ITAT held in CIT( Kolkatta) Vs Merlin Holding Private Limited that it was the question of the fact to decide between the share income as an investment income or as a business income. Mere Frequency of the transactions in the shares did not determine the transaction to be business transaction or investment transaction.
Moreover if the Hon’ble tribunal had given its judgment then the same could not be change until and unless it was perverse judgment.
Facts of the case:
Assessee was certified Non-banking financial concern. Its main activity was giving and accepting of loan and investing in shares. It used to do sale/purchase of shares and had shown approx Rs 1,01,00,000/- as a capital gain but AO was of the view that it was business income not a investment income taxable under capital gain head. But CIT(A) and ITAT ordered in the favor of assessee considering all the proofs which assessee had produced before them. Revenue even after judgment of ITAT in the favor of assessee, again filed an appeal with ITAT. Now the main question was that whether the initial judgment given by the ITAT in the favor of assessee was perverse in nature.
Contention of the assessee:
Assessee was of the view that number and frequency of transactions was not a decisive factor to differentiate between the capital gain income and business income. When the assessee had induced proof to the revenue that some of the transactions were for investment purpose and some for business purpose and some for speculative purpose and revenue was unable to find any fault in that then the frequency of transactions or any other factor could not be a decisive factor.
Moreover ITAT was not required to give the reasons of the decision given by it because it was confirming the CIT(A) decision which was supported in the case of R. P.Bhatt Vs. Union of India reported in AIR 1986 SC 1040, in which it was decided that if the decision of the appellate authority was in agreement with the judgment then it was not required to give its own reasons.
Contention of the revenue:
Revenue was of the view that as MD of the company was also the MD in the company which was the broking agent of the assessee so, the income should be treated as a business income. Moreover in the A.Y 2005-06 more than 3 crore was on account of trading in shares and Rs 1 crore was on account of investment business so the above income should be treated be as a business income. There were 1000 of transactions related with the sale/purchase of shares so the same should be taxable under head income from business and profession.
Held by ITAT:
ITAT held that as the initial decision given by ITAT which was given in the favor of assessee on the facts which was also considered by CIT(A) was not perverse and moreover all the facts of the case had been considered while giving decision so the second appeal of the revenue could not be entertained and no point had left unattended so the appeal of the revenue was dismissed.