Madras High Court
The Commissioner Of Income Tax vs R.Raghavan on 18 June, 2021
T.C.A.No.732 of 2013
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATE: 18.06.2021
CORAM:
THE HON'BLE MR. JUSTICE M.DURAISWAMY
AND
THE HON'BLE MRS.JUSTICE R.HEMALATHA
T.C.A.No.732 of 2013
The Commissioner of Income Tax,
Chennai – 600 034. ... Appellant
Vs.
R.Raghavan ... Respondent
Appeal preferred under Section 260A of the Income Tax Act,
1961, against the order of the Income Tax Appellate Tribunal, Madras,
"D" Bench, dated 30.04.2013 in I.TA.No.1755/Mds/2012 for Assessment
Year 2005-06.
For Appellant : Mr.M.Swaminathan,
Senior Standing Counsel
For Respondent : Mr.Kaushik
for S.Sridhar
JUDGMENT
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T.C.A.No.732 of 2013
(Judgment was delivered by M.DURAISWAMY, J.)
Challenging the order passed in I.T.A.No.1755/Mds/2012 in
respect of the Assessment Year 2005-06 on the file of the Income Tax
Appellate Tribunal, “D” Bench, Chennai, the Revenue has filed the
above appeal.
2.The assessee filed return of income for the Assessment Year
2005-06 declaring a total income of Rs.2,01,19,494/-. The return of
income was processed under Section 143(1). The case was re-opened by
issuing notice dated 10.03.2010 under Section 148. A notice under
Section 142(1) was served on the assessee. The assessee is in the
business of trading of shares, mutual funds, futures, options and money
lending. The assessee filed the return of income for the Assessment Year
2005-06, 2008-09 and 2009-10 treating the gain arising from the sale of
shares as short/long term capital gains. For the Assessment Year 2005-
06, the case of the assessee was re-opened and notice under Section 148
was issued to the assessee on 10.03.2010. The Assessing Officer vide
assessment order dated 29.12.2010 passed under Section 143(3) read
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T.C.A.No.732 of 2013
with Section 147 of the Income Tax Act, 1961 held that the profit from
trading in shares, mutual funds, future, options and money lending is to
be treated as normal business income and thus is liable to be taxed at
30%. Aggrieved over the assessment order, the assessee preferred an
appeal before the Commissioner of Income Tax (Appeals) and the
Appellate Authority held that the profits arising from the sale of shares
held for more than 30 days is to considered as short or long term capital
gain depending upon the period of holding and in cases where shares
have been purchased and sold within 30 days, the profit arising from
such transactions should be considered as business income.
3.At the time of admission, the following substantial questions of
law arose for consideration:
1. Whether on the facts and in the circumstances of the
case, the Tribunal was right in holding that bonus
units of Chola Freedom STF Units is to be treated as
long term capital gains since the holding period is
more than 12 months?
2. Whether on the facts and in the circumstances of the
case, the Tribunal was right in allowing the appeal of
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T.C.A.No.732 of 2013
the assessee having come to the conclusion that
shares held for more than 30 days is to be treated as
capital gains and shares held less than 30 days is to
be considered as business income and such
bifurcation of 30 days is unsustainable?
4.The Tribunal found that there is nothing on record to show that
the assessee was maintaining separate books of account for trading in
shares and investment in shares. Further, the bonus units of shares were
allotted to the assessee on 26.02.2004 and the same were sold by the
assessee on 01.03.2005. Since the holding period is more than 12
months, the Tribunal has rightly come to the conclusion that the same has
to be treated as long term capital gains. We do not find any error or
irregularity in the findings of the Tribunal.
5.Mr.M.Swaminathan, learned senior standing counsel appearing
for the appellant-Revenue submitted that no finding need be given in
respect of the 2nd question of law and the same may be kept open.
6.As already the Tribunal has rightly decided the issue in favour of
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T.C.A.No.732 of 2013
the assessee, we do not find any ground much less any substantial
question of law to interfere with the order of the Income Tax Appellate
Tribunal.
7.With the above observations, the Tax Case Appeal is dismissed.
However, we are not giving any finding with regard to the 2nd question of
law and the 2nd question of law raised by the Revenue is left open and
may be decided in an appropriate appeal. No costs.
Index : Yes/No [M.D., J.] [R.H., J.]
Internet : Yes 18.06.2021
va
To
The Income Tax Appellate Tribunal, Chennai, "D" Bench
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T.C.A.No.732 of 2013
M.DURAISWAMY, J.
and
R.HEMALATHA, J.
va
T.C.A.No.732 of 2013
18.06.2021
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