The Commissioner Of Income Tax-25 v. Dilip V.variya

ASN IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1088 OF 2011 The Commissioner of Income Tax-25.v. Dilip V.Variya. ..Appellant. ..Respondent. Mr.Tejveer Singh for the Appellant.None for the Respondent. CORAM : J.P. DEVADHAR AND M.S. SANKLECHA, JJ. DATE : 09TH JANUARY, 2013 PC: This appeal by the revenue under section 260A of the Income Tax Act, 1961 challenges the order dated 24/3/2010 of the Income Tax Appellate Tribunal relating to assessment year 2005-06. 2)The revenue has formulated the following questions of law for consideration by this Court. a)Whether on the facts and circumstances of the case and in law, the Tribunal is right in law in upholding the order of CIT(A) whereby directing the A.O. to assess income from share investment activities as short term and long term capital gain instead of business income without appreciating that the assessee has substantial volume and huge number of share transactions and repeated transactions in single scrips, which denote that the motive of the assessee is to carry on business in shares rather than investment in shares to earn dividend? b)Whether on the facts and circumstances of the case and in law, the Tribunal is in law in upholding the CIT(A)'s order that the assessee indulged in investment in shares without considering that the assessee has devoted most of his time in only one activity i.e. activity of earning profit through sales and purchase of shares, be it derivatives, intra day trading or purchase and sale within short period or long period? c)Whether on the facts and circumstances of the case and in law the Tribunal in holding that the entire profits arising out purchase and sale of all shares assessed under the head “income from business and profession” by the AO be treated as investm3ent and the benefit of indexation and exemptions on the share investments claimed as long terms investments be allowed? 3)The dispute in the present case is whether the income earned from the sale of shares is admissible as business income under the head capital gain. It is the case of the revenue that the Assessing officer taking into account the volume and turn over coupled with period of share holding and the value of transaction in shares concluded that the respondent assessee was carrying on share trading business. Thus, the income was liable to tax under the head profit and gains of business. 4)However, both the Commissioner of Income Tax (Appeals) as well as Tribunal have recorded a finding of fact that the respondent assessee was carrying business of investment in shares for last 30 years and for the last 25 years was assessed to tax under the head capital gains and not under the head of profit and gains of business by the revenue. The revenue never treated the shares as stock in trade of the respondent assessee. This finding that the respondent assessee is not carrying on business of shares trading is a concurrent finding of fact arrived at and both by the CIT (Appeals) and the Tribunal. The appellant revenue has not been able to show that this finding of fact is perverse. In the circumstances, no question of law arises. 4)In view of the above, the appeal is dismissed with no order as to costs. (M.S.SANKELCHA, J.) (J.P. DEVADHAR, J.)