TMI Blog2017 (2) TMI 847X X X X Extracts X X X X X X X X Extracts X X X X ..... wance in respect of expenditure relevant to the activity of shares and securities - Alternatively, it has been contended that the AO be directed to delete the disallowance or he may be directed to grant rebate under section 88E - Held that:- A perusal of the record shows that an application under section 154 of the Act was filed before the ld.CIT(A). Since this issue has already been relegated to the AO for readjudication and there is no specific finding at the end of the AO on this issue. Moreover, the order of the ld.CIT(A) based on an application under section 154 of the Act has not been challenged before the Tribunal, it became final. In view of this development, we are of the view that ends of justice would meet if we set aside this issue to the file of the AO for re-adjudication in accordance with law. - ITA.No.1280/Ahd/2011 - - - Dated:- 16-2-2017 - SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER For The Assessee : Shri Deepak R. Shah, AR For The Revenue : Shri James Kurian, Sr.DR ORDER PER RAJPAL YADAV, JUDICIAL MEMBER: Assessee is in appeal before the Tribunal against order of the ld.CIT(A)-II, Baroda dated 19.11.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties. 3. Every day's delay must be explained does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common sense pragmatic manner. 4. When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. 5. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk. 6. It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so. 5. Similarly, we would li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should not forget the opposite party altogether. It must be borne in mind that he is a looser and he too would have incurred quiet a large litigation expenses. It would be a salutary guideline that when courts condone the delay due to laches on the part of the applicant the court shall compensate the opposite party for his loss. 6. We do not deem it necessary to re-cite or recapitulate the proposition laid down in other decisions. It is suffice to say that the Hon ble Courts are unanimous in their approach to propound that whenever the reasons assigned by an applicant for explaining the delay, then such reasons are to be construed with a justice oriented approach. 7. In the light of the above, if we examine the explanation of the assessee, then it would reveal that the delay in filing the appeal was caused on account of misconception of the procedure for filing the appeal before the Tribunal. The assessee remained under the impression that appeal against order on an application under section 154 purported to be filed before the ld.CIT(A) as well as impugned order could be filed together. In our opinion, it is a bona fide error and not adopted as a dilatory strategy, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hare broking or dealing. The appellant also contended that classification in the accounts is 'investments' and not as 'stock-in-trade'. This can be verified from audit reports. The appellant also submitted details of investment of last three years by submitting copies of audited accounts. It is also contended that she had never valued investment portfolio in the manner in which a trader of shares values his stock-in-trade. For holding stock-in-trade, there is no need to get the asset registered in the name of owner running the business whereas in the case of capital asset identification of owner of capital asset is must in order to determine the period of holding as well as the quantum of capital gains to be taxed in the hands of respective owners. It is further contended that if the shares are held as stock-in-trade then the valuation would be at cost or market price whichever is /ess which means that the appellant had valued the shares at cost which also proves that shares are held as investment and not as stock-in-trade. Appellant relied upon the recent decision of IT AT, 3 Bench Mumbai in the case ofJ.M. Shares Stock brokers Ltd., IT A No.2801/Mum/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts of the appellant's case. Considering these, the transactions in the share in case of appellant has to be treated as capital gain as against business income treated by the Assessing Officer. I therefore allow these grounds and direct the Assessing Officer to treat the share transactions as short term capital gain as against business income. In the light of above it can rightly be held that the main business activity of your appellant is an investor, and not a trader or dealer in shares and securities. The learned Assessing Officer ought to have taken in to consideration the Circular No. 4/2007 dated 15.06.2007 issued by C.B.D.T. giving guidelines in respect of capital asset and trading asset. The aforesaid circular states: Capital asset is defined in Section 2(14) of the Act. Long-term capital assets and gains are dealt with under Section 2(29A) and Section 2(29B). Short-term capital assets and gains are dealt with under Section 2(42A) and Section 2(42B). Trading asset is dealt with under Section 28 of the Act. The Central Board of Direct Taxes (CBDT) through Instruction No. 1827 dated August 31, 1989 had brought to the notice of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company is to derive income by way of dividend etc. then the profits accruing by change in such investment (by sale of shares) will yield capital gain and not revenue receipt. CBDT also wishes to emphasize that it is possible for a tax payer to have two portfolios, i.e. an investment portfolio comprising of securities which are to be treated as capital assets and a trading portfolio comprising of stock-intrade which are to be treated as trading assets. Where an assesses has two portfolios, the assessee may have income under both heads i.e., capital gains as well as business income. Assessing officers are advised that the above principles should guide them in determining whether, in a given case, the shares are held by the assessee as investment (and therefore giving rise to capital gains) or as stock-in-trade (and therefore giving rise to business profits). The assessing officers are further advised that no single principle would be decisive and the total effect of all the principles should be considered to determine whether, in a given case, the shares are held by the assessee as investment or stock-in-trade. 12. These instructions shall supplement the earl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n held that in cases where transactions are mixed it would be proper to treat share held for 30 days or less as business transaction. Accordingly the Assessing Officer is directed to treat all transaction wherein shares have been held for 30 days as less as trading transaction while share held for more then 30 days would be considered as short term capital gains. The appellant may furnish required information for working out the above before the Assessing Officer. 3. Ground No. 3 is not pressed and therefore the same is treated to have been withdrawn. 4. In the result, the appeal is partly allowed. 11. Before us, the ld.counsel for the assessee contended that CBDT had issued Circular No.6/2016 on 29.2.2016. According to this circular, if an assessee has been showing holding of listed shares irrespective of period as an investment in different assessment years, then the assessee should be treated as an investor. Accrding to the ld.counsel for the assessee, this circular has been relied upon by the ITAT, Pune Bench in the case of Suresh Babulal Shah (HUF) Vs. DCIT, (2016) 75 taxmann.com 105. Tribunal while considering the circular has observed that this circular clarifies t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the record shows that an application under section 154 of the Act was filed before the ld.CIT(A) and the ld.CIT(A) has decided this application vide order dated 31.3.2011. Relevant part of the order of the ld.CIT(A) on this application reads as under: 2. The appellant vide his application has pointed out that an apparent mistake has occurred while disposing off the Ground of Appeal. The ground No. 4 is remaining to dispose off. Ground No. 4 as per grounds of appeal is as followed:- On the facts and in the circumstances of the case the learned Assessing Officer erred in not allowing deduction under chapter VI-A of the Act. The appellant therefore in the interest of justice hereby prays that the Assessing Officer be directed to grant deductions u/s. 80C and 88E as per the provisions of the Act. 3. From the order dated 19.11.2010 it is noticed that this ground was remained to be adjudicated. Since the claim under chapter VI-A is a legal claim, the Assessing Officer is directed to examine the claim and pass a speaking order as per law. 4. In the result, the rectification application filed by the appellant on 17th February, 2011 stands disposed off in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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