TaxTMI 
TaxTMI 
2022 (11) TMI 1111
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd the appeal has in fact been filed on 10.06.2019. From the perusal of the petition furnished by the Ld. AO, it is noted that the delay occurred due to the procedural compliances and occupancies in time barring assessment proceedings by the concerned AO, all of which have been explained chronologically in the petition. Considering the administrative procedural requirement and occupancy of the Ld. AO in time barring assessment orders, we find it appropriate to condone the delay by taking justice oriented approach and admit the appeal for its adjudication. 4. Brief facts of the case are that assessee is engaged in trading and investment of shares and securities. He filed the return of income on 19.09.2015 reporting total income of Rs.64,72,990/-. In the P&L Account for the year under consideration, assessee reported the following main incomes as under: (i) Dividend Rs.2,76,18,020/-; (ii) Long term capital gain on shares Rs.18,36,66,805/-; (iii) Interest on fixed deposits Rs.1,38,21,024/-; (iv) Loss from share trading Rs.62,61,189/-. 4.1. Assessee claimed dividend income and LTCG on shares as exempt in the return. The claim of exemption comprised of Rs.18,36,66,805/- toward....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Ld. CIT(A). 4.3. Before the Ld. CIT(A) assessee made a detailed and elaborated submission on various aspects of the case to justify its claim. The detailed written submission furnished by the assessee is reproduced in the order of Ld. CIT(A) in para 3. It was submitted by the assessee that Ld. AO was not able to bring on record any material in support of his allegation that the distinction maintained by the assessee between the three DMAT accounts was artificial or a make belief arrangement. 4.4. On the aspect of intention of the assessee it was submitted that since 2001-02 when system of maintaining share portfolio in dematerialised (DMAT) format was introduced in India, assessee maintained DMAT account numbers being DP Client ID 00021631 with CDSL through its depository participant CDEPL in respect of his 'trading transactions' in shares. Assessee also maintained another DMAT account bearing client ID No. 00021644 with CDSL with its depository participant CDEPL in respect of "investment in shares'. It was submitted that whenever assessee purchased the shares for trading purpose, delivery of the shares was taken in trading DMAT account bearing No. 00021631. On the other hand, wh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ned about the nature of assessee's holding of shares. Broker is obliged to conduct the transactions and prepare the relevant documentation strictly in conformity with stock exchange regulations. Broker is required to issue contract notes in conformity with the regulations of the relevant stock exchange as approved by SEBI. It was thus submitted that prior to 2014, brokers were permitted to issue multiple contract notes everyday which were issued in respect of transactions conducted by the broker on clients' account in different segments such as capital market or F&O. An option was available to either issue consolidated contract note or separate contract note. Reference was made to the circular no. 173/2013 dated 18.11.2013 issued by NSE according to which, it was decided to have a common contract note across all segments and across all exchanges. The said circular required all the members to issue common contract note in the prescribed format from 01.04.2014. Assessee thus submitted that the common contract note containing assessee's transactions across all segments were issued by C D Equifinance Pvt. Ltd. (CDEFPL) because of the mandatory regulations of the stock exchanges. 4.9. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hat the method of inventory adopted by the assessee was different in case of investment and trading stock. The Commissioner also referred to the distinction between the share trading business and the investment of the assessee having been accepted by the Assessing Officer in previous years. On facts, the Commissioner (Appeals) concluded that even the Assessing Officer did not believe that the assessee was a dealer in shares in so far as the shares were held in the books of the assessee as investment. Since the enquiry conducted by the Commissioner (Appeals) was purely on facts and the answer arrived at by the Commissioner was that on the basis of the books of account and the facts as relevant, the sum of about Rs.3.67 crore could not be regarded as a business income, there is no serious question of law that has been raised by the Revenue herein. Further, the Appellate Tribunal reappraised the findings on facts rendered by the Commissioner (Appeals) and endorsed the view taken by the Commissioner (Appeals). In view of the concurrent finding on facts by the two for a below and there being no substantial question of law raised in such regard, ITAT No. 214 of 2016 along with GA N....
X X X X Extracts X X X X
X X X X Extracts X X X X
....263 of the Income Tax Act, 1961 is the verbatim copy of the reasons recorded by the Ld. AO u/s147 of the Act. It has also been established that during re-assessment proceedings u/s147 of the Act, the Ld. AO had done detailed enquiry and the assessee had duly explained that separate portfolios for trading and investments were maintained by the assessee. The transactions were carried out in separate D-mat accounts and shares were received in the separate d-mat account. Therefore, there was no question of any manipulation. After duly verifying the explanations of the assessee, the Ld. AO accepted/assessed the assessee's returned income. However, subsequently on the proposal of the Ld.AO, the Ld.PCIT, without applying his mind to the above factual position, exercised his revision jurisdiction u/s 263 of the Act. The Ld. PCIT has not pointed out any discrepancy/error in the reply/explanation so submitted by the assessee during the re-assessment proceedings, which was part of the assessment records. 17. In this case, the Ld. PCIT has resorted to the revision proceedings u/s. 263 of the Act in a mechanical manner on the basis of the proposal of the Ld.AO. It has not been pointed out as ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... unless there is a change in factual matrix permeating through the orders or legal provisions of the Act. It was submitted that Ld. CIT(A) has given a detailed meritorious findings on all the aspects of the case as noted in para 4 of the said order and held that AO should have assessed the income at Rs.18,36,89,703/- as also the gain of Rs.22,898/- under the head "Capital Gains" and not "Profits and gains of Business". Aggrieved, the department is in appeal before the Tribunal. 7. Ld. CIT, DR placed reliance on the order of the Ld. AO. Ld. Counsel for the assessee reiterated the submissions made before the Ld. CIT(A) and also referred to the reassessment orders passed u/s. 147 of the Act by the same Ld. AO for the preceding four years. He also referred to the decision of the Coordinate Bench of ITAT, Kolkata in assessee's own case against the order passed u/s. 263 of the Act for the same four preceding years and pointed out that both, in the reassessment as well as revisionary proceedings in the immediately preceding four years, returned income of the assessee has been accepted as the assessed income with no reclassification being done for the capital gains as reported by the asse....