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TMI Blog2013 (8) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... which the assessee in T.C.(A)No.203 of 2012 is the Managing Director. Since the facts are common, it is suffice to refer to the facts as it existed in T.C.(A)No.203 of 2012. The assessment year under consideration is 2005-06. 3. It is seen from the facts herein that the assessee is a trader in shares. The assessee was trading in two segments in stock exchange viz., cash segment and Future and Options (F&O) segment. Admittedly, the assessee had two different portfolios one as investment and another as stock-in-trade. While profits from trading in cash market upto 30.9.2004 was offered to tax under the head 'business', similar gains subsequent to that date was offered to tax under the head 'short term capital gains'. The Assessing Officer viewed that considering the introduction of Section 111A of the Income Tax Act, brought into the statute with effect from 01.10.2004 offering concessional rates of tax at the rate of 10% on short term capital gains arising out of sale of shares and securities through stock exchange on which security transaction tax has been paid, the assessee had accounted all its profits trading in cash segment after 01.10.2004 as short term capital gain and paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on appeal before the Commissioner of Income Tax (Appeals), who, after going through the facts found, agreed with the assessee. For the completion of narration, it is suffice to point out that the Commissioner of Income Tax (Appeals) found the reasoning of the Assessing Officer as incorrect factually and that contrary to the observation of the Assessing Officer that the shares were held between 2 and 45 days, the assessee had held many shares exceeding 45 days upto 12 months. The Commissioner of Income Tax (Appeals) also pointed out that borrowing of funds was for the purpose of F & O business and not for the purpose of investment. The shares purchased as investment had also been kept in the investment account and not in the stock-in-trade (inventory) account. Thus, on an analysis of facts, the Commissioner of Income Tax (Appeals) agreed with the assessee and allowed the appeal. 7. Aggrieved by this, the Revenue went on appeal before the Income Tax Appellate Tribunal contending that the Commissioner of Income Tax (Appeals) had ignored the findings of the Assessing Officer and that the assessee had sold shares in as many as 106 companies, bought over 62 lakhs shares and sold them be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted the rectification petition. Admittedly, as against the order passed in the miscellaneous petition seeking rectification, the assessee did not file any appeal before this Court. 10. Leaving that aside, the fact remains that the assessee had challenged the order of the Income Tax Appellate Tribunal passed in the main appeal contending that when the Tribunal had sought to restore the assessment, it committed a serious error in taking the view that the facts as stated in the assessment order remained undisputed. 11. Learned senior counsel appearing for the appellants pointed out that when the assessee had raised specific grounds before the Commissioner of Income Tax (Appeals), who found in favour of the assessee, it is totally incorrect on the part of the Tribunal to hold that the assessee had not disputed the facts as found in the assessment order. Thus when the Revenue had gone on appeal before the Income Tax Appellate Tribunal, which is a final fact finding authority, it ought to have decided the points raised by the assessee in the appeal filed before the Commissioner of Income Tax (Appeals), which was a subject matter of appeal before the Tribunal at the instance of the Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals) was without any material, nothing prevented the Tribunal from going into those facts and the findings to arrive at a finding based on the records. But all that the Tribunal observed was as follows: "5. We have considered the rival submissions. A perusal of the assessment order, more specifically para 5, clearly brings out the nature of transactions. These facts as brought out by the Assessing Officer remained undisputed." 17. As far as the observation of the Tribunal is concerned, the only fact admitted by the assessee was that it had two different portfolios, being trading in shares and investments. The dispute raised by the assessee related to the transactions falling under both the heads. When the specific case of the assessee was that the income arising from the sale of shares could not be treated as income from business, in fairness to the claim of the assessee, the Tribunal ought to have considered the same in detail to arrive at a factual finding. 18. As far as the present case is concerned, the Tribunal has not adjudicated on the issue in the light of the materials projected by the assessee in support of his case. 19. In similar situation, in the decision rep ..... X X X X Extracts X X X X X X X X Extracts X X X X
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