TaxTMI 
TaxTMI 
2016 (5) TMI 470
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.... the I.T. Rules, 1962. 3. On the facts and circumstances of the case, the Ld. Commissioner of Income tax (A) ought to have upheld the order of the Assessing Officer. 4. It is, therefore, prayed that the order of the Ld. Commissioner of Income tax (A) may be set-aside and that of the Assessing Officer be restored. 2. Briefly stated facts of the case are that assessee is an individual derives income from salary, income from business. He filed his return of income on 23.8.2008 through e-filing declaring total income at Rs. 1,93,12,540/-. The case was selected for scrutiny assessment under CASS. Notice u/s 143(2) of the Act was issued on 19.8.2009 and served upon the assessee. During the year under consideration assessee disclosed short term capital gain of Rs. 2,04,87,755/-, business loss at Rs. 14,64,380/- and speculation income of Rs. 87,595/-. The assessee also claimed exemption of dividend income of Rs. 11,598/- and gift of Rs. 10,005/-. During the course of assessment proceedings, assessee was issued show cause notice as to why the income derived on sale of shares amounting to Rs. 2,04,87,755/- shown as short term capital gain should not be treated as income ....
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....m capital gain in respect of 7/8 scrips only. Most of these scrips were purchased in the immediately preceding A.Y. i.e. A.Y. 2007-08. In the balance sheet of A.Y. 2007-08 i.e. F.Y. 2006-07 appellant has declared investments in the following shares: 1) HDFC Plating Rate Income Fund 2) Kotak Bond fund 3) Hindustan Unilever Ltd. 4) ICICI Bank Ltd. 5) Lok Housing Construction Ltd. 6) NTPC Ltd. 7) Parshwanath Developers Ltd. 8) Reliance Communication Ltd. 9) Tata Consultancy Services Ltd, Appellant has claimed short term capital gain against transactions of these scrips. Since purchase of these shares was declared by the appellant in his books of account as investment, accordingly sale proceeds in respect of these shares should be taxed as capital gain. 2.4 C.B.D.T. Circular was issued in thfe year 2007. Law on this issue has further evolved after issue of this circular. Hon'ble Mumbai High Court in the case of Gopal Purohit v/s. JC1T 209 SOT 117 and Hon'ble Lucknow ITAT in the case of Sarnath Infrastructure Pvt.Ltd. v/s. ACIT 122 TTJ 216 it is held that it is open to the assessee....
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.... 43,70,000/- and thereafter during the year under appeal these warrants were exchanged and balance 90% of the amount was paid for getting the shares transferred to the demat account. Source of the investment of 90% cost of the shares was from unsecured loan taken from his relatives. 9. Ld. AR also submitted that there are series of judgments as well as CBDT Circular which support the stand of an assessee and also allowed two portfolios simultaneously i.e. investment portfolio and trading portfolio and about the treatment of investment in the books of account as to whether they are shown as investment or stock in trade or both. Since the case of assessee falls in the line with circular of CBDT and factual circumstances which are very clear that investments held by assessee as on 31st March, 2007 were sold during the year and profits relating to these shares have been shares as short term capital gain and long term capital gain. 9.1 Ld.AR placed reliance on the decision of co-ordinate bench, Mumbai in the case of ACIT vs. Naishadh V. Vachharajani in ITA No.6429/Mum/2009 for Asst. Year 2006-07, vide order dated 25.2.2011. 10. We have heard the rival contentions and perused th....
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....uired by paying 10% of the cost of warrants. 12. We further find that co-ordinate bench Mumbai has adjudicated similar issue wherein assessee has shown income from long term capital gain and short term capital gain, speculation profit F&O trading and income from profession and held in favour of assessee by observing as under :- 4. We have heard Mr. S.K. Mohanty, learned DR on behalf of the Revenue and Mr. Pramod Kumar Parida, learned counsel for the assessee. 5. On a careful consideration of the facts and circumstances of the case, a perusal of the papers on record and the orders of the authorities below as well as the case laws cited, we hold as follows. 6. The assessee in this case has filed a paper book running into 47 pages. At page 10, the details of the shares which were sold and which gave rise to Long Term Capital gains, were listed out. A perusal of this list shows that in the case of Satyam Computers, the assessee held the shares from more than 12 years. In the case of Kitply Industries the shares were held from more than 10 years. In the case of Pidilite Industries and Radico Khaitan the shares were held for more than 13 years and 11 years. ....
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.... to the notice of the A.O. by letter dated 15.10.2008 that the shares on which long term capital gain was offered were held for more than 3-5 years and the same are shown as investment in the balance sheet, but the A.O. held that only some shares were held for more than a month and other shares were held for a very short period. Even in respect of short term capital gain, the appellant had already submitted before the A.O. they were held for at least 2-5 months and further submitted the details of demat account to prove this claim. But the A.O. merely held that the shares were held for very short period except very few shares which were held for more than a month. Thus, I find that the A.O. did not appreciate the facts of the case correctly. As seen from the details of long term capital gain working submitted by the appellant, some shares sere held even for more than 12 years. For eg. The appellant purchased shares of Satyam Computer in the year 1992 and the same were sold during this year after holding them for more than 12 years. Similarly, some other shares were held for more than 8 years and only shares of Mc.Dowell company were held for slightly more than a period of one year.....
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....en into consideration and the magnitude of the transaction does not alter the nature of transaction. Though the principle of res judicata does not apply to the income-tax proceedings as each year is an independent year of the assessment but in order to maintain consistency, it is a judicially accepted principle that same view should be adopted for the subsequent years, unless there is a material change in the facts. Their lordships of Hon'ble Supreme Court in the Radhasoami Satsang v CIT [1992] 193 ITR 321 have categorically held as under : "..Strictly speaking, res judicata does not apply to income-tax proceedings. Though, each assessment year being a unit, what was decided in one year might not apply in the following year, where a fundamental aspect permeating through different assessment years has been fond as a fact one way or the other and parties have allowed that position to be sustained by no challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year." The same view has been taken by the Hon'ble Delhi Court in CIT V. Neo Poly Pack (P) Ltd. [2000] 245 ITR 492. In the facts of the present case, ....