Income Tax Appellate Tribunal - Pune
Satish Madanlal Gupta,, Pune vs Additional Commissioner Of ... on 24 September, 2018
आयकर अपीऱीय अधिकरण पण
ु े न्यायपीठ "ए" पण
ु े में
IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCH "A", PUNE
सुश्री सुषमा चावऱा, न्याययक सदस्य एवं श्री अयिऱ चतुवेदी, ऱेखा सदस्य के समक्ष
BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM
आयकर अपीऱ सं. / ITA No.1287/PUN/2014
यििाारण वषा / Assessment Year : 2008-09
Shri Satish Madanlal Gupta,
445, Gokhale Cross Road,
Behind Mafatlal Bungalow,
Pune - 411016 .... अऩीऱाथी/Appellant
PAN: ADQPG9339K
Vs.
The Addl. Commissioner of Income Tax,
Range - 3, Pune .... प्रत्यथी / Respondent
अऩीऱाथी की ओर से / Appellant by : S/Shri S.U. Pathak and
Nikhil Pathak
प्रत्यथी की ओर से / Respondent by : Shri Ajay Modi
सन
ु वाई की तारीख / घोषणा की तारीख /
Date of Hearing : 07.09.2018 Date of Pronouncement: 24.09.2018
आदे श / ORDER
PER SUSHMA CHOWLA, JM:
The appeal filed by the assessee is against the order of CIT(A)-II, Pune, dated 06.01.2014 relating to assessment year 2008-09 against order passed under section 143(3) of the Income-tax Act, 1961 (in short 'the Act').
2. The assessee has raised the following grounds of appeal:-
On the facts and circumstances of the case and in law:
1. The Hon. CIT(A) erred in holding that the share transactions of the appellant represented activity by way of an adventure in the nature of trade and business.2 ITA No.1287/PUN/2014
Shri Satish Madanlal Gupta
2. The Hon CIT(A) erred in confirming the order of the AO charging as Income from Business income arising during the year from transfer of shares held as investments and declared under the head Capital Gains.
3. The appellant pleads that his income from share transactions was correctly declared under the head Capital Gains and that and the action of the AO assessing these under the head „Profits & Gains of Business or Profession‟ is not justified.
3. The issue arising in the present appeal is in respect of assessability of gain arising from transfer of shares wherein the assessee had declared the same under the head 'Capital gains' and the authorities below have assessed as 'Income from business'.
4. Briefly, in the facts of the case, the assessee is an individual and had furnished the return of income declaring total income of ₹ 3,99,84,740/-. The assessee had declared income from salary, house property, share of profit from business, capital gains and income from other sources. The assessee furnished revised return of income during the course of assessment proceedings, wherein the assessee had set off carry forward long term loss of ₹ 16,80,371/- against the income and also credited the interest income from Kisan Vikas Patras. During the course of assessment proceedings, the Assessing Officer noted that the assessee together with his brother Mr. Rahul Agarwal had sold immovable property and the provisions of capital gains under section 50C of the Act were to be applied and hence, he re-computed the capital gains on sale of property. Further, the Assessing Officer also made addition on account of interest accrued on Kisan Vikas Patras.
