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TMI Blog2017 (4) TMI 300X X X X Extracts X X X X X X X X Extracts X X X X ..... the value at which it was transferred from the business stock. We, on noticing that the Tribunal did not really hold otherwise but had held against the assessee on the point of resjudicata, had formulated the above question. Nevertheless for the reasons aforesaid we answer the question suggested by the assessee in the affirmative and in its favour. In that regard the said circular dated 29th February, 2016 has no application because the assessee’s stand was not accepted by the Revenue - Decided in favour of the assessee. - ITA No. 1 of 2017 - - - Dated:- 4-4-2017 - Aniruddha Bose And Arindam Sinha, JJ. Mr. Sharma, Adv. for the Assessee Mr. Lodhe, Adv. for the Revenue ORDER Arindam Sinha, J. The assessee being aggrieved by order dated 27th November, 2015 passed by the Income Tax Appellate Tribunal, Kolkata A Bench, Kolkata, in ITA no.1279/KOL/2010 pertaining to the assessment year 2006-07 has preferred this appeal. The substantial question of law suggested by the assessee is as follows:- Whether on the facts and circumstances of the case the Tribunal erred in affirming the order of the AO disregarding the conversion of the trading shares into investm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its stock-in-trade and not investment. Consequently the profit arising from the sale of the said shares, in our opinion, is chargeable to tax in the hands of the assessee as its business income as rightly held by the Assessing Officer and not longterm capital gain as held by the ld. CIT(Appeals). We, therefore, set aside the impugned order of the Ld. CIT(Appeals) on this issue and restore that of the Assessing Officer. The appeal of the Revenue is accordingly allowed. So it was that the appeal was admitted on the following substantial question of law formulated. Whether the Tribunal was correct in holding that the profit arising from the sale of the said shares is chargeable to tax in the hands of the assessee as its business income and not long term capital gain since in the assessee s own case in the previous assessment year the conversion of the shares was not accepted by the Tribunal? We however intend to answer both the above questions upon having heard the parties in this appeal. Mr. Sharma, learned Advocate appeared on behalf of the assessee and submitted, the conversion claimed by his client, of shares as stock-intrade into investment, had been shown in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear, shall remain applicable in subsequent Assessment Years also and the taxpayers shall not be allowed to adopt a different/contrary stand in this regard in subsequent years; (c) . On the point of resjudicata Mr. Sharma relied on the case of Snow White Food Products Co. Ltd. vs. CIT reported in (1982) 10 Taxman 37 (Cal), in particular to the extracted portion from paragraph 10 of that judgment. In any event, it is well settled that the principles of res judicata are not applicable in revenue matters and findings of fact in an earlier year are not binding in the assessments in subsequent years and can be resisted on new evidence. Mr. Lodhe, learned Advocate appeared on behalf of the Revenue and submitted that neither the above questions were substantial questions of law nor were they involved in this case because when in the previous assessment year the claim of conversion by the assessee was turned down by the Tribunal, the assessee s delayed appeal was dismissed by a Division Bench of this Court on 5th May, 2015 on the reason of choice made by the assessee. The petitioner made a conscious choice of not preferring an appeal and accepting the order, whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... support from Kikabhai Premchand (supra) where the situation at hand was contemplated as would appear from the following as expressed in the dissenting view: When the asset is withdrawn from the stock-in-trade of the business the position in my opinion would be no different. So far as this business is concerned the asset would go out and cease to be a part of its stock-in-trade and this again would be the measure of the profit or loss as the case may be of the business qua that particular asset . In Dhanuka Sons (supra) the same situation was contemplated where on stock transferred in investment account, the question of capital loss or capital gain, was held, would arise if such shares be disposed of at a value other than the value at which it was transferred from the business stock. We, on noticing that the Tribunal did not really hold otherwise but had held against the assessee on the point of resjudicata, had formulated the above question. Nevertheless for the reasons aforesaid we answer the question suggested by the assessee in the affirmative and in its favour. In that regard the said circular dated 29th February, 2016 has no application because the assessee s s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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