Sponsored
    Follow Us:

Case Law Details

Case Name : ACIT Vs. Shri Sachin R. Tendulkar (ITAT Mumbai)
Appeal Number : ITA No.3217/Mum/2014 and ITA No. 1411/Mum/2015
Date of Judgement/Order : 25/01/2017
Related Assessment Year : 2010-11 and 2011-12
Become a Premium member to Download. If you are already a Premium member, Login here to access.
Sponsored

The income arising on account of sale -purchase of shares if assessed under the head of capital would of course be taxable at relatively lower rate of tax and is also exempt in some cases, as compared to the business income which is taxable at relatively higher rate of tax. But, if such income is assessable under the head income from business then the assessee would be entitled for claim of set of expenses incurred in the normal course of business to earn such income and the tax would be payable only on the amount of net profit. Therefore, while drafting the provisions the legislature did not make any water tight rule for determination of nature of income arising from purchase and sale of shares to be assessed under the head of capital gains or business income. It has been left upon the wisdom of the assessee and facts and circumstances of the case. Under these circumstances, if assessee has chosen a particular course after deciding all the pros and cons of both the options available to it and if the choice has been exercised in a bonafide manner, the Board has advised as discussed above that the AO does not have liberty under the law to thrust his opinion upon the assessee, so long as the assessee follows his choice on consistent basis.

It is apparent that the assessee had adopted a particular course. He explicitly categorised the amount invested in shares as part of ‘investments’ and not as part of ‘stock-in-trade’. In our considered opinion, AO’s allegation that assessee did not make ‘investment’ into shares but carried it out as business activity merely relying upon factors like volume or frequency of transactions alone, was not in accordance with law and facts of this case.

EXTRACT OF THE JUDGMENT

These appeals pertain to same assessee for the two different years involving identical issues, therefore, these were heard together and being disposed of by this common order:

2. During the course of hearing, arguments were made by Shri Jitendra Jain, Authorised Representatives (AR) on behalf  of the Assessee and by Shri TA Khan, Departmental Representative (DR) on behalf of the Revenue.

Please become a Premium member. If you are already a Premium member, login here to access the full content.

Sponsored

Join Taxguru’s Network for Latest updates on Income Tax, GST, Company Law, Corporate Laws and other related subjects.

Leave a Comment

Your email address will not be published. Required fields are marked *

Sponsored
Sponsored
Search Post by Date
July 2024
M T W T F S S
1234567
891011121314
15161718192021
22232425262728
293031