5. The next transaction was the shares transaction undertaken by the assessee, wherein the assessee had declared income under the head 'Short 3 ITA No.1287/PUN/2014 Shri Satish Madanlal Gupta term capital gains' and 'Long term capital gains'. The assessee had shown long term capital gains as exempt, however, declared the income under the head 'Short term capital gains' at ₹ 2,58,42,793/-. From the details furnished by the assessee, the Assessing Officer noted that full value of consideration of shares were ₹ 12.48 crores and the cost of acquisition was ₹ 9.89 crores. The Assessing Officer also noted that transactions were done through D-Mat account and the Savings Bank Account. However, when compared, then the same were far more than the transactions reflected in the return of income. The transactions in the name of assessee were recorded in the books of partnership firm M/s. Agarwal Enterprises, where the assessee was partner and total value of consideration in respect of shares transactions stood at ₹ 79.74 crores. The corresponding cost of shares sold was shown at ₹ 72.43 crores and after debiting related expenses, the income from share trading was shown at ₹ 7.09 crores. The Assessing Officer noted that from the common D-Mat account the transactions had been shown as that of assessee and the remaining part had been shown as pertaining to the partnership firm. The firm M/s. Agarwal Enterprises had offered the income from shares transactions as 'Business income', whereas the assessee had offered the same as 'Income from capital gains'. The assessee was asked to explain as to why the shares transactions be not treated as 'Income from business'. In reply, the assessee explained that he was investing in shares since 1990 and had been offering the surplus or deficit under the head 'Capital gains'. The assessee further explained that he was full-fledged Managing Director of the company and was also partner in various firms. The assessee also explained that D-Mat account was held in his personal name for effecting the transactions of purchase and sale of shares. In respect of partnership concern, it was explained that the said 4 ITA No.1287/PUN/2014 Shri Satish Madanlal Gupta firm was engaged in trading of shares. Originally, the firm had three partners which including Mr. M.S. Agarwal i.e. father of assessee and until 1999, all the transactions of firm were held in the name of Mr. M.S. Agarwal. However, after his demise, the shares were held in the name of assessee. Since the firm's transactions in shares as business, the income was shown as business profit / loss. However, the assessee purchased the shares for his own investment purpose and the shares in his personal name were held as investment. It was also the understanding between the parties that the assessee would use the said D-mat account for his investment purposes also and the transactions would be informed to the other partners immediately. The said transactions were not to be recorded in the books of account of the firm. The assessee stressed that the income is to be assessed under the head 'Income from short term capital gains'. Reliance was placed on series of decisions in this regard including the jurisdictional High Court in the case of CIT Vs. Gopal Purohit, dated 06.01.2010. The Assessing Officer noted that the assessee had undertaken total number of 499 purchase transactions and 863 sales transactions, which resulted in gain of ₹ 2.58 crores, which was offered as 'Short term capital gains'. He further noted that the assessee had applied in IPOs i.e. in 16 cases, which were sold on allotment. The Assessing Officer also noted that the main business of M/s. Agarwal Enterprises was share trading which was established on 16.09.1988. The Assessing Officer noted another transaction with the Savings Bank Account through which shares transactions were entered into by the firm as well as the assessee were recorded in the books of firm and surplus / deficit on the same would be charged as business profit / loss and adopted by the partners. He also noted that the amounts which are paid for the shares purchased by the assessee 5 ITA No.1287/PUN/2014 Shri Satish Madanlal Gupta would be debited to his capital account and in case the amount is received against sale of shares by the assessee, then the same would be credited to the assessee's capital account. The Assessing Officer was of the view that so- called understanding between the assessee and other partners was nothing but an arrangement of convenience whereby the transactions undertaken from the D-mat account funded from the same SB account could be treated differently one in the hands of firm and another in the hands of partners. The Assessing Officer noted that the assessee purchased shares and only at the end of year the transactions were segregated and separated and separately shown in the name of assessee as investments, only to take the benefit of differential tax rates. Further, the recording of assessee's SB account in the books of M/s. Agarwal Enterprises was held to be another indicator of arrangement which made it convenient for the assessee to show a particular transaction in his name and the balance in the name of partnership firm. The Assessing Officer further tabulated the transactions of short term capital gains on the days of holding shares and also noted that the assessee had total dealt in 28 scrips during the year and there were 19 such common scrips which were dealt in by the assessee and M/s. Agarwal Enterprises. The Assessing Officer also perused the scrip ledger of assessee and scrip ledger of firm and noted that the assessee had essentially entered into the same scrip for the so-called investment purpose for himself and for the partnership firm. Taking into account the totality of facts and circumstances, wherein there was high magnitude and frequency of purchases and sales transactions of repeated purchases / sales and small period of holding, the Assessing Officer held that the same indicated business activity and the intention to re-sale the shares at profit without holding for long. The Assessing Officer was of the view that 6 ITA No.1287/PUN/2014 Shri Satish Madanlal Gupta where the assessee had entered into significant amount of transactions by holding large number of shares for short period of time and had earned significantly less dividend, then the assessee was engaged in regular trading activity which constitutes business and the income arising therefrom was to be assessed as 'Income from business'.
