TaxTMI 
TaxTMI 
2015 (8) TMI 882
X X X X Extracts X X X X
X X X X Extracts X X X X
.... & purchase of shares as "Long Term Capital Gain" instead of 'business income' as assessed by the Assessing Officer." 3. Brief stated facts, giving rise to this appeal, are that the case was selected for scrutiny under CASS and a notice u/s 143(2) and another notice u/s 142(1) of the Income-tax Act (for short "the Act"), along with questionnaire was issued to the assessee on 1-7-2010. The AO finalized the assessment by observing that the alleged long term capital gain, earned on entire sale/ purchase of shares, deserved to be treated as 'business income' and, thus, he treated the same as 'business income' by rejecting the special tax treatment as per section 111(A), denying exemption u/s 10(38) of the Act. 3.1. Aggrieved, the assessee ca....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ncome'. Ld. DR vehemently contended that the impugned investment shown by the assessee was not actually an investment, but a wrong interpretation adopted by the assessee. Therefore, the action of the AO was correct which was wrongly demolished by the CIT(A). 5.2. Ld. DR parted his argument with the final submission that impugned order may be set aside by restoring that of the AO. 6. In reply to the above, ld. authorized representative of the assessee ("AR" in short), supported the impugned order of CIT(A) and submitted that the assessee company has earned dividend income during the year on shares purchased by it and since shares have been purchased under investment portfolio, therefore, the decrease in value as against cost has not been c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hares under the head 'investments' in the audited balance sheet and prepared in accordance with the provisions of Companies Act, 1956. The appellant had invested in the quoted shares only. The appellant has utilized its own funds and not borrowed funds for the purpose of acquiring the shares As on 31.03.2007 & 2008, the appellant company had reserve and surpluses of Rs. 16,30,95,849.20/- and Rs. 20,48,20,824.34/- respectively where as the investments as on 31.03.2007 and 31.03.208 were of Rs. 15,48,07,722.57/- and Rs. 19,39,93,223.13/- respectively. The appellant company has paid the interest of Rs. 14. 31 only during the year. The infrastructure of the appellant company IS also very small which represents the Investment activity ra....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Apex Court. 5.4. The appellant's case is further strengthened by the reliance placed on Gopal Purohit vs. JCIT (2009) 20 DTR 99 (Mumbai Tribunal). The Hon'ble High Court in the aforesaid case had held as under:- a) Whether, on the facts and circumstances of the case and in law, the Hon'bfe ITAT was justified in treating the income from sale of 7;59,003/- . shares of Rs. 5,00, 12,879/- as an income from short them capital gain and sale of 3,88,797 shares for Rs. 6,65,02,340/- as long term capital gain as against the "Income from business" assessed by the A O? b) Whether, on the facts and circumstances of the case and in law, the Hon 'ble ITAT was justified in holding that principle of consistency must be applied her....
X X X X Extracts X X X X
X X X X Extracts X X X X
....has observed in paragraph 8.1 of its judgment that the assessee has followed a consistent practice in regard to the nature of the activities, the manner of keeping records and the presentation of shares as investment at the end of the year, in all the years. The revenue submitted that a different view should be taken for the year under consideration, since the principle of resjudicata is not applicable to assessment proceedings The Tribunal correctly accepted the position, that the principle of res judicata is not attracted since each assessment year is separate in itself. The Tribunal held that there ought to be uniformity in treatment and consistency when the facts and circumstances are identical, particularly in the case of the assessee.....