Tribunal held that assessee was treated as an investor since AY 1998-99 and even in the year under consideration the department has not disturbed the head of Long Term Capital Gains (‘LTCG’) claimed as ‘exempt’ by the assessee. Tribunal acknowledged that the profit on sale of investments was only 2% of total revenues generated by the assessee. Further the ratio of average investment (except investment in group concerns) to average total assets was less than 2% and more than 92% of assessee’s total assets were deployed in the business of financing. Further, Tribunal noted that in all earlier years, STCG was assessed to tax as capital gains only. 

Tribunal relied on the decision of Gopal Purohit v. JCIT (2009) 29 SOT 117 (Mum) (Trib) as confirmed by Hon’ble Bombay High Court in CIT v.Gopal Purohit (2011)336 ITR 287 ( Bom) (HC). Further the SLP of the department against the same has been dismissed by Hon’ble Apex Court vide order dt. 15/11/2010. Tribunal held that in the said case, the court directed to follow the rule of consistency if facts are not changed. The said decision was on similar issue as in the present case. Accordingly, Tribunal directed to tax the STCG as income from capital gains. ( AY.2005 -06 to 2007 -08)