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TMI Blog2013 (7) TMI 474X X X X Extracts X X X X X X X X Extracts X X X X ..... me on account of speculative transactions out of the total business income offered by the assessee at ₹ 9,52,507/-. Therefore, the observations of the CIT(A) is that the assessee is not in the business of trading of shares is contradictory to the facts. Further, the CIT(A) has also observed that the assessee has not employed any person for the purchase of sale of the shares which is also apparently not correct because before the AO one Shri Jayesh Sangoi, Accountant of the assessee company appeared from time to time and participated in the assessment proceedings. Following the decision of New Jehangir Vakil Mills Co. Ltd. v. CIT (1963 (4) TMI 60 - SUPREME COURT) the acceptance of the claim for the earlier year would not operate resjudicata or estoppel on the Assessing Officer for deciding the issue for the year under consideration when the facts are not strictly identical. Accordingly set aside the impugned order of the CIT(A) and restore the order of the AO wherein the income arising from sale of shares has been rightly assessed as business income. Claim of LTCG and STCG - Held that:- There is no such category of 30 days provided in the provisions of Income Tax Act. Ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... G claimed by the assessee. 3.1 After considering the magnitude and frequency of transactions as well as the ratio of sales to purchases and the total holdings, the Assessing Officer held that the purchases have been made solely and exclusively with the intention to resale to earn profits and the assessee had no intention of holding the shares or otherwise enjoying or using the same. Hence, the Assessing Officer treated the gains arising from sale of share as business income instead of STCG claimed by the assessee. 3.2 On appeal, the Commissioner of Income Tax(Appeals) has allowed the claim of the assessee and directed the Assessing Officer to assess the income of Rs. 3,44,93,842/- arising from sale and purchase of shares as STCG. 4. Before us, the ld DR has referred the details of purchase and sale of shares during the year as given in the assessment order and submitted that in the majority of the transactions, the holding period is less than a week and even only one day which clearly shows that the intention of the assessee was not to hold the shares for earning the dividend income or appreciation in the value in due course of time but the assessee purchased the shares with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further submitted that the Commissioner of Income Tax (Appeals) has given the finding by considering incorrect facts regarding no employees employed by the assessee whereas in the assessment order, the Assessing Officer has recorded that the Accountant of the assessee attended the assessment proceedings on behalf of the assessee. Therefore, the assessee employed an Accountant which has not been disputed. He has further submitted that the Commissioner of Income Tax (Appeals) has observed that the assessee was not in the business of share trading; whereas the assessee is carrying out speculative transactions and also offered income from profit on speculative transactions. Thus, the finding of the Commissioner of Income Tax (Appeals) is contradictory to the facts. 4.2 On the other hand, the ld AR of the assessee has submitted that the Commissioner of Income Tax (Appeals) has recorded the relevant facts and aspects of the case that the assessee has disclosed the shares as investment and not as stock-in-trade for the Assessment Year 2005-06. The LTCG and STCG disclosed by the assessee were accepted by the Assessing Officer. The entire STCG is on purchase and sale of 41 scrips only on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 683858 26.10.06 798786 114928 7 days Apollo Hospital 09.11.06 2000 966302 10.11.06 1073547 107245 1 day Aurobinda Pharma 22.05.06 1285 675485 24.05.06 768922 93437 2 days Aurobinda Pharma 21.04.06 1905 1243696 27.04.06 1394908 151212 6 days Aurobinda Pharma 21.04.06 1905 1243696 27.04.06 1394908 151212 6 days Axon Infotech 12.07.06 2025 98047 02.11.06 300733 202686 113 days Axon Infotech 03.07.06 20000 999735 29.09.06 3062400 2062665 88 days Axon Infotech 06.07.06 10000 502130 06.10.06 1579800 1077670 92 days Axon Infotech 12.07.06 6000 290512 26.10.06 883560 593048 106 days Axon Infotech 12.07.06 5000 242096 30.10.06 737250 495154 110 days Axon Infotech 12.07.06 2500 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hinduja TMT 21.03.07 5800 3149531 22.03.07 3529448 379917 1 day IFCI 19.07.06 12920 100518 12.03.07 335016 234498 236 days IFCI 19.07.06 37080 288482 13.03.07 954068 665586 237 days Ind. Bank Merchant 12.09.06 1000 30175 12.01.07 190700 160525 122 days Ind. Bank Merchant 18.09.06 5000 15025 23.01.07 120600 105575 127 days