Court affirms Section 147 assessments, classifies share sale income as business income.

The court upheld the reopening of assessments under Section 147 and the classification of income from the sale of shares as business income. It found that the Assessing Officer had ample material to support the findings and that consistency in assessments across different years is not obligatory if the circumstances warrant different treatment. The court emphasized the need for tangible material to justify reopening assessments and the importance of considering the totality of circumstances in classifying income. The appeals were dismissed based on these conclusions.

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Issues Involved:
1. Legality of reopening the assessment under Section 147.
2. Classification of income from the sale of shares as "business income" versus "capital gains."
3. Availability of material or documents to justify the Tribunal's finding that the appellant is engaged in trading activity.
4. Justification of assessing similar income differently for different assessment years.
5. Tribunal's disregard for decisions of various High Courts without providing reasons.

Detailed Analysis:

1. Legality of Reopening the Assessment under Section 147:
The court examined the scope of the Assessing Officer's power under Section 147, which allows reopening an assessment if there is "reason to believe" that income has escaped assessment. The court cited precedents, including *Assistant Commissioner of Income Tax v Rajesh Jhaveri Stock Brokers P Ltd* and *Commissioner of Income Tax v Kelvinator of India Ltd*, to affirm that "reason to believe" requires tangible material and cannot be based on a mere change of opinion. The court concluded that reopening the assessment for the year 2006-07 was justified because the assessment for 2008-09 treated similar income as business income, providing sufficient material to believe that income for 2006-07 had escaped assessment.

2. Classification of Income from Sale of Shares:
The court referred to the principles laid down by the Apex Court in *Commissioner of Income Tax, Nagpur v Sutlej Cotton Mills Supply Agency Ltd* and other cases, emphasizing that the nature of the transaction (capital gain vs. business income) depends on the totality of circumstances. Factors such as the frequency of transactions, holding period, and the systematic and organized manner of trading were considered. The court noted that the assessee's activities indicated a trading nature rather than investment, thus justifying the classification of income as business income.

3. Availability of Material or Documents:
The court found that the Assessing Officer had sufficient material to justify the finding that the appellant was engaged in trading activity. The frequency of transactions, the short holding periods, and the infrastructure for trading supported the conclusion that the assessee was conducting a business in shares.

4. Justification of Different Assessments for Different Years:
The court rejected the argument that the Department should maintain consistency in assessments across different years. It cited *Dwarakadas Kesardeo Morarka v Commissioner of Income Tax*, stating that each year's assessment is independent and not bound by previous years' decisions. The court also noted that assessments for 2007-08 and 2009-2010, where losses were reported, were not reopened because no income chargeable to tax had escaped assessment.

5. Tribunal's Disregard for High Court Decisions:
The court dismissed the contention that the Tribunal disregarded decisions of various High Courts without providing reasons. The court emphasized that the Tribunal's findings were based on the specific facts and circumstances of the case, which were consistent with the legal principles and precedents cited.

Conclusion:
The appeals were dismissed, with the court upholding the reopening of assessments under Section 147 and the classification of income from the sale of shares as business income. The court found that the Assessing Officer had sufficient material to justify the findings and that the Department's approach was consistent with legal principles. The court also clarified that consistency in assessments across different years is not mandatory if the facts and circumstances justify a different treatment.

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