2014 (10) TMI 76 - HC - Income Tax

Nature of investment income Trader of shares or not Held that - Assessee had declared long-term capital gains and the stand of the assessee is that he was an investor as well as trader in shares - the Tribunal has not dealt with the contentions raised after examining and ascertaining the facts in detail - Answer or conclusion has been recorded without reference to facts of the particular year - The factual position can vary and can be materially different thus, the matter is to be remitted back to the Tribunal for adjudication Decided in favour of assessee.

Summary

Issues:
1. Whether the Income Tax Appellate Tribunal was right in dismissing the appeal of the appellant-assessee for assessment years 2007-08 and 2008-09?
2. Whether the appellant-assessee should be treated as a trader of shares in all the assessment years without reference to the factual matrix?

Analysis:
1. The High Court considered the appeal concerning assessment years 2007-08 and 2008-09. The Tribunal's order for these years did not delve into the specific factual details related to the appellant's transactions. The Assessing Officer and the Commissioner of Income Tax (Appeals) merely followed previous orders without a comprehensive analysis. The appellant argued that they were both an investor and a trader in shares, declaring long-term capital gains. The Court found that the Tribunal's decision lacked a detailed examination of the facts for the specific years in question, leading to a conclusion without a proper factual basis. Therefore, the Court held in favor of the appellant-assessee and ordered a remand for further examination of the contentions raised.

2. The Tribunal's order did not provide a detailed factual analysis for the assessment years 2007-08 and 2008-09, merely stating that the appellant should be treated as a trader in shares based on the frequency of transactions. However, the Court noted that the Tribunal failed to consider the varying factual positions and the material differences that could exist in different years. The appellant's assertion of being both an investor and a trader in shares, particularly declaring long-term capital gains, was not adequately addressed. Consequently, the Court held that the Tribunal's decision lacked a proper factual foundation and ordered a remand for further examination based on the specific facts of the years in question.