TMI Blog2022 (3) TMI 1193X X X X Extracts X X X X X X X X Extracts X X X X ..... Trivedi [ 2017 (9) TMI 840 - GUJARAT HIGH COURT] . AO is directed to verify the relevant facts of the case and decide the issue afresh in accordance with law after giving the assessee proper and sufficient opportunity of being heard. Appeal of the assessee is treated as partly allowed for statistical purposes. - ITA No. 3216/Ahd/2014 - - - Dated:- 25-3-2022 - Shri P.M. Jagtap, Vice-President And Shri T.R. Senthil Kumar, Judicial Member For the Assessee : Shri D.K. Parikh, AR For the Revenue : Shri V.K. Singh, Sr DR ORDER PER P.M. JAGTAP, VICE-PRESIDENT : This appeal filed by the assessee is directed against the order of learned Commissioner of Income-Tax (Appeals)-XIV, Ahmedabad ( CIT(A) in short) dated 16.09.2014. 2. Although as many as 10 grounds are raised by the assessee in this appeal, the learned Counsel for the assessee has not pressed Ground Nos. 5, 6 and 7 while Ground Nos. 8, 9 and 10 are general in nature as submitted by him. Grounds which survive for our consideration are only Ground Nos. 1 to 4 which involve a common issue relating to the treatment to be given to the profit arising to the assessee from the transactions in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and also confirmed the same in the col. 8(a) of the form no. 3CD (Rule 6G(2)) wherein the assessee has specifically and with conscious mind has discussed the nature of business as being the Futures Options in shares in the name of Ketan R. Mehta . As such, it can be safely inferred that the assessee has deliberately classified the closing stock of shares as being his investment with an intent to take benefit of the taxation at lower rate and claiming the LTCG as exempt income. The word Intention cannot be gauged by any calibration. The intention of the assessee lies primarily within his own knowledge. As there is no way to find out as to what is running into the mind and soul of any assessee. This needs to be proved by the assessee himself; as to why he considers any particular thing running in his mind as any particular type i.e. in the instant case the assessee need to prove as to why he considers his closing stock of shares held as being his investment . Despite given several opportunities, the assessee failed to furnish complete details in the prescribed format and/or the share trading activity in the form of P L account wherein transactions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can be completed online without stepping out of the office/home from wherever these so called transactions are carried on. With the help of the LAPTOP/Mobile phones though 'SMS , the transactions can be affected, even while on move, which does not require any help of nay persons/employee. Even to make any decision lot of information/ articles/programs are available live on the TV and magazines which does not even requires any help of nay expert. Even otherwise the trading decision needs to be taken by the assessee himself and for that purpose also no employee is required. In case, even if the assessee is not well conversant with the ONLINE system, the transactions in the stock market does not requires any help of the employees as the same can be accomplished through any 'BROKER' which is always just a phone call away. In his individual books of accounts also the assessee has obtained un-secured loans disclosed outstanding at ₹ 33,40,698/- as on 31/03/2010. Further, the fresh capital added in the capital account stands at ₹ 86,18,878/- which are mostly form the books of the M/s Time Tin Containers and the entries were affected through OD account. Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed order at para 4 accepted that share trading and derivative trading activities for which se para: accounts are maintained. The appellant on the basis of total turnover such separate accounts audited. The A.O. at para 5 of impugned order admitted that tax audit report as required ids 44AB of the Act in Form 3CB 3CD was separately submitted for share trading activities and derivative trading activities being done in individual capacity while tax audit report for tin manufacturing submitted separately. The A.O. on the basis of tax audit report at para 5 of impunged order recorded the appellant's income/loss from share investment share trading activities in 'net' i.e. internal profit loss adjusted white working out net STCG, net LTCG, net speculation profit, net derivative loss (being business income). The AO called for details in various Performa's to which appellant submitted details viz demat account, contract note, bills, bank account. The A.O. considered such submission at para 5.6 of the impunged order already discussed at para 4A