Income Tax Appellate Tribunal - Mumbai
Rajkishore Mundra, Mumbai vs Department Of Income Tax on 20 December, 2010
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCHES "D", MUMBAI
Before Shri R.S.Syal, AM and Shri Vijay Pal Rao, JM
ITA No.2143/Mum/2010 : Asst.Year 2006-2007
The Asstt.Commissioner of Income-tax Shri Rajkishore Mundra
Circle 14(2) 312 Kalbadevi Road
Mumbai. Mumbai - 400 002.
Vs.
PA No.AAGPM4307G.
(Appellant) (Respondent)
Appellant by : Shri R.S.Srivastava
Respondent by : --- None ---
ORDER
Per R.S.Syal, AM :
This appeal by the Revenue arises out of the order passed by the Commissioner of Income-tax (Appeals) on 16.12.2009 in relation to the assessment year 2006-2007.
2. The only ground is against the direction of the learned CIT(A) to treat profit on sale of shares as chargeable to tax under `Capital gain' and not as `Business income' as held by the AO. Briefly stated the facts of the case are that the assessee, an employee also having income from house property dealt in shares. Apart from others, a sum of Rs.4,27,206 was offered as income from short term capital gain on share transactions. On being called upon to explain as to why such income be not treated as business income, the assessee tendered explanation stating that he simply invested his surplus funds in shares; was neither a share broker nor a dealer in shares on day to day basis; short term capital gain was mostly earned from investment in shares; no shares were shown as stock in trade in his balance sheet; and, magnitude of purchase and sale of securities was not that high so as to be treated as a business activity. The Assessing Officer noted that the assessee had shown the shares as `Investment' in his balance sheet. As sufficient income was shown from trading in speculation also, the Assessing Officer opined that the amount shown as short term capital gain was liable to be assessed as business 2 ITA No.2143/Mum/2010 Shri Rajkishore Mundra.
income. The learned CIT(A) overturned the assessment order on this issue, against which the Revenue has come up in appeal before us.
3. We have heard the learned Departmental Representative and perused the relevant material on record. There is no appearance from the side of the assessee despite notice. It is seen that the learned CIT(A) has recorded categorical finding that the assessee invested only surplus funds in shares and mutual funds and no amount was ever taken on loan for the purpose of investment in shares. It has further been noted in para 6 of the impugned order that such investments were made since past many years and the department had accepted the same by taxing income there from as long term capital gain or short term capital gain, as the case may be, on sale of such shares. It has further been noted that most of the shares were purchased in 2001 and sold in 2005. Then the learned CIT(A) has relied on the order passed by the Mumbai Bench of the Tribunal in Shri Bharat Kunwverji Kenia in ITA No.6544/Mum/2008 for coming to the conclusion that the profit or gain on sale of shares in such a situation was liable to be considered as capital gain and not as business income. The learned Departmental Representative could not controvert any of the findings recorded by the learned CIT(A) with any material or evidence. From the narration of above facts it is clear that the income from the transfer of such shares cannot be held as business income. We, therefore, approve the view taken by the learned CIT(A) in upholding the treatment given by the assessee as capital gain.
4. In the result, the appeal is dismissed.
Order pronounced on this 20th day of December, 2010.
Sd/- Sd/-
(Vijay Pal Rao) (R.S.Syal)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Mumbai : 20th December, 2010.
Devdas*
3 ITA No.2143/Mum/2010
Shri Rajkishore Mundra.
Copy to :
1. The Appellant.
2. The Respondent.
3. The CIT concerned
4. The CIT(A) - XXV, Mumbai.
5. The DR/ITAT, Mumbai.
6. Guard File.
TRUE COPY.
By Order
Assistant Registrar, ITAT, Mumbai.