6. The CIT(A) has upheld the order of Assessing Officer as the assessee had failed to establish that the entire activity and the shareholding was in the nature of investment. The CIT(A) observed that most of the transactions carried out during the year were short term in nature and the motive of purchasing shares was clearly profit booking by selling at higher rates and not for earning dividend. In view of the high volume, frequency, continuity and regularity of the shares transactions, which were done in an organized manner would constitute business activity and therefore, the profit derived from such transaction was taxable under the head 'Income from business', was the finding of CIT(A).
7. The assessee is in appeal against the order of CIT(A).
8. The learned Authorized Representative for the assessee pointed out that the assessee was Director of Packaging company and was partner of a firm, wherein the business was purchase and sale of shares. The learned Authorized Representative for the assessee pointed out that same D-mat account was used by the firm and the assessee. The firm had declared income under the head 'Business income' on sale / purchase of shares. He further referred to the order of Assessing Officer, wherein he has observed that it is 7 ITA No.1287/PUN/2014 Shri Satish Madanlal Gupta adventure in the nature of trade and the conclusion of Assessing Officer was that the shares purchased by the firm and the assessee were same. He pointed out that the said allegation was incorrect as the shares purchased by the assessee and the firm were completely different except one scrip of ICICI Ltd. He also pointed out that all shares purchased by the assessee were delivery based shares except IPOs. Our attention was drawn to the details filed at page 190 of Paper Book. He also referred to the Balance Sheet of assessee and pointed out that there was no interest liability and no borrowed funds were utilized for making aforesaid investments. The learned Authorized Representative for the assessee before us has furnished a Note on the details of transactions in various years. He pointed out that in the case of assessee, the income from sale of shares was declared under both heads - short term capital gains and long term capital gains from assessment year 2005-06 and only in assessment year 2008-09, the said position was not accepted. He further pointed out that in assessment year 2010-11, the assessee had declared capital gains of ₹ 81,37,568/- which was not disturbed by the Assessing Officer and even as late as assessment year 2014-15, the income declared by the assessee was accepted, wherein the short term capital gains were to the tune of ₹ 11,33,500/-. He also pointed out that the assessee was holding pool of investments, out of which certain shares were held for long period and income was declared under the head 'Income from long term capital gains' which was not disturbed in any of the years. From the same pool of investments made, which were also through the same D-mat account and the transactions through the same SB account, the shares were also held for short period and sold and the gain arising therefrom was shown as short term capital gain, which is being accepted for all the years except for the year under appeal. 8 ITA No.1287/PUN/2014
Shri Satish Madanlal Gupta In respect of share transactions declared by M/s. Agarwal Enterprises, the partnership firm, the learned Authorized Representative for the assessee pointed out that the firm has been declaring income under the head 'Income from business' from assessment year 2005-06 onwards. He placed reliance on the ratio laid down by the Hon'ble Bombay High Court in CIT Vs. Gopal Purohit (2011) 336 ITR 287 (Bom), wherein profit of about ₹ 5 crores was from sale of 7,59,003 shares was assessed as 'Short term capital gains' and profit of about ₹ 6.65 crores on sale of 3,88,797 shares as 'Long term capital gains'. The said profit was assessed as 'Capital gains' and not as 'Income from business'. In the earlier years also, shares profit was taxed as 'Capital gains' and therefore, the Hon'ble High Court held that consistency should be maintained. He further placed reliance on the decision of the Ahmedabad Bench of Tribunal in Shri Rashmikant Chhaganbhai Patel Vs. Addl.CIT in ITA Nos.2131/Ahd/2014 & 2484/Ahd/2011, relating to assessment years 2006-07 and 2008-09, order dated 13.05.2016, wherein the assessee had dealt in 167 scrips and had carried out multiple trading in buying and selling the shares, the assessee had taken the delivery of shares and he was held to be investor and not a trader. The profit arising on sale of shares was held to be 'Capital gains' and