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2016 (3) TMI 1119 - ITAT MUMBAI

2016 (3) TMI 1119 - ITAT MUMBAI - TMI - Gain arising from sale of shares - capital gain or business income - Held that:- There is categorical finding that the Department had been accepting the stand that the assessee was consistently investing in shares and the capital gains, offered by the assessee was assessed either as long term gain or short term gain while passing order u/s 143(3) of the Act. Identical was the situation for A.Ys.2005-06 and 2006-07 framed u/s 143(3) of the Act and the same .....

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by this submission, because, every investor invest the money for gain and not for loss. - In the basis of principle of judicial discipline, consistency has to be followed and once in a particular year, if any view is taken, in the absence of any contrary material, no contrary view is to be taken as finality to the litigation is also a principle which has to be followed. Before us, no contrary facts or any adverse material was brought on record by the Revenue, therefore, on the principle of .....

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₹ 29,64,051/-, being gain arising from sale of shares, under the head profession and gains arising from business or profession against the short term capital gains offered by the assessee under the head capital gains . 2. During hearing, the ld. counsel for the assessee, Shri Nishit Gandhi, claimed that the impugned issue, on identical facts was decided by the Tribunal in the case of assessee itself for A.Y. 2006-07 vide order dated 18/02/2015 (ITA No.3520/Mum/2010). This factual matrix w .....

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tal gains amounting to ₹ 29,64,051/-, on sale of shares. Such shares were showed as investment and in earlier years were assessed under the head capital gains. The investment was made out of surplus funds available with the assessee. The Assessing Officer was of the view, that the assessee had been carrying out system activity of purchase and sale of shares by keeping a close watch on the market situation, therefore, considering the frequency and volume of trade, he treated the gain as bus .....

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ion of the Tribunal dated 18/02/2015, we are reproducing hereunder the factual matrix from the aforesaid order for ready reference and analysis:- This is an appeal filed by the Revenue against the order of CIT(A), dated 16-2-2010 for the Assessment Year 2006-07, in the matter of order passed u/s.143(3) of the I.T. Act, wherein following grounds have been taken by the Revenue :- 1. On the facts and in the circumstances of the case and in law, the Learned CIT(A) has erred in directing to treat the .....

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nd in law, the Learned CIT(A) has failed to appreciate the in depth analysis made by the AO before treating the gains as business income and that circular no. 4 of 2007 has be taken into consideration to decide whether the Gains are to be treated as such or as business. 3. On the facts and in the circumstances of the case and in law, the learned CIT(A) failed to appreciate the fact that the transaction is shown whether by himself or through his agent has to be treated as assessee's own trans .....

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3.3 I have carefully perused the assessment order, submissions made by the A.R on behalf of the appellant and the facts of the case. The issue involved is in respect of treatment of long term capital gains on sale of shares and sale of mutual funds, sold after 01.10.2004 aggregating to ₹ 14,10,430/- [on sale of shares ₹ 5,87,180/- & on mutual funds ₹ 8,23,250/- as business income by the A.O and thereby denying exemption to the appellant uls.10(38) of the Act. The other issu .....

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- + 1,65,193] is not correct and in support of his claim he has contended that the correct figure of short term capital gain shall be ₹ 12,86,854/- [11,21,661+1,65,193]. The AO after relying on the CBDT's circular bearing No.4/2007 dated 15.6.2007 and after having given other reasonings treated the long term capital gain of ₹ 14,10,430/- and short term capital gain of ₹ 15,25,348/- as business income in the hands of the appellant. The A.R of the appellant has contended befo .....

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n the case of CIT vs. Gopal Purohit delivered on 6th January, 2010' and has prayed that income derived by the appellant from investment activity be treated as long term and short term capital gains respectively and the same should not be treated as income from business. Based on the finding recorded by ITAT in the case of CIT vs. Gopal Purohit 122 TTJ Mumbai 87, "it is open to an assessee to maintain two separate portfolios one relating to investments in shares and other relating to bus .....

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ppellant is squarely covered by the ratio laid down in the case of CIT vs. Gopal Purohit mentioned supra, therefore, the AO is directed to treat the long term capital gains on sale of shares and sale of mutual funds, sold after 01.10.2004 aggregating to ₹ 14,10,430/- [on sale of shares ₹ 5,87,180/- & on mutual funds ₹ 8,23,250/-] as such and allow the exemption to the appellant u/s.10(38) of the Act. Apart from the above, the AO is also directed to verify the transaction of .....

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ngly, allowed. 4. Ground No.4 reads as under: "On the facts and circumstances of the case as well as in Iaw:- The learned ITO erred in considering shares & mutual funds as stock in trade instead held as investments in the books of accounts and thereby gain made on the transfer/redemption as business profit in disregard of the facts of the case of appellant. He failed to appreciate the facts that the appellant is not a trader in shares & the units of mutual funds in investor. In this .....

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s below and found from the record that the assessee was consistently investing in shares. Capital gains offered by the assessee either as long term or short term was accepted by the department in all the earlier assessment years u/s.143(3). The assessee has also placed on record the assessment order framed u/s.143(3) for the A.Y.2005-06 & 2006-07. After giving detailed finding at para 4, the CIT(A) found that assessee has earned long term capital gains of ₹ 14,10,430/- on sale of share .....

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f shares and mutual funds. 5. In the result, appeal of the Revenue is dismissed. 2.4. In the aforesaid order of the Tribunal, it is noted that there is categorical finding that the Department had been accepting the stand that the assessee was consistently investing in shares and the capital gains, offered by the assessee was assessed either as long term gain or short term gain while passing order u/s 143(3) of the Act. Identical was the situation for A.Ys.2005-06 and 2006-07 framed u/s 143(3) of .....

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