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TMI Blog2013 (6) TMI 515X X X X Extracts X X X X X X X X Extracts X X X X ..... g in view of the fact that the assessee invested in shares, securities & units in the past years as well investments were made out of own funds. From the Balance Sheet as of 31st March 2002 & 2003 the assessee’s investments from own funds were Rs.93,30,065/- & Rs.1,39,92,543/- and in the assessments for the relevant period assessee was not regarded as dealer in shares. In the assessment years 2002-03 & 2003-04 the assessee earned dividend and capital losses on transfer of shares & units. In the Income Tax assessments for assessment years 2002-03 & 2003-04, the gains received on transfer of shares & units were assessed as capital gains and not as profits & gains of business. Thus AO is not justified in treating the assessee as dealer in shar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for and offered for tax, the assessee did not furnish any explanation or clarification. The assessee only submitted a copy of the royalty agreement between the assessee and M/s. Ritika Limited as per this agreement, there is no provision for payment of commission to the assessee. On appeal to the Ld. CIT(A), Ld. CIT(A) has deleted the same by observing as under:- I have considered the submission of the appellant and perused the assessment order. I have also gone through the Form No.16 issued by M/s. Ritika Limited. Since, the amount of commission is already included in the amount of salary disclosed by the appellant, I am of the opinion that there is no reason to make addition of Rs.4,85,888/- on that account. The Assessing Officer is di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12,661/- under the head income from business and profession . On appeal to the Ld. CIT(A), Ld. CIT(A) has treated the same as long term capital gains or short term capital gains as the case may be depending upon the period of holding after taking into consideration the various submissions by observing as under :- I have considered the submission of the appellant and perused the assessment order. During the year under consideration the appellant has disclosed short term capital gain of Rs.5,65,562/ and long term capital gain of Rs.2,55,471/- on account of sale and purchase of shares and units. However, AO. was of the opinion that the appellant was not an investor in shares and units but the trader thereof. The A.O. formed his opinion for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olio Management Scheme (PMS). Under the PMS; an individual investor places fund with the fund managers with a mandate to make and vary investments in shares, securities and units on behalf of the investor. Under the PMS once the funds are placed at the disposal of the fund manager ; thereafter all decisions relating to its investments and variation therein are taken by the Portfolio Manager on behalf of client. The appellant also entrusted the task of making investment of her savings into BNP Parivas Bank who invested the funds on behalf of the appellant in shares and units. Hence, the A.O. was not justified in observing that appellant has carried out the trading business in shares and units with the help of financial experts. Further, as m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts, the rule of consistency should be followed by the A.O. I find force in the submission of the appellant that she had invested her own capital under the PMS to make investment in shares and units etc. and all the decisions are taken by the Fund Managers. Hence, it cannot be said that the appellant was carrying out trading business in shares and securities with the help of financial experts. In the balance sheet, the appellant has always declared the investment at cost. During the course of appellate proceedings, the appellant has relied on various judicial pronouncements in support of her claim. In support of the above, he further relied on the following cases :- (i) CIT vs. Madan Gopal Radheylal [73 ITR 652] (SC) (ii) CIT vs. Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- Rs.1,39,92,543/- and in the assessments for the relevant period; assessee was not regarded as dealer in shares. In the assessment years 2002-03 2003-04 the assessee earned dividend of Rs.16,419/- Rs.23,652/- and capital losses on transfer of shares units were Rs.52,49,976/- Rs.5,11,788/- respectively. In the Income Tax assessments for assessment years 2002-03 2003-04, the gains received on transfer of shares units were assessed as capital gains and not as profits gains of business. Keeping in view of the fact that in the impugned order the Assessing Officer is not justified in treating the assessee as dealer in shares and securities. Therefore, we find no infirmity in the order of Ld. CIT(A) to be inferred with. Hence, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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