Amrit Lal Batra v. Addl. CIT - Taxpublishers.in

Case Laws Analysis
REFERRED Yamini Khandelwal v Asstt CIT 2022 TaxPub(DT) 7810 (Kol-Trib)
REFERRED Dy. CIT v. Anil Dhirajlal Ambani 2018 TaxPub(DT) 2994 (Mum-Trib)
REFERRED Pr. CIT v. Bhanuprasad D. Trivedi (HUF) 2017 TaxPub(DT) 4295 (Guj-HC)
REFERRED CIT v. Vinay Mittal 2012 TaxPub(DT) 2360 (Del-HC)
REFERRED CIT v. S.K. Kaintal 2010 TaxPub(DT) 0390 (P&H-HC)
REFERRED CIT v. Rewashanker A. Kothari 2006 TaxPub(DT) 1357 (Guj-HC)
REFERRED CIT v. Delhi Safe Deposit Co. Ltd. 1982 TaxPub(DT) 0990 (SC)

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The Tax Publishers2024 TaxPub(DT) 1148 (Asr-Trib) IN THE ITAT, AMRITSAR BENCH M.L. MEENA, A.M. & ANIKESH BANERJEE, J.M. Amrit Lal Batra v. Addl. CIT ITA No. 211/ASR/2013 & ITA No. 482/ASR/2014 6 October, 2023 Appellant by: Sudhir Sehgal, A.R. Respondent by: Manoj Aggarwal, Sr. D.R. ORDER *M.L. Meena, A.M.* Both the captioned appeals have been filed by the assessee against the order of the learned Commissioner (Appeals) National Faceless Appeal Centre (NFAC), Delhi dated 16-3-2023 in respect of assessment year 2018-19. 2. At the outset, the learned counsel for the appellant assessee submitted that the Honble High Court of Jammu and Kashmir vide its Judgment delivered on 14-7-2017 has remitted the matter back to the Tribunal in respect of the assessment year 2007-08 vide Para 5 by observing that since, we are in any event remitting the matter with regard to the nature of the transaction concerning the sale and purchase of shares, we also set-aside the finding with regard to legal expenses and that also ought to be considered afresh. Parties shall be entitled to raise all contentions available to them in law. 3. Thus, the Honble Jurisdictional High Court has remitted the matter regarding the nature of the transaction in respect of the sale and purchase of shares, and also set-aside the finding with regard to legal expenses to be considered afresh. 4. The appellant assessee is a Proprietor who has filed return of income showing income of Rs. 1,15,18,020. However, the said Return of income was revised at total income of Rs. 1,08,55,610. During scrutiny assessment, the income was assessed at Rs. 1,37,62,030 vide Assessment order dated 30-12-2009. The learned Commissioner (Appeals) has partly granted relief in respect of expenses claimed vide Order dated 14-1-2013. On filing appeal before the Honble Income Tax Appellate Tribunal, Amritsar Bench, in ITA No. 211/ASR/2013, the appeal of the Assessee was allowed vide Order dated 27-6-2013. 5. The department being aggrieved with the Tribunal order, has filed an appeal before the Honble High Court against the above said order which has been set aside to the Honble Bench on the issues of treatment of income from sale and purchase of shares whether to be considered as business income or as income from capital gains and also on the issue of disallowance of legal expenses. 6. First, we take up the Issue with regard to treatment of purchase and sale of shares as adventure in the nature of trade i.e. Business income or income from capital gains. The Honble High Court set aside the matter by observing vide Para 4 and 5 of its judgement as under: 4. The tribunal while examining the issue has referred to a decision of the Delhi High Court in the case of CIT v. Vinay Mittal: (2012) 208 Taxman 106 (Delhi) : 2012 TaxPub(DT) 2360 (Del-HC). In that decision, there is also a reference to a Gujarat High Court decision in case of CIT v. Rewashanker A. Kothari: (2006) 283 ITR 338 (Guj) : 2006 TaxPub(DT) 1357 (Guj-HC), wherein various tests were formulated in order to determine whether an assessee could be said to be carrying on the business of sale and purchase of various securities or whether the said assessee was holding them as an investment. One of the most important tests outlined in that decision was as to whether the transactions in the shares were of a large volume and was frequent and whether there was continuity and regularity in such transactions of purchase and sale. It was noted that if there was repetition and continuity coupled with the magnitude of the transactions bearing a reasonable proportion to the holding then it would be an important circumstance in considering such activity to be in the nature of trade and business. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2024 TaxPub(DT) 1148 (Asr-Trib)

