, the contention of the Revenue that the assessee is doing stock-in-trade and not investments cannot be accepted and no substantial question of law arises for determination in these Income-tax appeals. - Decided against revenue - I. T. A. No. 129 of 2012 and I. T. A. Nos. 4, 5, 6 and 7 of 2013 - Dated:- 2-2-2016 - N. Paul Vasanthakumar (CJ) And Tashi Rabstan, JJ. For the Petitioner : Aruna Thakur For the Respondent : M/s. .....

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ctively. 3. In I. T. A. No. 129 of 2012 the Tribunal allowed the appeals preferred by the respondent, which were filed against the orders of the Commissioner of Income-tax (Appeals), Bathinda dated May 18, 2010 for the assessment year 2006-07. The contention of the respondent before the Tribunal was that the assessing authority as well as the appellate authority were not justified in treating the short-term capital gain of ₹ 1,80,75,100 as income from business and levying the tax at 30 per .....

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sessment for the accounting years 2001-02, 2002-03 and 2003-04 were processed under section 143(1) of the Act and no notice under section 148 or 143(2) of the Act was ever issued. Therefore, the assessment for the assessment years 2001-02, 2002-03 and 2003-04 had attained finality where the assessee had declared the purchase and sale of the shares as an investment which has been accepted by the Department. However, for the subsequent years the Assessing Officer treated the company as a trading c .....

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eceived the substantial dividend unlike the trader. The assessee has filed two paper books, i.e., first paper book in volume 1 containing 518 pages and another paper book containing pages 519 to 615 pages. 5. The Tribunal by applying the Circular No. 4 of 2007, dated June 15, 2007 (see [2007] 291 ITR (St.) 384 ), accepted the plea of the assessee and relying upon the judgment of the hon'ble Supreme Court in CIT v. Oswal Agro Mills Ltd. reported in [2009] 313 ITR 24 (SC) allowed the appeal by .....

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treated such holdings in the past as stock-in-trade. It is also stated in the order that the claim of the Revenue that the assessee is doing stock-in-trade is without any basis and no material was brought on record to show that the assessee had been valuing the holding of shares as at the end of each year on first- in, first-out (FIFO) method and the assessee had valued investment at cost and declared the same as investment as per the balance-sheet as on March 31, 2006. It is also stated in the .....

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borrowed funds and no contra material has been placed on record by the Revenue to come to a different conclusion. Thus, a factual finding has been given by the Tribunal stating that the Department cannot change the stand in subsequent years without any changing material. The said factual finding having been recorded based on appreciation of documents, which were not considered by the assessing authority as well as the appellate authority, the contention of the Revenue that the assessee is doing .....

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