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TMI Blog2013 (11) TMI 1660X X X X Extracts X X X X X X X X Extracts X X X X ..... make investment at their own discretion, that the investment made by the assessee through PMS was meant for maximisation of wealth and not with a view to purchase/sale of shares, that department had not disputed the fact that portfolio managers had the sale and absolute discretion to make investment for and on behalf of the assessee, that assessee had no role to play with regard to making of investment,that the very nature of PMS was that the investment made by the assessee could not be said to be scheme of trading of shares and stock, that the profit was to be assessed under the head Capital Gains. Considering the above, we are of the opinion that FAA was not justified in holding that share transactions carried out by the assessee through ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and circumstances of the case the Learned Commissioner of Income Tax (Appeals) ought not to have directed to treat the Long Term Capital Gains from PMS as Assessing Officer has allowed the claim of LTCG as exempt. Such enhancement is unjust and bad in law as no opportunity was given before passing such order. Appellant prays that such enhancement be deleted. 2) The Assessee craves leave to add, alter and delete any of the above grounds. 2.Assessee, an individual, filed her return of income on 29.07.2008 declaring total income 29.19 lacs. Assessment was finalised on 23.12.2010 determining the total income of the assessee at ₹ 29,19,820/-.During the course of assessment proceedings, Assessing Officer (AO) found that the assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of earned income from long term capital appreciation, that under these schemes investment activities were done by the portfolio managers, that investment through PMS and through mutual funds were similar, that PMS fund could not be treated as business income. Assessee also enclosed the agreement entered by her with the PMS managers and relied upon the decision of ITAT, Mumbai delivered in the case of Radha Birju Patel (ITA No. 5382/Mum/2009 AY 2006-07 dated 30.11.2010 and Smt Nalini Navin Bhagwati (ITA No.53/Mum/2010 AY 2006-07 dated 05.08.2011.It was further argued that in the earlier orders PMS income had been treated as capital gains, that she had earned LTCG amounting to ₹ 10.89 lacs that were exempt u/s 10 of the Act, that assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise profits that it could not be said that the intention was to hold shares as investment. Finally, she upheld the order of the AO. She further directed the AO to treat all gains from STCG or LTCG as business income. She also held that provisions of sections 10 (38)and 111-A were not be applicable to profits derived from moneys placed with PMS. 2.3.Before us, Authorised Representative (AR) submitted that investment was made through the portfolio managers, that assessee had no control over the activities carried out by the portfolio managers, that basic ingredients of business were missing in the transactions under consideration. He referred to the cases of Manan Nalin Shah(ITA No.6166/Mum/2008 AY-2003-04dated 06. 07. 2012), Radha Birju Pat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh PMS was meant for maximisation of wealth and not with a view to purchase/sale of shares, that department had not disputed the fact that portfolio managers had the sale and absolute discretion to make investment for and on behalf of the assessee, that assessee had no role to play with regard to making of investment,that the very nature of PMS was that the investment made by the assessee could not be said to be scheme of trading of shares and stock, that the profit was to be assessed under the head Capital Gains.While passing the order, we have taken into consideration the order of the Delhi Tribunal referred above as well as the orders of the Pune Tribunal. Considering the above, we are of the opinion that FAA was not justified in holdin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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