The Commissioner Of Income Tax-19 v. Dr.ramesh C.shah

ASN IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 1063 OF 2011 The Commissioner of Income Tax-19. v. Dr.Ramesh C.Shah. ..Appellant. ..Respondent. Mr. Suresh Kumar for the Appellant. Mr. Vipul Joshi with Mr. P.C.Tripathi and Sameer G.Dalal for the Respondent. CORAM : J.P. DEVADHAR AND M.S. SANKLECHA, JJ. DATE : 4[th] February, 2013. PC: In this appeal by the revenue the basic issue is whether income earned by the respondent assessee is to be taxed on sale of shares as short term capital gain as contended by the assessee or income from business as contended by the revenue. 2)The respondent-assessee is Doctor by profession. In his return of income for assessment year 2004-05 the respondent ASN assessee declared short capital gain to the extent of Rs.70.43 lacs .The Assessing Officer held that the gain to the extent of Rs.55.18 lacs out of Rs.70.43 lacs has to be considered as business income and not as short term capital gain as the scrips were held for a period of less than six months. In appeal, CIT(Appeals) allowed the respondent-assessee's appeal. On further appeal by the revenue to the Tribunal, by the impugned order the Tribunal while upholding the order of the CIT(Appeals) relied upon CBDT Circular No.4-2007 dated 15/6/2007 and on the basis of tests laid down therein concluded that the gain on sale of shares is to be taxed as capital gain and not as business income. 3)The CIT (A) as well as the Tribunal found as a matter of fact that considering the CBDT circular and the test laid down therein the income earned on sale of shares would have to be taxed as gain from short term capital gain and not as business income. The Tribunal found that almost 95 % of the funds for investment in shares belongs to the assessee. Further, the shares were always shown as investment in his balance sheet and considered to be an investment. The dividend earned was Rs.8.36 lacs on the investment of Rs.2.77 crores also establishes that the intention of the respondent was to earn dividend income. Moreover, as observed by the CIT(A) the respondent-assessee was a busy Doctor and would not have time to deal in share transaction on day to day basis. Thus, the Tribunal on the above facts concluded that income earned on sale of shares held for less than six months are to be taxed under the head Capital Gain. Moreover, we are informed that even for the earlier assessment years gain on sale of shares has been taxed by the revenue as short term capital gain and not as business income. 4)In view of the fact that the decision of the Tribunal taxing the gain made on sale of shares under the capital gain is based on a concurrent finding of fact, no question of law arises. Thus, we do not entertain this appeal. 5)Accordingly, the appeal is dismissed with no order as to costs. (M.S.SANKLECHA, J.) (J.P. DEVADHAR, J.)