Stay against Income Tax Demand if Assessee not produced his Present financial position?

The ld. Counsel for assessees submitted that there are number of judgments from the ITAT on the issue of treating the portfolio management income assessable as capital gains and not as income from “business or profession”.

Further assessee is an investor for long period and the long term capital gain arose from the transactions of purchase of shares in year 2004 and in earlier years these incomes were accepted as capital gains only. However, the present financial position of assessee was not furnished before us. After considering the rival arguments, we are of the view that the stay as prayed cannot be granted but an early hearing can be granted considering the facts of the case. Accordingly the cases are posted on 30.04.2012 which was informed to both parties in the open Court.

INCOME TAX APPELLATE , MUMBAI

S.A. No. 129/Mum/2012

Arising out of ITA No. 1575/Mum/2012

Assessment Year: 2007- 08

Mr. Nalin P. Shah Vs. Addl. Commissioner of Income Tax,

S.A. No. 130/MUM/2012

Arising out of ITA No. 1594/Mum/2012

Assessment Year: 2007- 08

Mr. Manan Nalin Shah Vs. Addl. Commissioner of Income Tax,

Date of pronouncement 13.04.2012 

O R D E R

PER B. RAMAKOTAIAH, A.M.

These two stay applications are connected and issues are similar. These stay applications are preferred by assessees on the issue whether the long term capital gains and short term capital gains offered should be treated as business income or profession. The A.O. treated the gain on transactions as “business income” whereas according to assessee he has been investing in shares number of years and the long term capital gain and short term capital gain also involves portfolio management income which cannot be considered as business income. The ld. Counsel for assessees submitted that there are number of judgments from the ITAT on the issue of treating the portfolio management income asses sable as capital gains and not as income from “business or profession”. Further assessee is an investor for long period and the long term capital gain arose from the transactions of purchase of shares in year 2004 and in earlier years these incomes were accepted as capital gains only. However, the present financial position of assessee was not furnished before us. After considering the rival arguments, we are of the view that the stay as prayed cannot be granted but an early hearing can be granted considering the facts of the case. Accordingly the cases are posted on 30.04.2012 which was informed to both parties in the open Court.

2. In the result, the stay applications filed by assessees are accordingly dismissed.

Order pronounced in the open court at the time of hearing itself i.e. on 13.04.2012.