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2016 (7) TMI 191 - BOMBAY HIGH COURT

2016 (7) TMI 191 - BOMBAY HIGH COURT - TMI - Transaction of shares - business income or capital gain - whether the Income-tax Appellate Tribunal was right in holding that the appellant's intention was to trade in shares and not to hold the same as investment portfolio? - Held that:- The impugned order of the Tribunal has elaborately dealt with the contention of the appellant that as for the earlier and subsequent assessment years profits arising on account of purchase and sale of shares has been .....

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year. Further differences in facts was also brought out in a chart in the impugned order on 13 parameters between the subject assessment year and the earlier and subsequent assessment years. In these circumstances the impugned order very correctly holds that the rule of consistency would not apply in the present case as there is a change in facts existing in the subject assessment year. - There is no merit in the submission that reliance on the inadequate mention in the Balance Sheet is imma .....

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ed keeping in context the facts which give rise to the questions which were posed for our consideration. The order passed at the stage of admission of a tax appeal, cannot be treated as precedent. Thus the view taken by the Tribunal on the facts as existing in the present case is a possible view. Appeal dismissed. - Income Tax Appeal No. 2437 of 2013 - Dated:- 7-6-2016 - M. S. Sanklecha And A. K. Menon, JJ. For the Appellant : Mr. V. S. Hadade For the Respondents : Mr. A. R. Malhotra a/w N.A. Ka .....

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n shares and not to hold the same as investment portfolio? 3. Brief facts: (a) The appellant is an individual engaged in the business of dealing in derivatives i.e. Futures and Options. The respondentassessee in its return of income for the A.Y. 200809 had claimed an amount of ₹ 2.17 crores as a short term capital gains on account of dealing in shares and securities. The Assessing Officer by order dated 1st November, 2010 did not accept the appellant's claim of being investor in shares .....

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nt of ₹ 1.96 crores was held to be classifiable as claimed by the appellantassessee as short term capital gain. 5. Being aggrieved, the Revenue carried the issue in appeal to the Tribunal. The Tribunal by the impugned order dated 10th July, 2013 on a detailed analysis of the transactions which were carried out by the appellant concluded that for the subject assessment year, the entire amount of ₹ 1.96 crores is also to be brought to tax under the head 'business income'. Thus, .....

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s indicating that which was purchased during the year had been sold in its entirety during the same year. The stock turnover ratio and capital turnover ratio is recorded in the order at 1:16 and 1:10 during the subject assessment year. On these facts, the impugned order allowed the Revenue's appeal treating the entire amount of ₹ 2.17 crores as income from trading in shares i.e. business income. 6. Being aggrieved, the appellant is in appeal before us. Mr. Hadade, the learned counsel f .....

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is further submitted that the impugned order proceeds on the basis that the appellant in its balance sheet had not indicated that any amount was invested in shares inasmuch as they have not prepared an appropriate balance sheet. This finding according to Mr. Hadade cannot be sustained in view of the fact that she is an individual and therefore under no obligation to maintain and file a balance sheet. Lastly, he submits that this Court has admitted appeals raising identical question as raised he .....

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same should be done in the subject Assessment years. The Tribunal on analysis of the facts noticed that the facts in the subject assessment year are different from the facts in the earlier and subsequent assessment years. Particularly the number of transactions in shares were in single or double digits in the years sought to be compared while transactions of purchase and sale of shares is of the magnitude of 346 transactions in the subject assessment year. Further differences in facts was also b .....

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