|CORAM:||M. Balganesh (AM), S. S. Viswanethra Ravi (JM)|
|SECTION(S):||10(38), 28, 45, 48|
|CATCH WORDS:||Business profits, capital gains, Profit on sale of shares|
|DATE:||January 27, 2017 (Date of pronouncement)|
|DATE:||January 30, 2017 (Date of publication)|
|FILE:||Click here to download the file in pdf format|
|S. 10(38): If the AO has accepted the claim for exemption for long-term capital gains and conceded that the assessee is an "investor", he cannot change his stand and treat the assessee as a "trader" in respect of the claim of short-term capital gains alone|
(i) We find that the AO having accepted the claim of exemption u/s 10(38) of the Act for long term capital gains of the assessee had conceded the claim of assessee to be an investor and the AO cannot take a different stand by treating the assessee as a trader in respect of short term capital gains alone.
(ii) We find that the assessee had earned dividend income to the tune of Rs. 2,33,98,095/- which is very substantial indicating the assessee’s intention to always remain as an investor and not to exit the scrip with a short term profit motive.
(iii) We also find that the assessee had been consistently showing the amount invested in shares and mutual funds under the head ‘investments’ in its books of accounts and there are no borrowings in the balance sheet filed by the assessee for the earlier years. These facts are not controverted by the revenue before us. We find that the revenue had already accepted the assessee to be an investor in the earlier years even in the scrutiny assessments framed u/s 143(3) of the Act for the Asst Years 2004-05 and 2005-06. Though the principle of resjudicata is not applicable in income tax proceedings, the principle of consistency cannot be given a goby in the absence of any changed circumstances. Reliance in this regard is placed on the decision of the Hon’ble Supreme Court in the case of Radhasaomi Satsang reported in 193 ITR 321 (SC). We find that the reliance placed on the various decisions by the ld AR are very well founded.