Ind. Bank Merchant 16.09.06 2500 75125 16.01.07 500750 425625 122 days Ind. Bank Merchant 14.09.06 1000 30225 16.01.07 200300 170075 124 days Ind. Bank Merchant 14.09.06 1500 44725 16.01.07 300450 255725 124 days Ind. Bank Merchant 12.09.06 1000 30175 10.01.07 186400 156225 120 days Ind. Bank Merchant 13.09.06 3000 90862 12.01.07 572100 481238 121 days ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rang 16.06.06 1000 23550 16.01.07 163760 140210 214 days Shree Bajrang 06.01.07 2000 462440 09.02.07 135140 -327300 34 days Shree Bajrang 20.06.06 4000 95200 09.02.07 270280 175080 234 days Shree Bajrang 20.06.06 4500 107100 24.01.07 627840 520740 218 days Shree Bajrang 16.06.06 2000 47100 01.012.06 423600 376500 138 days Shree Bajrang 16.06.06 300 7065 02.01.07 54030 46965 200 days Shree Bajrang 20.06.06 10000 238000 29.01.07 1596200 1358200 223 days Shree Bajrang 16.06.06 12000 282600 11.12.06 2442120 2159520 177 days Shree Bajrang 16.06.06 2000 47100 15.12.06 414620 367520 181 days Shree Bajrang 16.06.06 700 16485 06.12.06 147210 130725 172 days Shree Bajrang (Bon) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions carried on 42 occasion were with the intention to hold these shares for enjoying of the ownership and yielding of dividend income. Further, the assessee is also engaged in the speculative transactions and offered the income of Rs. 4,70.553/ as business income on account of speculative transactions out of the total business income offered by the assessee at Rs 9,52,507/-. Therefore, the observations of the CIT(A) is that the assessee is not in the business of trading of shares is contradictory to the facts. Further, the CIT(A) has also observed that the assessee has not employed any person for the purchase of sale of the shares which is also apparently not correct because before the Assessing Officer one Shri Jayesh Sangoi, Accountant of the assessee company appeared from time to time and participated in the assessment proceedings. 5.2 The assessee s case is mainly based on the plea that the claim of LTCG and STCG was accepted by the Assessing Officer in the AY 2005-06 and 2006-07. Therefore, the Assessing Officer cannot deny the same in the year under consideration. The CIT(A) has also given much emphasis on this point and relied upon the decision of this Tribunal as well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rule of resjudicata or estoppel as held by the Hon ble Supreme court in the case of New Jehangir Vakil Mills Co. Ltd. (supra) at page 143 144 as under: On the principle stated above, it seems to us that it was open to the taxing authorities to consider the position of the assessee in 1943 for the purpose of determining how the gains made in 1944 should be computed, even though the subject of the assessment proceedings was the computation of the profits made in 1944. The circumstance that in an earlier assessment relating to 1943, the assessee was treated as an investor would not in our opinion estop the assessing authorities from considering, for the purpose of computation of the profits of 1944, as to when the trading activity of the assessee in shares began. The assessing authorities found that it began in 1943. On that finding the profits were correctly computed and the answer given by the High Court to the question of the computation of the profits was correctly given. 5.5 The question before the Hon ble Supreme Court comprises the Bench of three Judges, was whether there was any evidence to justify the judgement of the Tribunal and confirmation of the Hon ble High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transaction in shares held for more than 30 days were treated by the Assessing Officer as STCG. Thus, the Assessing Officer has assessed the STCG on sale of shares at Rs.1,08,74,670/- in regard to the transaction where holding period is more than 30 days and the balance of the income of Rs. 25,88,046/- arising from sale of shares where holding period was less than 30 days was treated as business income. The CIT(A) confirmed the action of the Assessing Officer. 8. We have heard the ld AR as well as the ld DR and considered the relevant material on record. At the outset we observe that there is no such category of 30 days provided in the provisions of Income Tax Act. Section 2(42A) defined the short term capital asset as capital asset held by the assessee for not more than 12 months in the case of shares and securities. Further, section 2(42B) defines the STCG means the capital gain arising from transfer of STC asset. Therefore, the statute prescribed the category for treating the capital asset either as LTCG or STCG on the basis of holding period of 12 months. 8.1 Even otherwise, when the assessee has not bifurcated its portfolios on the basis of holding period, then 30 days ho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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