it was held that merely because the number of transactions had gone up, the character of the assessee as investor would not change. The learned Authorized Representative for the assessee placed reliance on various other decisions of different Benches of the Tribunal. He then, referred to the decision of the Hon'ble Bombay High Court in CIT Vs. Datta Mahendra Shah (2015) 378 ITR 304 (Bom), wherein capital gains of ₹ 9.25 crores was assessed as 'Income from short term capital gains'. The learned Authorized Representative for the assessee further pointed out that the Ahmedabad Bench of Tribunal in 9 ITA No.1287/PUN/2014 Shri Satish Madanlal Gupta Digvijay Finlease Ltd. Vs. DCIT (2017) 163 ITD 431 (Ahmedabad - Trib.) had held that even where shares were held for less than 30 days during the year, the gain was to be assessed as 'Short term capital gains' and not as 'Business income'. The learned Authorized Representative for the assessee pointed out that there is no merit in looking at the magnitude of the transactions and the accepted position should not be disturbed. He also referred to the order of Assessing Officer passed under section 143(3) of the Act, dated 29.06.2016 relating to assessment year 2014-15, wherein the plea of assessee as such was accepted on account of sale of shares.
9. The learned Departmental Representative for the Revenue however, stressed that the assessee was maintaining common D-mat account for the transactions of firm, in which the assessee was a partner and also on his individual account. He referred to the order of Assessing Officer, wherein he says that there is no basis for bifurcation of transactions between the firm and individual. He also pointed out that there were more than 10,000 transactions in the D-mat account and 1790 transactions related to the assessee. He also referred to page 25 of the order of Assessing Officer at point (e), wherein he has pointed out that there were 19 common scrips and at point (c), wherein the transactions were less than 60 days, totaling about ₹ 6 crores. In respect of reliance placed upon by the learned Authorized Representative for the assessee, he pointed out that the facts of said case were different i.e. in those cases, long term capital gains were more than short term capital gains, whereas in the case of assessee, it was reversed. He relied on the order of Assessing Officer and various case laws referred to in the assessment order. He then, relied on the decision of Pune Bench of Tribunal in bunch of appeals 10 ITA No.1287/PUN/2014 Shri Satish Madanlal Gupta with lead order in the case of Shri Sunil Manakchand Kotecha Vs. ACIT in ITA No.691/PUN/2013, relating to assessment year 2006-07, consolidated order dated 12.01.2018.
10. We have heard the rival contentions and perused the record. The issue raised in the present appeal is against inconsistency approach of the authorities below in the case of assessee, while assessing income from short term capital gains. The assessee was Director of the company and was also partner in partnership firm, which was engaged in shares transactions and was declaring income from business. The assessee was also making investment in shares and had declared 'Income from long term capital gains' and 'Short term capital gains'. The shares transactions were carried out through one D-mat account and Savings Bank Account in the name of assessee. The shares which were purchased by the assessee and which were dealt in by the assessee and by the firm M/s. Agarwal Enterprises were routed through the same D-mat account. The said firm was carrying on business since 1988. However, earlier the business was carried on in the name of the father of assessee who was also partner in the said firm; but from 1999, D-mat account of the assessee was used by the said partnership firm. Since the partnership firm had declared income from business, the Assessing Officer and CIT(A) questioned the taxability of gain arising in the hands of assessee on short term basis. It may be pointed out herein that income declared under long term capital gains was accepted as such. However, because of volume of transactions and frequency of transactions, the Assessing Officer was of the view that the assessee was engaged in carrying on adventure in the nature of trade and assessed the income from business. The Assessing Officer has also alleged that shares 11 ITA No.1287/PUN/2014 Shri Satish Madanlal Gupta dealt in by the assessee and partnership firm were same and it was difficult to decipher as to why one lot of shares when sold were treated as 'Income from business' and the same scrip when sold by the assessee was treated as 'Short term capital gains'.
