TaxTMI 
TaxTMI 
2024 (5) TMI 949
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....onsidering the income of Rs. 86,88,690/- as income from Long Term Capital Gain, when no sale deed was submitted during the course of assessment proceedings and transfer of land is claimed on the basis of written agreement on stamp paper and power of attorney? 2. Originally this appeal of revenue/appellant was dismissed vide order dated 07.07.2023 on account of low tax effect. Subsequently, the revenue came in M/A No. 9/Ind/2020 claiming that the case was falling within exception in Para 10(c) of the CBDT Circular No. 3/2018 relating to low tax effect. Therefore, the revenue's appeal ought to be decided on merit instead of dismissing on low tax effect. The revenue's claim was found correct; therefore the impugned M/A was allowed; the original order dated 07.07.2023 was re-called and the appeal was restored with original number. This way, the present appeal has again come for hearing before this Bench. 3. Brief facts of the case are that the assessee-individual originally submitted return of relevant AY 2010-11 declaring a total income of Rs. 1,57,36,930/- which was subjected to scrutiny assessment u/s 143(3) and the AO completed assessment vide order dated 18.03.2013 accepting th....
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....ilable with this office and the written submission of the assessee, many transactions of shares were found to be intra-day sales and purchases of shares and thus constituting business income. Therefore, an amount of Rs. 57,28,867/- has been claimed under wrong head as Short-Term Capital Gain and same is treated as business income for calculation of the total income of the assessee and the tax thereon." 7. The CIT(A) has dealt this issue in Para No. 8 of his order as under: "8. Ground No. 2 is against treating short term capital gain of Rs. 57,28,867/- as business income. 8.1 The AO has noted in the reasons recorded u/s 147 and assessment order that many transactions of shares were found to be intraday sale and purchase of shares which constituted business income. Therefore, the short term capital gain of Rs. 57,28,867/- was treated as business income as against short term capital gain. 8.2 The appellant had submitted before the AO that out of his total short term capital gain only Rs. 7,52,383/- was on account of intraday sale and purchase of shares. However, the AO was not convinced and he treated the entire short term capital gain as business income. 8.3 During appea....
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....rn, the assessee did not segregate 'intra-day transactions' from 'delivery-based transactions' and made a consolidated statement, filed at Page No. 117-127 of the Paper-Book. Although such consolidated statement itself shows the Dy. CIT, 1(1), Bhopal vs. Shri Prakash Bhojwani, Bhopal dates of purchase, dates of sales, etc. from which 'intra-day transactions' could be easily picked up but the assessee's belief was since the 'intra-day transactions' were done to protect 'investment porfolio', the income generated therefrom was also in the nature of short-term capital gain u/s 111A. But, when the AO questioned this point during assessment-proceeding, the assessee made a separate statement of 'intra-day transactions' and submitted to AO, copy filed at Page No. 142-145 of Paper- Book. From this statement of 'intra-day transactions', it is easily discernible that an income of Rs. 7,52,383/- was only earned and therefore the assessee clearly intimated this fact to AO without any hesitation. Therefore, the AO should have ideally assessed only income to the extent of Rs. 7,52,383/- as business income and remaining income as short-term capital gain u/s 111A. But the AO made a bald statement ....
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....ivery based transactions in the present case, should be treated as those in the nature of investment transactions and the profit received therefrom should be treated either as short-term or, as the case may be, long-term capital gain, depending upon the period of the holding. A finding of fact has been arrived at by the Tribunal as regards the existence of two distinct types of transactions namely, those by way of investment on one hand and those for the purposes of business on the other hand. Question (a) above, does not raise any substantial question of law." Further reliance is placed on CIT Vs. Merlin Holding Pvt. Ltd. 375 ITR 118 (Cal HC) taken into account by CIT(A). 9. We have considered rival submissions of both sides and perused the orders of lower-authorities, as re-produced earlier, in the light of documents held in Paper-Book to which our attention has been drawn. After a careful consideration, we find that before AO, the assessee filed segregated details of 'intra-day transactions' and admitted that an income of Rs. 7,52,383/- was only from those transactions. However, the AO over-looked specific details filed by assessee and went on to make a finding that there wer....
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....ure has not made any distinction on the basis of frequency of transaction. The benefit of short-term capital gain can be availed for any period of retention upto 12 months. Although a ceiling has been provided but there is no indication as regards the floor, which can be as little as one day. When that is the position in law and the investor has adduced proof to show that some transactions were intended to be business transaction, some transactions were intended to be by way of investment and some transactions were by way of speculation and the revenue has not been able to find fault from the evidence adduced then the mere fact that there were 1000 transactions in a year or the mere fact that the majority of the income was from the share dealing or that the Managing Director of the assessee is also a Managing Director of a firm of share brokers cannot have any decisive value. The question essentially is a question of fact. The CIT Appeal and the learned Tribunal have concurrently held against the views of the Assessing Officer. On the basis of the submissions made by the learned Advocate for the appellant, it is not possible to say that the views entertained by the CIT Appeal or th....
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....rm Capital Gain and same is treated as income from Other sources for calculation of the total income of the assessee and the tax thereon." 13. The CIT(A) has dealt this issue in Para No. 9 of his order as under: "9. Ground Nos. 3 and 5 are against treating long term capital gain on transfer of land of Rs. 86,88,960/- as income from other sources. 9.1 The appellant had shown long term capital gain on transfer of land of Rs. 86,88,960/-. This was accepted in the original assessment. In the re- assessment order, the AO has observed that the sale deed of the property was not produced during the assessment which was violation of provisions of section 50C of the Act and, therefore, the long term capital gain was wrongly claimed and the amount was treated as income from other sources. 9.2 The appellant has submitted that a land at Lalghati, Bhopal, was acquired by his father which was transferred in the name of his mother on father's death. The mother executed a will on 15.04.2006 and after her death on 23.12.2006, the land was transferred in the name of the assessee and his brothers. Subsequently, vide relinquishment deed dated 28.04.2009, the two brothers relinquished their in....
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....rcumstances of the case, it is held that the action of the AO in treating the long term capital gain as income from other sources was incorrect unjustified and arbitrary. The long term capital gain shown by the appellant on this transaction is to be assessed as such as against income from other sources. These grounds of appeal are therefore, allowed. " 14. Before us, Ld. DR for revenue submitted that there is no sale-deed of the impugned transaction, the assessee is claiming to have sold land on the basis of unregistered agreement. Therefore, the AO has rightly taxed the income declared by assessee as Income from Other Source there being absence of sale-deed. Per contra, Ld. AR for assessee submitted that the impugned land was initially acquired by assessee's father which got transferred to assessee's mother on death of father. After death of mother on 23.12.2006, the land came to the hands of assessee and his two brothers under mother's will. Thereafter, two brothers relinquished their shares in favour of assessee. This way, the assessee became full owner of land. Ultimately, the assessee sold land through an agreement accompanied by a power of attorney, received major part of c....