The Commissioner Of Income Tax, Patiala v. Amit Modi

CHANDIGARH ITA No. 691 of 2009 Date of Decision: 07.04.2010 The Commissioner of Income Tax, Patiala Versus Amit Modi …Appellant …Respondent CORAM:HON’BLE MR. JUSTICE M.M. KUMARHON’BLE MR. JUSTICE JITENDRA CHAUHAN Present:Ms. Urvashi Dhugga, Advocate,for the appellant-revenue. M.M. KUMAR, J. The instant appeal filed by revenue under Section 260A of theIncome-tax Act, 1961 (for brevity, ‘the Act’) is directed against the orderdated 27.4.2009, passed by the Income Tax Appellate Tribunal, ChandigarhBench (B), Chandigarh (for brevity, ‘the Tribunal’), in ITA No.650/Chandi/2008, in respect of the assessment year 2005-06. The short issue raised before us is whether the profitemerging from the investment in shares are to be regarded as businessincome or assessable under the head ‘capital gains’. The assessee-respondent is the Managing Director of M/s Chandigarh Distillers andBottlers Ltd. On the basis of the judgment of Hon’ble the Supreme Courtrendered in the case ofG. Venkataswami Naidu & Co. v. CIT, 35 ITR594 (SC), the Tribunal has held that no single factor is conclusive forinferring as a fact whether a particular transaction is an adventure in thenature of trade. Observing that the revenue could not prove that thetransactions of sale and purchase of shares undertaken by the assessee-respondent were an adventure in the nature of trade, the Tribunal in para 11 has held that the assessee-respondent invested in shares with the intentionof holding the same as investment and the surplus arising on the sale ofsuch investment has been rightly declared by the assessee-respondentassessable under the head ‘capital gains’. The view taken by the CIT (A)has been upheld. It has further been found that the income from theredemption of mutual funds declared by the assessee-respondent clubbingthe income of his minor daughters could not be treated as an income earnedas a dealer or a trade. It has been held that the same has been rightlyassessed under the head ‘capital gains’. Having heard learned counsel, we are of the considered viewthat the findings recorded by the Tribunal and affirming those of the CIT(A) are un-exceptionable. The Tribunal has discussed in para 8 variousrelevant factors to infer the intention and the nature of transactions andconcluded that by no stretch of imagination the surplus/account made by theassessee-respondent could be regarded as surplus from business of dealingwith shares. These are necessarily findings of fact. It is also concluded bythe Tribunal that the redemption of mutual funds by the assessee-respondentalong with the income of the minor daughters could also not be regarded astrade so as to reckon the same as business income. There is, thus, no meritin the appeal. No substantive question of law warranting its admissionwould arise. Dismissed. (M.M. KUMAR)JUDGE April 7, 2010Pkapoor (JITENDRA CHAUHAN)JUDGE