S. 263 : Commissioner – Revision of orders prejudicial to revenue-Capital gains – Business income from share transactions – Principle of consistency to be followed – Once similar income was accepted as capital gains in earlier and subsequent years, same cannot be assessed as business income in the year under consideration merely on the basis of earlier adverse view- Order of Tribunal quashing the revision order is affirmed. [S. 10(38), 45, 68 , 94(7) 111A, 260A ]
The assessee had shown income from share transactions as Short Term Capital Gain taxable u/s 111A and Long Term Capital Gain exempt u/s 10(38). The CIT invoked revision u/s 263 and directed the AO to assess the said income as business income. The Tribunal held that the assessee’s claim of STCG and LTCG was supported by bank account, DEMAT account and books of account and that similar treatment had been accepted in A.Y. 2007-08 and again in A.Y. 2014-15. Applying the principle of consistency, the Tribunal held that the income from share transactions was assessable as capital gains and not as business income. The issues relating to disallowance u/s 94(7), addition u/s 68 and addition on account of low withdrawals were restored to the AO for fresh verification. On appeal by the Revenue, the Bombay High Court held that the issue stood covered by the earlier judgment in assessee’s own case In PCIT v. Sarah Faizal Hawa (Smt.) ITA No 837 of 2015 dated 30th January, 2018 (Bom)(HC) and therefore the substantial question of law did not survive. Accordingly, the appeal of the Revenue was disposed of. (AY. 2008 -09 ) (ITXA No. 2633 of 2018, dt. 12-03-2026)
PCIT v. Sarah Faisal Hawa (Bom)(HC) www.itatonline.org .
[Coram : Hon’ble Shri Justice Suman Shyam & Hon’ble Shri Justice
Shyam C. Chandak]