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PRINCIPAL COMMISSIONER OF INCOME-TAX-15, KOLKATA Versus SHRI DAULAL KOTHARI

2016 (9) TMI 818 - CALCUTTA HIGH COURT

Shares dealings - treated as investment in shares or business transaction - Held that:- We are inclined to think that neither the assessing officer nor the CIT (Appeals) insisted upon the assessee to produce evidence from its records to show that the transactions were intended to be investments and not mere dealing in shares. The substance of the matter was not thus adverted to. Stress was laid on the treatment given in earlier years which is not of much importance because a wrong view taken in .....

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e shares. On the contrary, the case of the assessee himself is that “the transactions this year are mere change of investment portfolios from bad performing sectors to good performing sectors.” Bad performing shares could not have yielded profit to the assessee as rightly pointed out by the assessing officer. - For the aforesaid reasons we are inclined to think that the matter should go back to the assessing officer. - The questions quoted above need not be answered at this stage because .....

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Advocate. .. for the respondent. ORDER Delay in preferring the appeal is condoned. The appeal is directed against the judgement and order dated 27th July, 2015 passed by the learned Income Tax Appellate Tribunal, Kolkata A Bench, Kolkata in ITA No.1159/Kol/2011 pertaining to the assessment year 2007-2008 by which the learned Income Tax Appellate Tribunal dismissed ITA No.1159/Kol/2011 which was an appeal preferred by the revenue and partly allowed Cross-objection being C.O.No.56/Kol/2011 filed b .....

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ibunal held otherwise ? The question whether any particular transaction is on account of the investment or on account of the trading essentially is a question of intention. Intention is locked in the mind of the person concerned. Intention can only be ascertained from the circumstantial evidence including contemporaneous Books of Accounts of the assessee. Almost similar view was taken by the Supreme Court in the case of CIT vs. ASSOCIATED INDUSTRIAL DEVELOPMENT CO.(P) LTD. reported in (1971) 82 .....

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nces, be in a position to produce evidence from its records as to whether it has maintained any distinction between those shares which are its stockin- trade and those which are held by way of investment. It may be pointed out that in the case of CIT vs. Associated Industrial Development Co.(P)Ltd (supra) there were both types of transactions some were on investment accounts and some were in trading account. In the present case, the case of the assessee is that all transactions were on investmen .....

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as a case of long or short term capital gain. He held it to be a case of business income. The CIT(Appeals), however, held otherwise and his reasoning is as follows : It is seen that the appellant has consistently been showing its shares as investments and the same has been accepted as such by the department in earlier years and the Assessing Officer has not brought in any evidence in his Assessment Order for the present year to the contrary The learned Tribunal has upheld the finding of CIT(A) i .....

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