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TMI Blog2019 (9) TMI 309X X X X Extracts X X X X X X X X Extracts X X X X ..... .2 of appeal relating to the assessment year 2008-09 are on the common point, whether the receipt from the sale of paintings is to be assessed as income from business and profession or capital gain. 3. Brief facts are, the assessee, an individual, is engaged in profession of a professional photographer. For the assessment year 2007-08, the assessee filed his return of income on 29th October 2007, declaring total income of Rs. 97,56,138. Similarly, for the assessment year 2008-09, the assessee had filed his return of income on 26th September 2008, declaring total income of Rs. 3,02,06,403. It is relevant to observe, assessment in both these assessment years were originally completed under section 143(3) of the Income-tax Act, 1961 (for shor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al on the issue, learned Commissioner (Appeals) also rejected assessee's claim of capital receipt and held that the profit from sale of painting has to be treated as business income. However, he granted partial relief to the assessee in the assessment year 2008-09 by reducing the total addition made by the Assessing Officer in this regard. 4. Reiterating the stand taken before the Departmental Authorities, the learned Authorised Representative submitted, the assessee is a professional photographer and is not in the business of trading in painting. He submitted, the assessee is an art lover and collector, hence, he regularly purchases paintings of reputed artists. He submitted, knowing assessee's love towards paintings, even his friends als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atements made by him before the Departmental Authorities. He submitted, to justify sale of paintings though the assessee had stated that due to constraint of space in house he has sold paintings, however, it has been found by the Departmental Authorities and the assessee has also purchased new paintings during the year. Therefore, had it been a case of constraint of space, the assessee would not have purchased the paintings. He submitted, factual analysis made by the Assessing Officer and learned Commissioner (Appeals) also reveal that the assessee has undertaken frequent purchase and sale of paintings. Therefore, activity of the assessee is akin to adventure in the nature of trade. The learned Departmental Representative submitted, for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ideration, the assessee had sold some paintings either purchased by him or gifted to him by some of his friends. From the sale of such paintings, the assessee had derived some profit. Analysis of facts emerging from record does not suggest that the assessee has indulged in any organized or regular activity of purchase and sale of paintings. There is nothing on record to suggest that except the aforesaid assessment years, the assessee had engaged himself in the activity of purchase and sale of paintings in any other past or subsequent years. At least, no such fact has either been brought on record by the Departmental Authorities or brought to our notice by the Departmental Authorities. Therefore, in the absence of any material brought on re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rounds no.1 and 2 of ITA no.784/Mum./2017 and ground no.2 of ITA no.785/Mum./2017, is allowed. 8. The only other surviving issue for our adjudication is ground no.1 and 1.1 of ITA no.785/Mum./2017. 9. These grounds relate to the addition of an amount of Rs. 51,20,600, as undisclosed income on account of sale of shares of Matrix India Entertainment Consultant Pvt. Ltd. (MIECPL). 10. Brief facts are, during the search and seizure operation conducted in case of the assessee, certain incriminating material relating to purchase and sale of shares of MIECPL were found. As per the seized documents, it was noticed that the assessee was offered an amount of Rs. 3.1 crore towards transfer of shares in MIECPL. On the basis of the aforesaid informat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale the shares at the price of Rs. 1,040 per share on 27th November 2006. Thus, he held that the sale consideration of shares of MIECPL for the assessment year 2007-08 should be computed at Rs. 3,174 per share resulting in total sale consideration at Rs. 76,17,600. Since, the assessee had disclosed sale consideration of Rs. 24,97,000 in the return of income filed for the assessment year 2007-08, he directed that the balance amount of Rs. 51,20,600, should be added to the income of the assessee in the assessment year 2007-08. Learned Authorised Representative submitted, while enhancing the income of the assessee for the assessment year 2007-08, that too, in the appeal proceeding for the assessment year 2008-09, learned Commissioner (Appea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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