Sumitra Gautam Trivedi, Thane vs Department Of Income Tax

ी जो ग दर संह, या यक सद य एवं ी संजय अरोड़ा, लेखा सद य के सम । BEFORE SHRI JOGINDER SINGH, JM AND SHRI SANJAY ARORA, AM

आयकर अपील सं./I.T.A. No. 2963/Mum/2012 ( नधारण वष / Assessment Year: 2006-07) Asst. CIT-3, Sumitra Gautam Trivedi 'Vardaan', Lower Gr. Floor, बनाम/ 501/B, Apolo Apartment, MIDC, Wagle Indl. Estate, Vs. Hiranandani Estate, G. B. Road, Thane Thane (W) - 400 607 थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. ABZPT 6379 H (अपीलाथ /Appellant) : ( यथ / Respondent)

अपीलाथ क ओर से / Appellant by : Shri Neil Philip

यथ क ओर से/Respondent by : Dr. K. Shivaram Shri Ajay R. Singh

सनु वाई क तार ख / : 05.01.2015 Date of Hearing घोषणा क तार ख / : 08.01.2015 Date of Pronouncement आदे श / O R D E R Per Sanjay Arora, A. M.:

This is an Appeal by the Revenue directed against the Order by the Commissioner of Income Tax (Appeals)-I, Thane ('CIT(A)' for short) dated 24.01.2012, allowing the assessee's appeal contesting its assessment u/s.143(3) of the Income Tax Act, 1961 ('the Act' hereinafter) for the assessment year (A.Y.) 2006-07.

2. The issue arising in the instant appeal is the treatment of the profits and gains on the purchase and sale of shares, earned at Rs.27,35,451/- for the year. While the assessee has returned it as short term capital gain (STCG), the Revenue insists on its being the assessee's business income, assessable u/s.28.

3. We have heard the parties, and perused the material on record.

2 ITA No. 2963/Mum/2012 (A.Y. 2006-07) Asst. CIT vs. Sumitra Gautam Trivedi The matter, it may be appreciated, is purely factual. The Assessing Officer (A.O.) has, and we must appreciate his efforts, taken pains to, relying on a host of decisions, bring forth the correct position of law. The matter cannot depend solely upon one particular fact, or merely on or by counting the number of facts and circumstances, pro and con, or upon application of any abstract rule, principle or formula, but must depend upon the total impression and effect of all the relevant facts and circumstances established in a particular case. In fact, repetition or continuity of the similar transactions is not necessary to constitute a transaction as an adventure in the nature of trade. However, the same can at best form a prelude or a preface to his factual analysis, which has to be of the facts and circumstances of the case, and which we find as absent; there being no reference thereto in his order. Though the opening words of the concluding para 6 of his order reads as under:

'6. All the facts mentioned above clearly reflect the intention of the assessee to enter into an adventure of purchase and sale of shares as trade. The magnitude of transactions of purchase and sales of shares is very high.......', we observe that the A.O. has in the preceding paras only discussed the law in the matter, which we have sought to delineate hereinbefore. The ld. CIT(A), on the other hand, held that the frequency and volume of transactions is in favour of the appellant. He was, however, moved principally by the fact that the A.O. had himself considered the gain (Rs.21,93,928/-) arising on the sale of the shares, held for over 12 months, as long term capital gain (LTCG), proving the intent of holding the shares as investment. The gain, therefore, where the holding of the shares falls below 12 months, should qualify to be STCG. The assessee's investments, on which she had returned the impugned gain, spans over 16 companies, and which could not be considered as large by any standard. In other words, the said treatment would in his view qualify the assessee to be an investor qua the said shares.

Though, in our view, the ld. CIT(A) was not correct in being guided solely by the said fact, which no doubt reflects an inconsistency on the part of the Revenue (and which no doubt he is competent to cause to remove or rectify), there is before us no factual basis to the Revenue's appeal. As clarified earlier, the assessee's 3 ITA No. 2963/Mum/2012 (A.Y. 2006-07) Asst. CIT vs. Sumitra Gautam Trivedi investment (which is self financed) spreads over 16 companies, and which could not be considered as large. Again, as further clarified by the ld. AR, the bulk (94%) of the STCG, i.e., at Rs.225.66 lacs, is on shares held for more than 30 days (PB pg.2). The assessee's earning by way of dividend, at Rs.2,17,085/-, also cannot be considered as minimal. In view of the foregoing, our agreement with the position of law, as sought to be clarified by the A.O. through a host of decisions by the higher courts of law, notwithstanding, we are unable to find any basis to support the A.O.'s findings. The findings by the ld. CIT(A) though, again, not extensive, weigh in favour of the assessee, who has, to his credit, furnished all the relevant details before the authorities below.

In the given facts and circumstances of the case, we are inclined to uphold the impugned order. We decide accordingly.

4. In the result, the Revenue's appeal is dismissed.

प रणामतः राज व क अपील खा रज क जाती है ।

Order pronounced in the open court on January 08, 2015 Sd/- Sd/-

(Joginder Singh) (Sanjay Arora) या यक सद य / Judicial Member लेखा सद य / Accountant Member मंब ु ई Mumbai; दनांक Dated : 08.01.2015 व. न.स./Roshani, Sr. PS

आदे श क त ल प अ े षत/Copy of the Order forwarded to :

1. अपीलाथ / The Appellant

2. यथ / The Respondent

3. आयकर आयु त(अपील) / The CIT(A)

4. आयकर आयु त / CIT - concerned

5. वभागीय त न ध, आयकर अपील य अ धकरण, मंब ु ई / DR, ITAT, Mumbai

6. गाड फाईल / Guard File आदे शानस ु ार/ BY ORDER,

उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील य अ धकरण, मंब ु ई / ITAT, Mumbai