TMI Blog2023 (8) TMI 1344X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner in the Return of Income together with the audited accounts produced on record along with the return filed by the assessee. AO has allowed the Long Term Capital Gains and Short Term Capital Gains claimed by the assessee considering the sell of the Government Securities as investment and not stock-in-trade. Therefore, the reasons recorded by the respondent is mere change of opinion in the facts of the case. As decided in case of Kelvinator of India [ 2010 (1) TMI 11 - SUPREME COURT] that AO has no power to review, he has only power to re-assess and mere change of opinion cannot be the reason to reopen. Decided in favour of assessee. - HONOURABLE MR. JUSTICE BIREN VAISHNAV AND HONOURABLE MR. JUSTICE BHARGAV D. KARIA Appearance: For The Petitioner(S) No. 1 : Mr Sn Divatia (1378) For The Respondent(S) No. 1 : Mr. Varun K.Patel (3802) ORAL JUDGMENT (PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) Heard learned advocate Mr. S.N. Divatia for the petitioner and learned Senior Standing Counsel Mr. Varun K. Patel for the respondent. 1. Rule, returnable forthwith. Learned Senior Standing Counsel Mr. Varun K. Patel waives service of no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gains of Rs. 1,29,01,250/- and paid tax @ 30% and remaining amount of Rs. 82,75,250/-taken a long-term capital gain (LTCG) and the assessee calculated LTCG considering index value of investment and offered income of Rs. 24,82,750 and paid tax of Rs. 2,48,275 (@ 10%), It is seen that the assesses had treated LTCG from sale Government bonds were treated as capital gain. Since these investments were made by the bank as a part of their business activities, gains from such activities are to be treated as business income. This was also clarified by Circular No. 665 of the CBDT dated 5.10.1993. This has resulted in escaped assessment of Rs. 82,75,250/- under business income. 3. Analysis of information collected/received: Under Section 28 of the Income Tax Act, all profit and gains from any business or profession is to be chargeable to tax under the head Profits and gains of business or profession. Further, as per section 6 read with section 5(b) and (c) Banking Regulation Act and as per the guideline issued by the Reserve Bank of India, Investment activities is the normal banking activity and should be treated as banking Stock in trade. Hence, any gain or loss on account of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the applicability of the decision of the Hon ble Apex Court in case of Vijaya Bank Limited Versus CIT reported in (1991) 187 ITR 541 (SC) is clarified and explained which reads as under : 3. The Board has reconsidered the treatment to be accorded to securities held by banks. In the case of Vijaya Bank Ltd. (supra), the Supreme Court considered the issue whether, in a case where the assessee purchases securities at a price determined with reference to their actual value as well as the interest accrued thereon till the date of purchase, the entire price paid for them would be in the nature of capital outlay or whether the interest portion could be claimed as a revenue expenditure. It was in this context that the Supreme Court held that whatever was the consideration which prompted the assessee to purchase securities, the price paid for them was in the nature of capital outlay and no part of it could be set off as expenditure against income accruing on those securities. The Court was not directly concerned with the issue whether the securities form part of stock-in-trade or capital assets. 4. The question whether a particular item of investment in securities constitute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961. 4.8. In support of his submissions, learned advocate Mr. Divatiya referred to and relied upon the decision of the Apex Court in case of the Commissioner of Income Tax versus Kelvinator of India Limited reported in (2010) 320 ITR 561 (SC) to submit that there is change of opinion by the respondent- Assessing Officer for issuance of the impugned notice under Section 148 of the Act, 1961 which cannot be per say the reason for reassessment. 5.1. On the other hand, learned Senior Standing Counsel Mr. Varun K. Patel appearing for the respondent submitted that the petitioner has an alternative efficacious remedy to challenge the assessment order which may be passed pursuant to the impugned notice issued under Section 148 of the Act, 1961 by way of an Appeal before the CIT (Appeals) and the petitioner can raise all the contentions which are raised before this Court by challenging the impugned notice issued under Section 148 of the Act, 1961. 5.2. It was also submitted that this Court may not consider the case of the petitioner on merits when the case of the petitioner is sought to be reopened within the period of four years from the Assessment Year as the impugned notic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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