TMI Blog2016 (7) TMI 690X X X X Extracts X X X X X X X X Extracts X X X X ..... e period of holding is more than 30 days and not more than twelve months. The Assessing Officer is directed to compute the respective business income and short-term capital gain on sale of shares accordingly as indicated by us as above. - I.T.A. No. 1271/Mum/2012 - - - Dated:- 27-5-2016 - Saktijit Dey (Judicial Member) And Ramit Kochar (Accountant Member) For the Appellant : Sanjiv M. Shah For the Respondent : Ritesh Misra, Departmental representative ORDER Ramit Kochar (Accountant Member) 1. This appeal, filed by the assessee, being ITA No. 1271/Mum/2012, is directed against the order dated December 16, 2011, passed by the learned Commissioner of Income- tax (Appeals)-23, Mumbai (hereinafter called the CIT(A) ), for the assessment year 2008-09, the appellate proceedings before the learned Commissioner of Income-tax (Appeals) arising from the assessment order dated December 27, 2010, passed by the learned Assessing Officer (hereinafter called the AO ) under section 143(3) of the Income-tax Act, 1961 (hereinafter called the Act ). 2. The ground of appeal raised by the assessee in the memo of appeal filed with the Income-tax Appellate Tribunal, Mumbai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of short-term capital gains, the period of holding ranges from five days to 342 days, whereby the average holding period was 98 days. The assessee submitted that it did not undertook intra-day trading of shares or dealing in futures and options (F O). The assessee submitted that he has not indulged in repeated sale and purchase of shares. The assessee submitted that he has only purchased and sold listed securities and mutual funds and no investment is made in sister or related concerns or inde pendent companies. The assessee submitted that he had given funds to broker who invest on the assessee's behalf and there are no repeated trans actions. The assessee relied upon the decision of the honourable Bombay High Court in the case of CIT v. Gopal Purohit [2011] 336 ITR 287 (Bom) ; [2010] 34 DTR 52 (Bom). It was observed by the Assessing Officer that the assessee has traded in about 65 different scrips and there are large number of transactions. The assessee stated that the shares dealt by him are considered as investments in records and the income earned is to be considered as capital gain, while as per the Assessing Officer the income derived from such activity has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffect of all the principles should be considered to determine whether the shares are held by the assessee as investment or stock-in-trade. The assessee submitted that in the preceding years, the short-term capital gains and long-term capital gains declared by the assessee were accepted by the Revenue in the scrutiny assessment under section 143(3) of the Act. The assessee submitted that he is consistently following the same principles as were adopted in the earlier years whereby delivery based shares were treated as investment and gains arising therefrom were treated as capital gains, the same principle should apply for the current year as the facts and circumstances are the same and the short-term capital gain of ₹ 32,70,593 on sale of shares declared by the assessee in the return of income filed with the Revenue should be accepted and brought to tax as short-term capital gains. 7. The learned Commissioner of Income-tax (Appeals) after considering the submissions of the assessee and the assessment order observed that the issue in hand depends upon the factual matrix of the case and each case has different facts which will determine whether the gains arising from shares on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eccan Chronical Holdings Ltd. 12-9-2007, 17-9-2007 29-10-2007 KLG Systels Ltd. 1-10-2007, 3-10-2007, 8-10-2007, 20-11-2007 9-10-2007, 26-10-2007, 30-10-2007, 31-10-2007, 26-11-2007, 5-12-2007, 12-12-2007, 17-12-2007, 10-3-2008 Opto Circuits (India) Ltd. 27-9-2007 7-10-2007, 25-10-2007, 7-11-2007 Voltas Ltd. 28-9-2007, 8-10-2007, 22-10-2007, 24-10-2007, 8-11-2007 9-10-2007, 10-11-2007 The learned Commissioner of Income-tax (Appeals) observed that the intention of the assessee is to trade in the shares and not to hold them as investment. There are repeated buying and selling of shares. There are no employees and no business expenses and the transactions were undertaken through a professional is not relevant these days as what is required these days is a computer and internet connectivity, an elaborate office set up is not required to trade in shares. The learned Commissioner of Income-tax (Appeals) held that principles of res judicata is not applicable to the Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned counsel submitted that no borrowings were made by the assessee for making investment in the shares. The learned counsel also drew our attention to the detail of transactions carried by him for earning short-term capital gains on sale of shares which is also placed at the paper book pages 57-62. The learned counsel for the assessee has relied upon various case law which are also placed separately in the form of paper book of case law, in particular the decision of the Income-tax Appellate Tribunal in the case of Asst. CIT v. Naishadh V. Vachharajani (ITA No. 6429/Mum/2009, dated February 25, 2011) which is affirmed by the honourable Bombay High Court in ITA (L) No. 1042 of 2011 dated September 22, 2011, and also the decision of the honourable Bombay High Court in the case of CIT v. Gopal Purohit [2011] 336 ITR 287 (Bom) ; [2010] 228 CTR (Bom) 582. The learned counsel for the assessee also relied upon the decision of the Income-tax Appellate Tribunal in the case of Nagindas P. Sheth (HUF) v. Asst. CIT (ITA No. 961/Mum/2010 dated April 5, 2011) and in the case of Ramesh Babu Rao v. Asst. CIT (ITA No. 3719/Mum/2009 for the assessment year 2005-06 dated April 13, 2011) and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the principles of res judicata are not applicable to the Income-tax proceeding. The assessee's intention clearly indicates to earn profit by buying and selling of shares. The assessee is not having any infrastructure which is not material as these days trading is done through computers and internet. 11. The learned counsel for the assessee, in the rejoinder, submitted that the principle of consistency has to be followed although the principles of res judicata are not strictly applicable to Income-tax proceedings. The learned counsel relied upon the decision of the honourable Bombay High Court in the case of Gopal Purohit [2011] 336 ITR 287 (Bom). 12. We have considered the rival contentions and also perused the material available on record including the case law relied upon by the assessee. We have observed that the assessee is engaged in the business and is proprietor of M/s. Movements, M/s. International Ship Agency and M/s. S. B. Shroff engaged in the business of transporters, hire charges and cargo handling agents. The assessee also received salary from Silver Shield Energy Pvt. Ltd. The assessee is also having share of profit from partnership firms, M/s. Cargo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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