IN THE ITAT MUMBAI BENCH ‘B’
Manish P. Gandhi V/s. ACIT
IT APPEAL NOS. 5290 (MUM.) OF 2008 & 6430 (MUM.) OF 2009
[ASSESSMENT YEARS 2005-06 & 2006-07]
Date of pronouncement – 29.07.2011
ORDER
N.V. Vasudevan, Judical Member
ITA No.5290/M/08 is an appeal by the assessee against the order dated 11/6/2008 of CIT(A) 25, Mumbai relating to assessment year 2005-06, while ITA No.6430/M/09 is an appeal by the revenue against the order dated 29/9/2009 of CIT(A)-35, Mumbai relating to assessment year 2006-07. We shall first take up for consideration appeal by the assessee for assessment year 2005-06 in ITA No.5290/M/08.
2. The assessee in this case is an individual. The assessee filed return of income for assessment year 2005-06, wherein he declared income from Long Term Capital Gain(long term capital gains) and Short Term Capital Gain(STCG) as follows:
“II. Income From Capital Gains
| Long Term Capital Gain (from 1/4/2004 to 30/9/2004) | 1,850,732 | |||
| Less: Exempt u/s.10(36) Being (BSE 500 scrip) | 1,850,732 | NIL | ||
| Long Term Capital Gain (from 1/4/2004 To 31/3/2005) |
2,079,230 | |||
| Less: Exempt u/s.112 | 2,079,230 | NIL | ||
| Short Term Capital Gain (from 1/4/2004 To 30/9/2004) |
1.119.956 | |||
| Short Term Capital Gain (from 1/10/2004 To 31/3/2005) |
3,857,123 | 4,977,080″ |
3. The question before the AO was as to whether the income declared by the assessee under the head income from capital gain has to be assessed as income from business or income from capital gain. While deciding this issue the AO has referred to the transaction and the profit made by the assessee as follows:
“In the return of income assessee has declared income from business and profession at Rs. 7,47,743/-, income from capital gains upto 30.9.04 Rs. 13,66,398/- short term capital gains after 1.10.2004 at Rs. 17,92,538/-, and income from other sources at Rs. 36,014/-.
In the income and expenditure account filed along with the return of income assessee has credited the following amounts:
