2013 (9) TMI 1137 - AT - Income Tax

Income from sale of shares - income from short term capital gain OR Income from Business - Held that - AO accepted the short term capital gain offered by the assessee on sale of shares for the assessment year 2004-05 to 2006-07. We further note that even for the assessment year 2008-09 the AO accepted the claim of the assessee regarding short term capital gain. Thus it is clear that prior as well as subsequent assessment year to year under consideration the AO has accepted the claim of the assessee regarding short term capital gain arising from sale of shares. It has not been brought out on record as how the facts are different for the assessment year under consideration so that the rule of consistency should not be followed. - Decided in favour of assessee.

Summary

Issues Involved:
1. Treatment of income from sale of shares as short term capital gain or business income.

Analysis:
The appeal before the Appellate Tribunal ITAT Mumbai concerned the treatment of income from the sale of shares as short term capital gain or business income for the assessment year 2007-08. The Revenue challenged the order of the Commissioner of Income Tax (Appeals) regarding the categorization of income amounting to Rs. 23,36,824. The assessee had offered this income as short term capital gain, while the Assessing Officer treated it as business income. The CIT(A) noted that in previous years, the short term capital gain offered by the assessee had been accepted by the AO. Relying on a Tribunal decision in a similar case, the CIT(A) allowed the claim of the assessee.

During the hearing, the AR of the assessee pointed out that the claim of short term capital gain had been accepted by the AO for both earlier and subsequent assessment years. The AR referred to a Tribunal decision in favor of the assessee's wife in a similar case. The DR, however, relied on the Assessing Officer's order. The Tribunal observed that the AO had consistently accepted the claim of short term capital gain on the sale of shares for previous and subsequent assessment years. It was noted that there was no evidence to show any difference in facts for the current assessment year to warrant a departure from the rule of consistency.

The Tribunal referred to a decision by a Co-ordinate Bench in a similar case involving the wife of the assessee, where the principle of consistency was emphasized. The Tribunal upheld the decision of the CIT(A) as no error or illegality was found in the order. Consequently, the appeal of the revenue was dismissed, and the impugned order of the CIT(A) was upheld. The judgment was pronounced on September 13, 2013.