TMI Blog2016 (10) TMI 892X X X X Extracts X X X X X X X X Extracts X X X X ..... R Per Sandeep Gosain, Judicial Member: The Present Appeal has been filed by the assessee against the order of Commissioner of Income Tax (Appeals)- 8, dated 10.10.2014 on the grounds of appeal mentioned herein below. 1. General : 1.a. erred in treating your appellant as a trader and not as an investor in respect of income arising on sale of shares held by your appellant as investment; 1.b. erred in treating Short Term Gains and Long Term Gains of your appellant as Business income ignoring following relevant facts in case of your appellant: i. Appellant consistently follows the accounting principle of treating investment in Shares as Capital Assets and gains on sale thereof is accounted for as Capital Gains. ii. Your appellant has duly reflected its intention of holding shared by consistently treating them as investment in books of account. iii. In the earlier assessments department assessed treating income from investment in Shares under the head Capital Gains and no fresh facts came to light on investigation. 1.c. erred to conclude appellant's intention based on the frequency, volume, period of holding of script ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an assessee for any period less than a year were to be treated as business income, then the category of STCG and the entire scheme for taxation thereof would become otiose and meaningless, meaning thereby, the statutory provisions like sections 2(42A), 2(42B), 111A etc. would be rendered otiose. It was further submitted that in other words, an assessee can have only one class of capital gain and that is LTCG, because all the capital gain arising from holding shares for a period less than one year would be treated as business income and as per contention of ld. AR this could not be the intention of the lawmakers. Ld. AR submitted that the revenue authorities have misinterpreted the judgements and wrongly applied the same in the case of assessee. In order to support his arguments. Ld. AR drawn our attention at page no.2 wherein the computation of total income for the year under consideration has been shown. On this page it was pointed out that the assessee has categorically shown short term capital gains on sale of shares. Our attention was further drawn at page no.5 of paper book which is Balance Sheet as on 31st March, 2010 wherein also the amount invested in shares had been shown ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts of the present case from that of the facts of the previous year. Revenue authorities have to make out a case different than that of the previous year in order to reach to a different conclusion but in the present case nothing has been demonstrated in the orders passed by revenue authorities more particularly when there is no change in the facts. Even otherwise in a year comprising 365 days, the dealing in 38 scrips in 58 transactions cannot be the only criteria for terming the assessee as an trader . It is an admitted fact that none of the accounts of the assessee shows opening stock or closing stock which is mandatory in the case of trader and moreover nothing has been brought on record by the revenue to show that the assessee had invested by borrowing funds. We have also gone through the judgements in the case of CIT vs. Gopal Purohit rendered by Hon ble Supreme Court as well as other citation relied upon by both the parties. Similar issue on almost identical facts was also decided by coordinate bench of ITAT D Bench in the case of Shri Rajesh C Shah ITA NO. 4135/Mum/2012 for AY 2008- 09 wherein the assessee in that case had carried out 59 number of transaction du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it will be treated as long term capital asset. When there is no instance of repetitive transaction in the same scrips then in the fact and circumstances of the case, we do not see any justification in treating the investment as trading activity. Further when no change has been pointed out or brought on record in the facts and circumstances for the year under consideration in comparison to the facts and circumstances of the earlier years as well as in the subsequent year, therefore, the AO is not permitted to take a different view on a particular issue in the absence of any change in the facts and circumstances. Thus when the claim of the assessee was accepted in the earlier years as well as in the subsequent year then to maintain the principle of consistency the claim of the assessee cannot be denied until and unless there is a material change in the facts and circumstances in the year under consideration. In view of the facts and circumstances, we hold that the surplus arising from purchase and sale of shares in the case of the assessee cannot be treated as business income. Accordingly, we allow the claim of the assessee, the extent of treating the capital gain as business income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been consistently accepted as short term capital gain in preceding and succeeding years, we see no reason for observing departure for the current year. Respectfully following the precedent, we uphold the impugned order. 9. After analyzing the judgements mentioned above we are also of the considered view that when the claim of the assessee was accepted by the revenue authorities in the earlier years as well as in the subsequent year, therefore AO was not permitted to take a different view on a particular issue in the absence of any change in the facts and circumstances of the case, even otherwise to maintain the principle of consistency, the claim of the assessee cannot be denied until and unless , there is a material change in the facts and circumstances of the case. 10. Therefore in view of the above facts and circumstances we hold that the amount received from the purchase and sale of shares in the case of assessee cannot be treated as business income. Accordingly, we allow the claim of assessee and hence the order of CIT(A) of treating the short term capital gain as business income is set aside. In the result, the assessee s appeal is allowed. Order pronounce ..... 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