IN THE ITAT, AMRITSAR BENCH

M.L. MEENA, A.M. & ANIKESH BANERJEE, J.M.

Amrit Lal Batra v. Addl. CIT

ITA No. 211/ASR/2013 & ITA No. 482/ASR/2014

6 October, 2023

Appellant by: Sudhir Sehgal, A.R.

Respondent by: Manoj Aggarwal, Sr. D.R.

ORDER

M.L. Meena, A.M.

Both the captioned appeals have been filed by the assessee against the order of the learned Commissioner (Appeals) National Faceless Appeal Centre (NFAC), Delhi dated 16-3-2023 in respect of assessment year 2018-19.

2. At the outset, the learned counsel for the appellant assessee submitted that the Honble High Court of Jammu and Kashmir vide its Judgment delivered on 14-7-2017 has remitted the matter back to the Tribunal in respect of the assessment year 2007-08 vide Para 5 by observing that since, we are in any event remitting the matter with regard to the nature of the transaction concerning the sale and purchase of shares, we also set-aside the finding with regard to legal expenses and that also ought to be considered afresh. Parties shall be entitled to raise all contentions available to them in law.

3. Thus, the Honble Jurisdictional High Court has remitted the matter regarding the nature of the transaction in respect of the sale and purchase of shares, and also set-aside the finding with regard to legal expenses to be considered afresh.

4. The appellant assessee is a Proprietor who has filed return of income showing income of Rs. 1,15,18,020. However, the said Return of income was revised at total income of Rs. 1,08,55,610. During scrutiny assessment, the income was assessed at Rs. 1,37,62,030 vide Assessment order dated 30-12-2009. The learned Commissioner (Appeals) has partly granted relief in respect of expenses claimed vide Order dated 14-1-2013. On filing appeal before the Honble Income Tax Appellate Tribunal, Amritsar Bench, in ITA No. 211/ASR/2013, the appeal of the Assessee was allowed vide Order dated 27-6-2013.

5. The department being aggrieved with the Tribunal order, has filed an appeal before the Honble High Court against the above said order which has been set aside to the Honble Bench on the issues of treatment of income from sale and purchase of shares whether to be considered as business income or as income from capital gains and also on the issue of disallowance of legal expenses.

6. First, we take up the Issue with regard to treatment of purchase and sale of shares as adventure in the nature of trade i.e. Business income or income from capital gains. The Honble High Court set aside the matter by observing vide Para 4 and 5 of its judgement as under:

4. The tribunal while examining the issue has referred to a decision of the Delhi High Court in the case of CIT v. Vinay Mittal: (2012) 208 Taxman 106 (Delhi) : 2012 TaxPub(DT) 2360 (Del-HC). In that decision, there is also a reference to a Gujarat High Court decision in case of CIT v. Rewashanker A. Kothari: (2006) 283 ITR 338 (Guj) : 2006 TaxPub(DT) 1357 (Guj-HC), wherein various tests were formulated in order to determine whether an assessee could be said to be carrying on the business of sale and purchase of various securities or whether the said assessee was holding them as an investment. One of the most important tests outlined in that decision was as to whether the transactions in the shares were of a large volume and was frequent and whether there was continuity and regularity in such transactions of purchase and sale. It was noted that if there was repetition and continuity coupled with the magnitude of the transactions bearing a reasonable proportion to the holding then it would be an important circumstance in considering such activity to be in the nature of trade and business.