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TMI Blog2012 (7) TMI 395X X X X Extracts X X X X X X X X Extracts X X X X ..... STCG shown by the assessee. (b) The ld. CIT (A), on the facts and in the circumstances of the case and in law, erred in not appreciating the factors like volume, frequency, period of holding as criterion to determine the nature of transactions. "2. The appellant prays that the order of the CIT (A) on the above grounds be set aside and that of the Assessment Order be restored. 2. The facts which revealed from the record are as under. The assessee is an individual. It is claimed that he is an 'investor' in the share. The assessee filed the return of income declaring total income of Rs. 5,47,57,201/- for the A.Y. 2006-07, which was selected for scrutiny by issuing notice u/s.143(2) of the Act. In his return of income the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e kept for reasonably long periods. The average period of holding is at least 160 days in case of short capital gains. "viii) Investment in shares bears character of active investment where one has to constantly monitor and take a call and made buy or decision. "ix) It is not correct to determine the nature of investment on the basis of simple arithmetic numbers based on total amount invested in shares. Again frequency of dealings by itself cannot be a measure of decision." 3. The A.O. has observed that the principle of res judicata is not applicable to the Income-tax proceedings and every assessment year is independent and stand taken by the Department in the earlier years is not necessarily binding on the A.O. The A.O. also rejected th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e immediately preceding year i.e. assessment year 2004-2005, the shares etc. were shown under the head 'Investment'. In one year prior to that also i.e. A.Y. 2003-2004 the shares were shown under the head 'Investment' in the Balance sheet. It can also be seen from these Balance Sheet for three years that there are no borrowed funds which have been deployed by the assessee for the purchase of shares. Except for capital, there is no other item of Loan on the liability side of the balance sheet. It is further observed that the assessment for the immediately preceding year was completed u/s.143(3). Copy of the assessment order dated 28.12.2006 for A.Y. 2004-05 has been placed at pages 47 onwards of the paper book. There is a categorical discuss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as shown as Short term capital gain which was not disturbed by the Revenue, though the assessments were made u/s.143(1). "4. The Mumbai bench of the Tribunal in Shri Gopal Purohit vs. JCIT in ITA No.4854/Mum/2008 vide its order dated 10.2.2009, a copy of which has been provided by the learned AR and is on record, has held that where the nature of activities, modus operandi of the assessee, manner of keeping records and presentation of shares as investment at the year end is same in all the years, there cannot be any reason as to why the claim made by the assessee for treating the profit on sale of shares held for lower period be not taken as taxable as head "short term capital gain". It has further been held in this case that there should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r orders have also been placed on record which have the same ratio decidendi. In view of this overwhelming position settled in favour of the assessee and the learned D.R. not bringing on record any contrary view, we hold that since in identical circumstances the Revenue authorities have accepted the profit arising from the sale of share as short term capital gain in the assessment made u/s.143(3), there is no reason why a different treatment be given in this year. It is true that res judicata is not applicable in the income tax proceedings, but at the same time we cannot brush aside the 'principle of consistency', which requires that when the facts and circumstances continue to remain the same, then there should not be any variation in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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