above). The A.O. thereafter at para 5.7 brought out various test f criteria to examine ascertain about whether assessee is enga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 400 06.11.08 400 11.11.08 200 12.11.08 200 24.12.08 (ii) Premier Ltd 200 22.09.08 200 07.11.08 950 03.11.08 950 07.11.08 The appellant also reflected long term capital loss of ₹ 336585/- in shares which reflect some of the share considered in short term capital loss. This reflect that the brief asstt.order passed by A.O. and relied on by appellant that in earlier year department accepted appellant's investment activities cannot be held/accepted on face of it. I am inclined with A.O. that principle of Resjudicate is not applicable in the income tax Proceedings and each every asstt. year is distinct and different. Now coming to impunged previous year, the appellant reflected short term capital gain of ₹ 24,74,201/-. The details in the table along with computation of income reflec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ences. Some of the example (on illustrative basis) reflect as follows: (a) The table reflecting short term capital gain reflect gain in reference to 'WOCKHARDT in which 12908 shares were purchased on 22/04/09 and sold on 25/11109 but this transaction is not recorded in any of these demat account. On the other hand in the Demat a/c with Action financial services (India) Ltd. there are transfer in and out entries of this scripts with demat a/c with Shah Investor home Ltd. In Shah Investor's home Ltd. demat a/c out of 2000 shares on 23/04/09, 500 share on 05/05/09 purchased, 1000 shares on 23/05/09 and 700 shares on 25/05/09 were sold through C M Oswal shares and securities ltd. as Rolling Market lot. Again 2890 nos. of shares purchased on 06.11.09 and sold 377 on 27/11/09, 1713 on 27.11.09 and 800 on 06.11.10. Again on 29.5.10, 700 shares were purchased. These transactions are not reflected in the table for computation of short term capital gain. Further there are repetitive purchase sale transaction in a single script which clearly reflect the intention of appellant that said purchase sale so frequently cannot be for investment or to earn dividend or long term ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as elaborated by A.O. emphasizing repetitive transaction is applicable in the facts of appellant's case. I am also inclined with A.O. that appellant's claim of LTCG cannot be allowed on certain scrip as the same were claimed to be off market transaction without evidences of payment of security transaction Tax (STT). I am inclined with contention of appellant that as per circulars instructions of board and ratio of various case laws, an assessee is permitted to maintain two portfolio, one for business and other for investment. But, appellant failed to demonstrate that it maintained such two different distinct portfolio. As discussed above, the Demat account reflect different picture than transaction reflected in statement of income. In reference to principle of consistency has to be given preference, it has already been demonstrated that in earlier year no such specific view of investment was examined or accepted. In earlier year also, there are discrepancies as discussed for previous year. Appellant contended that there is no systematic activities in share transactions but as discussed in earlier para, appellant on day to day basis transacted in huge nos. of sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee subject to the credit on account of Security Transaction Tax paid. Still aggrieved by the order of the learned CIT(A), the assessee has preferred this appeal before the Tribunal. 8. We have heard the arguments of both the sides and also perused the relevant material available on record. The learned Counsel for the assessee has mainly relied on Circular No.6/2016 dated 29.02.2016 issued by the CBDT in which the guidelines have been provided for dealing with the issue as to whether the profit arising from the transactions in shares is to be assessed as business income or capital gain. He has contended that the Hon ble Gujarat High Court in the case of PCIT vs. Ramniwas Ramjivan Kasat, [2019] 410 ITR 540 (Guj.) as well as in the case of PCIT vs. Bhanuprasad D. Trivedi, [2017] 87 taxmann.com 137 (Guj.) has relied upon the CBDT Circular No.6/2016 dated 29.02.2016 to give relief to the assessee on a similar issue. However, as rightly pointed out by the learned DR, the benefit of impugned order having been passed by the learned CIT(A) on 16.09.2014, Circular issued by the CBDT on 29.02.2016 (supra) and the judgments rendered by the Hon ble jurisdictional High Court su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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