11. The assessee before us has furnished income declared by the assessee for the preceding and succeeding years. The tabulated details of short term capital gains on sale of shares and mutual funds and long term capital gains on sale of shares and mutual funds, in the hands of assessee are as under:-
Sr No. A.Y. STCG LTCG
1 2005-06 2,39,93,885 92,80,949
2 2006-07 2,57,45,640 56,50,961
3 2007-08 9,45,410 39,24,552
4 2008-09 2,58,42,802 1,22,348
5 2009-10 0 0
6 2010-11 81,37,568 0
7 2011-12 6,35,526 16,266
12. The assessee has also furnished year-wise details of business income declared by the partnership firm, which is as under:-
Sr No. A.Y. PROFIT/LOSS
1 2005-06 2,93,32,301
2 2006-07 4,33,36,831
3 2007-08 86,18,618
4 2008-09 7,08,63,650
5 2009-10 (17,28,69,443)
6 2010-11 21,62,89,107
7 2011-12 5,19,37,566
13. The assessee and partnership firm have from year to year declared substantial income from sale of shares. The business income declared by M/s. Agarwal Enterprises has not been disturbed in any of the years. Similarly, income declared by the assessee on account of investment in shares has been 12 ITA No.1287/PUN/2014 Shri Satish Madanlal Gupta accepted for all the years except captioned assessment year, wherein though the income from long term capital gains had been accepted as such, but the income from short term capital gains had not been accepted. It may also be pointed out that the mode of transaction in earlier years and in the later years was same i.e. both the assessee and firm were using D-mat account of assessee, since no D-mat account could be opened in the name of partnership firm. The bank account was also being used by the firm, wherein the payment for purchase of shares was paid by the firm and even the sale proceeds of shares were deposited in the said account. In case the shares were invested by the assessee and where such investment was sold by the assessee, then the entries in this regard were routed through the capital account of the assessee in the partnership firm; the firm otherwise dealt with the said account. In other words, consistent approach had been adopted by the assessee. Even, if we look at the volume of transactions, the same matches in many years. Further, assessment for assessment year 2014-15 has been completed under section 143(3) of the Act vide order dated 29.06.2016 and the income shown from short term capital gains has been accepted as such. The copies of computation of income and assessment order are available on record. The learned Authorized Representative for the assessee also pointed out that investment in the shares were out of own funds of the assessee and no borrowings had been made for making the aforesaid investments. It was also pointed out by the learned Authorized Representative for the assessee that the Assessing Officer is incorrect in observing that same shares were invested by the assessee and purchased by the firm. He pointed out that except one scrip of ICICI Ltd., the shares purchased by the assessee were delivery based shares. The assessee had declared the investment in shares under the head 13 ITA No.1287/PUN/2014 Shri Satish Madanlal Gupta 'Investment' in its Balance Sheet. The learned Departmental Representative for the Revenue has not controverted the submissions of assessee except for relying on the orders of Assessing Officer and CIT(A).
14. The issue which arises is that where the assessee is holding pool of investments and part of transactions declared as long term capital gains has been accepted, can the balance part be disturbed since the assessee had sold the shares in shorter period of time. Further where the same mode of transactions are being followed, can the accepted mode of taxing the gains be disturbed.
15. The issue which arises is whether the stand taken by the Assessing Officer and CIT(A) against the assessee in assessing 'Income from short term capital gains' under the head 'Income from business', where the assessee was holding pool of investments and where the income declared under two heads of long term capital gains and short term capital gains have been accepted in the preceding and succeeding years, can the same be disturbed by the Assessing Officer in the intervening year. The answer to the same is 'No'. Once the position has been accepted in the hands of assessee from year to year, unless and until some peculiar facts arise in the captioned assessment year, the position accepted cannot be disturbed. The Assessing Officer having accepted the gain shown by the assessee both in preceding years and even in the succeeding years, wherein in assessment year 2014-15, the assessment has been completed under section 143(3) of the Act without disturbing declaration made by the assessee under the head 'Short term capital gains', authorities below cannot disturb the accepted and settled position in the hands of 14 ITA No.1287/PUN/2014 Shri Satish Madanlal Gupta assessee, unless and until there were some peculiar facts in the year under consideration.
