Itxa/191/2011 Of The Commissioner Of Income Tax - 13 Mumbai v. Milan D. Shah

sas IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.191 OF 2011 The Commissioner of Income Tax-13, Mumbai ..Appellant. V/s. Shri Milan D. Shah ..Respondent. Mr. Suresh Kumar for the appellant. Mr. Prakash Shah with Jas Sanghvi i/b. PDS Legal for the respondent. CORAM : J.P. DEVADHAR AND K.K. TATED, JJ. DATED : 5TH SEPTEMBER, 2011 P.C. :- 1.Four questions of law are raised by the revenue in this appeal, which read thus :- (a)Whether on the facts and circumstances of the case and in law when the income of the assessee from profit on sale at Rs.48,31,973/- in short interval, the profit on sale of shares is business income and not income from investment under head of Capital Gain as claimed by the assessee "when the income of the assessee from profit on sale at Rs.48,31,973/- in short interval, the profit on sale of shares is business income and not income from investment under head of Capital Gain as claimed by the assessee " (b)Whether on the facts and circumstances of the case and in law, the ITAT was justified in holding that the income of the assessee from sale of share in high volume in short period is capital gain and assessee is entitled for concessional rate u/s. 111A and 112 ?the ITAT was justified in holding that the income of the assessee from sale of share in high volume in short period is capital gain and assessee is entitled for concessional rate u/s. 111A and 112 ? (c)Whether on the facts and circumstances of the case and in law, the ITAT was justified in holding that right to get the flat cannot be said that the transfer of the tenancy rights right took place, whereas it is well settled position that receipt on account of surrendering the tenancy rights are Capital in nature and taxable as capital gains ? (d)Whether on the facts and circumstances of the case and in law, the ITAT was justified in holding that the arbitrage loss was towards derivative transactions and same can be allowed to be set against business income. 2.The appeal is admitted on the above questions and by consent taken up for final hearing. 3.As regards questions (a) & (b) are concerned, counsel for the parties state that the said questions have been answered in favour of the assessee in the assessee's own case in Income Tax Appeal (Lod) No.2238 of 2011 and Income Tax Appeal (Lod) No.2239 of 2010 decided on 22nd July, 2011. Accordingly, the above two questions are answered in favour of the assessee. 4.As regards question (c) is concerned, the dispute relates to the capital gains liability in respect of the premises received by the assessee in lieu of surrendering the tenanted premises. Admittedly, the premises received on surrender of tenancy rights have been sold during AY 2006-07 and the capital gains arising from such sale have been offered to tax and duly assessed. Therefore, the decision of the Tribunal in holding that the capital gains accrued to the assessee in the year in which the premises were sold and not in the year in which the premises were received on surrender of tenancy rights cannot be faulted. Accordingly, the question 'C' is answered in favour of the assessee. 5.As regards question (d) is concerned, counsel for the parties state that the said question is answered in favour of the revenue by the decision of his Court in CIT V/s. BharatR. Ruia (HUF) reported in (2011) 241 CTR 1 (Bom). Accordingly, question (d) is answered in favour of the Revenue. 6.The appeal is disposed off accordingly with no order as to costs. (K.K. TATED, J.) (J.P. DEVADHAR, J.)