Commissioner Of Income Taxchennai v. M/S.stargate Investments Pvt. Ltd

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATE : 03.12.2014 CORAM THE HONOURABLE MR. JUSTICE R.SUDHAKARANDTHE HONOURABLE MR. JUSTICE R.KARUPPIAH T.C. (A) NO. 638 OF 2014 Commissioner of Income TaxChennai... Appellant - Vs - M/s.Stargate Investments Pvt. Ltd.9, Cathedral RoadChennai 600 086. .. Respondent Appeal filed against the order dated 15.09.2011 passed by the Income Tax Appellate Tribunal, Madras ' C' Bench in ITA No.1004/Mds/2011. For Appellant: Mr. T.Ravikumar JUDGMENT (DELIVERED BY R.SUDHAKAR, J.) Aggrieved against the order of the Income Tax Appellate Tribunal in dismissing the appeal filed by it, the Revenue is before this Court challenging the said order by filing the present appeal, by raising the following questions of law :- “1) Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the sale of shares does not fall under the head “income from business” but under the head “capital gains”, thereby, entitling for relief u/s 10 (38) of the Income Tax Act, 1961? 2) Whether on the facts and in the circumstances of the case, the Tribunal was right in not considering the fact that transaction of sale and purchase of shares is in line with assessee's business and, hence, amounts to adventure in the nature of trade? 2. The respondent assessee is engaged in the business of investment in shares and securities. The assessee filed return of income for the assessment year 2008-2009 on 29.9.2008. The assessee company sold shares of India Cements Ltd., and claimed exemption under Section 10 (38) of the Income Tax Act as Long Term Capital Gains for the assessment years 2006-2007 and 2008-2009. The Assessing Officer passed an order on 31.12.10 and held that profit on sale of shares to be taxed as business income and not as long term capital gains as the sale constitutes adventure in the nature of trade. 3. Aggrieved against the said assessment, the assessee preferred appeal before the CIT (Appeals). The CIT (Appeals), on consideration of the matter, by following the earlier order passed in the case of the very same assessee in ITA No.1400/Mds/2009 dated, allowed the assessee's claim holding that the assessee is entitled to claim exemption under Section 10 (38) of the Act. The CIT (Appeals) was of the view that the shares held by the assessee were in the nature of capital asset and not stock in trade. 4. Aggrieved against the said order of the CIT (Appeals), the Revenue filed appeal before the Appellate Tribunal. The Tribunal, took note of its earlier order passed in the case of the very same assessee in ITA No.1400/Mds/2009 dated 13.8.10, for the assessment year 2006-2007, wherein identical issue raised was answered against the Department, wherein a finding was given that the shares were held by the assessee was long term investment and there was no basis to treat it as stock in trade of the assessee company. The Tribunal held that the shares were held as long term investment and, therefore, the same is entitled to long term capital gains and, thereby, upheld the order of the CIT (Appeals). Aggrieved against the said order, the Revenue is before this Court by filing the present appeal. 5. Heard Mr.T.Ravikumar, learned standing counsel appearing for the appellant. 6. Even at the outset, this Court is of the considered opinion that there is no reason to differ from the finding of fact recorded by the CIT (Appeals) and the Tribunal in the present case, as the same is only a sequel to the earlier order in ITA No.1400/Mds/2009 in respect of the assessee's own case for the assessment year 2006-2007, wherein similar relief was granted in favour of the assessee. capital gains and, thereby, upheld the order of the CIT (Appeals). Aggrieved against the said order, the Revenue is before this Court by filing the present appeal. 5. Heard Mr.T.Ravikumar, learned standing counsel appearing for the appellant. 6. Even at the outset, this Court is of the considered opinion that there is no reason to differ from the finding of fact recorded by the CIT (Appeals) and the Tribunal in the present case, as the same is only a sequel to the earlier order in ITA No.1400/Mds/2009 in respect of the assessee's own case for the assessment year 2006-2007, wherein similar relief was granted in favour of the assessee. 7. Though a plea has been taken by the appellant in para-7 of the appeal memorandum that there was some material in the Director's report to show that there was business transaction, the same cannot be countenanced at this stage as that plea should have been raised at the appellate stage or before the Tribunal and no new fact can be canvassed at this belated point before this Court. 8. This Court is of the considered view that no questions of law, much less substantial questions of law arise for consideration in this appeal. Finding no merits warranting interference with the order of the Tribunal, the appeal is dismissed. Index : Yes/NoInternet : Yes/NoGLN (R.S.J.) (R.K.J.) 03.12.2014 To Commissioner of Income TaxChennai. 4 R.SUDHAKAR, J. AND R.KARUPPIAH, J. GLN T.C.A. NO. 638 OF 2014 03.12.2014