16. Another aspect which needs to be kept in mind is the Circular No.6/2016 issued by the CBDT on 29.02.2016. The CBDT took note of the Courts having laid down different parameters to distinguish the shares held as 'investment' from the shares held as 'stock-in-trade'. It also took note of the disputes which continue to exist on the application of said principles, since the tax payers found difficulty to prove the intention in acquiring the shares / securities. In this background, the CBDT in order to decide the character of income from sale of shares and securities i.e. whether the same was capital gain or business income and in order to reduce litigation and uncertainty in the matter, further instructed that the Assessing Officers in holding whether the surplus generated from sale of listed shares or other securities would be treated as capital gain or business income shall take into account the following:-
a) Where the assessee itself, irrespective of the period of holding the listed shares and securities, opts to treat them as stock-in-trade, the income arising from transfer of such shares/securities would be treated as its business income;
b) In respect of listed shares and securities held for a period of more than 12 months immediately preceding the date of its transfer, if the assessee desires to treat the income arising from the transfer thereof as Capital Gain, the same shall not be put to dispute by the Assessing Officer. However, this stand, once taken by the assessee in a particular Assessment Year, 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) In all other cases, the nature of transaction (i.e. whether the same is in the nature of capital gain or business income) shall continue to be decided keeping in view the aforesaid Circulars issued by the CBDT.
17. Various Benches of Tribunal thereafter have decided the issue of assessability of gain arising on sale of shares following the said principles. It 15 ITA No.1287/PUN/2014 Shri Satish Madanlal Gupta may also be pointed out that the jurisdictional High Court in the case of CIT Vs. Gopal Purohit (supra) had also decided similar issue and held as under:-
"2. The Tribunal has entered a pure finding of fact that the assessee was engaged in two different types of transactions. The first set of transactions involved investment in shares. The second set of transactions involved dealing in shares for the purposes of business (described in paragraph 8.3 of the judgment of the Tribunal as transactions purely of jobbing without delivery). The Tribunal has correctly applied the principle of law in accepting the position that it is open to an assessee to maintain two separate port folios, one relating to investment in shares and another relating to business activities involving dealing in shares. The Tribunal held that the delivery based transactions in the present case, should be treated as those in the nature of investment transactions and the profit received there from should be treated either as short term or, as the case may be, long term capital gain, depending upon the period of the holding. A finding of fact has been arrived at by the Tribunal as regards the existence of two distinct types of transactions namely, those by way of investment on one hand and those for the purposes of business on the other hand. Question (a) above, does not raise any substantial question of law."
18. The SLP filed by the Revenue has been dismissed by the Hon'ble Supreme Court vide judgment dated 15.11.2010.
19. The Ahmedabad Bench of Tribunal in Digvijay Finlease Ltd. Vs. DCIT (supra) have held that even if the shares were held for less than 30 days during the year, there was no justification in treating the short term capital gains as business income in the hands of said assessee. The learned Authorized Representative for the assessee before us has furnished details pointing out that the short term capital gains arising on sale of shares held less than 30 days was very meager.
20. The Mumbai Bench of Tribunal in the case of Gopal Purohit reported in 29 SOT 117 (Bom) had decided the issue on the basis of rule of consistency, wherein it was held that the assessee was an investor. The Assessing Officer in para XXV at page 38 of the assessment order has taken note of the said 16 ITA No.1287/PUN/2014 Shri Satish Madanlal Gupta decision of the Mumbai Bench of Tribunal but has failed to apply the said ratio. The Hon'ble Bombay High Court (supra) has confirmed the order of Tribunal and the SLP has been dismissed on 15.11.2010. Another objection of Assessing Officer was the high volume of transactions undertaken by the assessee, which points out that the assessee was engaged in trading in shares and not as investments. The Hon'ble Bombay High Court in CIT Vs. Datta Mahendra Shah (supra) has assessed capital gains of ₹ 9.25 crores declared by the assessee as 'Income from short term capital gains'. In other words, it is the transaction and the intention of assessee which has to be looked into and not the magnitude of the transaction. Further, the accepted position of assessing the income under a particular head cannot be disturbed on mere surmises.
21. In the entirety of the above said facts and in view of the recognition of disputes by the CBDT and consequent Circular issued by it on 29.02.2016, it may be pointed out that the assessee was maintaining one pool of investments and the gain arising under the head 'Long term capital gains' had been accepted perse and had not been disturbed in any of the years. It is only the gain which has been declared under the head 'Income from short term capital gains which was disturbed in assessment year 2008-09. Once the CBDT recognizes litigation arising because of non-consistent stand being taken by the Revenue authorities and guidelines have been issued though in 2016 but such guidelines are to be applied while deciding the issues which are pending. In view of the guidelines and the dispute being settled by the jurisdictional High Court and various Benches of Tribunal and also where the assessee was showing its pool of shares as investment in its hands and making declaration in 17 ITA No.1287/PUN/2014 Shri Satish Madanlal Gupta this regard in the Balance Sheet from year to year, such position should not be disturbed. Even the CBDT has guided Officers that the position shall not be put to dispute by the Assessing Officer. It further goes on to state that once the stand has been taken by the assessee in a particular assessment year, then the same shall remain applicable in subsequent assessment years also.
22. The assessee before us has consistently taken a stand and declared gains arising on its investment under the head 'Capital gains', both long term and short term, then the same merits to be accepted. We are also guided by the ratio laid down by the jurisdictional High Court in the case of CIT Vs. Gopal Purohit (supra).
23. Before parting, we may also refer to the reliance placed upon by the learned Departmental Representative for the Revenue on the ratio laid down by the Pune Bench of Tribunal in Shri Sunil Manakchand Kotecha Vs. ACIT (supra). The factual aspects of the said case are at variance, wherein the matter has been set aside to the file of Assessing Officer to re-examine various issues and re-work the extent of gain and its taxability of profits and gains of business. The Tribunal took note of the fact that the assessee had borrowed funds but it was not clear whether the borrowed funds were utilized and hence, the Assessing Officer was directed to examine the same. However, the facts of the case are at variance wherein no borrowed funds had been utilized for making investment in shares and also all shares were delivery based. We decide the present issue in view of the ratio laid down by the jurisdictional High Court in CIT Vs. Gopal Purohit (supra), in which case SLP filed by the Revenue 18 ITA No.1287/PUN/2014 Shri Satish Madanlal Gupta has also been dismissed. The grounds of appeal raised by the assessee are thus, allowed.
24. In the result, the appeal of assessee is allowed.
Order pronounced on this 24th day of September, 2018.
Sd/- Sd/-
(ANIL CHATURVEDI) (SUSHMA CHOWLA)
ऱेखा सदस्य / ACCOUNTANT MEMBER न्याययक सदस्य / JUDICIAL MEMBER
ऩण
ु े / Pune; ददनाांक Dated : 24th September, 2018.
GCVSR
आदे श की प्रयतलऱपप अग्रेपषत/Copy of the Order is forwarded to :
1. अऩीऱाथी / The Appellant;
2. प्रत्यथी / The Respondent;
3. आयकर आयुक्त(अऩीऱ) / The CIT(A)-II, Pune;
4. The CIT-II, Pune;
5. ववभागीय प्रतततनधध, आयकर अऩीऱीय अधधकरण, ऩुणे "ए" / DR 'A', ITAT, Pune;
6. गार्ड पाईऱ / Guard file.
ु ार/ BY ORDER, आदे शािस सत्यावऩत प्रतत //True Copy// वररष्ठ तनजी सधिव / Sr. Private Secretary आयकर अऩीऱीय अधधकरण ,ऩण ु े / ITAT, Pune