IN INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH I, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH, JUDICIAL MEMBER ITA NOS. 5481 TO 5483 & : (A.Ys : 2006-07 TO 2008-09 & 2012-13) 5487/MUM/2015 DCIT, Central Circle-7(3), Vs. Shri Pravinchandra N. Kamdar Mumbai (Appellant) 316, Loha Bhavan, P.D Mello Road, Carnac Bunder, Mumbai - 9 PAN : AADPK0725D (Respondent) Assessee by : Shri Paresh Shaparia Revenue by : Shri B.C.S. Naik Date of Hearing : 19/07/2016 Date of Pronouncement : 30/09/2016 ORDER PER G.S. PANNU, AM : These are bunch of four appeals by Revenue relating to single assessee for Assessment Years 2006-07, 2007-08, 2008-09 and 2012-13. In all appeals, issues raised by Revenue are similar, therefore, they have been clubbed and heard together and consolidated order is being passed for sake of convenience and brevity. 2. First, we may take up appeal of Revenue for Assessment Year 2006-07 which is directed against order of CIT(A)-49, Mumbai dated 07.09.2015, which in turn has arisen from order dated 30.03.2014 2 Shri Pravinchandra N. Kamdar ITA Nos. 5481 to 5483 & 5487/Mum/2015 passed by Assessing Officer, Mumbai under section 153A r.w.s 143(3) of Income Tax Act, 1961 (in short Act ). 3. In this appeal, Revenue has raised following Grounds of appeal :- 1. On facts and in circumstances of case and in law, CIT(A) erred in directing AO to assess income from purchase & sale of shares under head income from Short Term Capital Gain and Long Term Capital Gain and not business income as assessment had been finalized and not abated on account of search and relying on decision of Bombay High Court in case of All Cargo Global Logistics Ltd. without appreciating fact that decision of Bombay High Court in case of All Cargo Global Logistics Ltd. has not been accepted by department and SLP has been filed. 2. On facts and in circumstances of case and in law, CIT(A) erred in directing AO to assess income from purchase and sale of shares under head income from Short Term Capital Gain and Long Term Capital Gain and not business income relying on decision of ITAT in assessee s own case of A.Y 2007-08 without appreciating fact that decision of ITAT in assessee s own case for A.Y 2007-08 has not been accepted by department and appeal u/s 260 has been filed in High Court and same is pending. 4. Briefly put, relevant facts are that assessee individual, is connected to one K. Amishkumar Trading Pvt. Ltd. group, which was covered under search and seizure action carried out by Department u/s 132(1) of Act on 24.11.2011 in Bharti Shipyard Group of cases. As consequence, assessee was issued notice u/s 153A(1) of Act and in response, assessee filed return of income declaring total income of Rs.56,52,422/- which was same as 3 Shri Pravinchandra N. Kamdar ITA Nos. 5481 to 5483 & 5487/Mum/2015 declared by him in return filed u/s 139 of Act on 20.10.2006. return of income so filed by assessee was subject to scrutiny assessment by Assessing Officer u/s 153A r.w.s. 143(3) of Act whereby total income has been assessed at Rs.60,99,811/-. assessee carried assessment in appeal before CIT(A), who has allowed certain reliefs and Revenue is in appeal before us against order of CIT(A) on above stated Grounds of appeal. 5. Insofar as aforesaid Grounds are concerned, pertinent facts are that assessee had declared profit on sale and purchase of shares as Short Term Capital Gain Rs.50,37,333/- and Long Term Capital Gain Rs.2,18,682/-, which has since been treated by Assessing Officer as income liable to be taxed as Business income. This stand of Assessing Officer has since been negated by CIT(A), which is being assailed by Revenue before us. 6. Assessing Officer has treated income from sale and purchase of shares as Business income on ground that assessee has acted as trader in course of such activity and, therefore, according to Assessing Officer, such income was liable to be assessed as Business income. CIT(A) noticed that in assessment finalised u/s 143(3) of Act dated 14.11.2008 in pursuance to original return filed u/s 139(1) of Act on 20.10.2006, Long Term as well as Short Term Capital Gains earned on sale of shares has been accepted as such. CIT(A) further noticed that as on date of search, i.e., 24.11.2011 assessment for instant Assessment Year of 2006-07 was not pending and, therefore, same does not 4 Shri Pravinchandra N. Kamdar ITA Nos. 5481 to 5483 & 5487/Mum/2015 abate in terms of second proviso to Sec. 153A(1) of Act. For this reason, Assessing Officer held that following decision of Special Bench of Tribunal in case of All Cargo Global Logistics Ltd. v. DCIT, 137 ITD 287 (Mum-SB), Assessing Officer was required to assess income in assessment u/s 153A(1) r.w.s 143(3) of Act based only on incriminating material revealed in course of search. As per CIT(A), additions made to total income by treating income earned on capital gains as Business income was not on basis of any incriminating material found in course of search and, therefore, same could not have been added by Assessing Officer in assessment finalised u/s 153A(1) r.w.s. 143(3) of Act. Notably, decision of Special Bench of Tribunal in case of All Cargo Global Logistics Ltd. (supra) has since been affirmed by Hon'ble Bombay High Court in case reported at CCI Ltd. v JCIT, 250 CTR 291. It is also noticed that CIT(A) was conscious of decision of Tribunal in case of assessee for Assessment Year 2007-08 vide ITA No. 627/Mum/2011 dated 27.5.2014 wherein income of assessee from sale and purchase of shares has been held to be assessable as Capital Gains. 7. Before us, only point made by ld. DR, which is also manifested in Grounds of appeal, is that decision of Hon'ble Bombay High Court in case of All Cargo Global Logistics Ltd. (supra) has not been accepted by Department and further that decision of Tribunal in assessee s own case for Assessment Year 2007-08 relied upon by CIT(A) has also not been accepted by Department and appeal against it has been filed in Hon'ble High Court. 5 Shri Pravinchandra N. Kamdar ITA Nos. 5481 to 5483 & 5487/Mum/2015 8. Having regard to point raised by Revenue, we find no reason to interfere with conclusion of CIT(A). We have perused assessment order and find that there is no reference made to any material or evidence found in search, which has bearing on issue in order to treat Capital Gains declared by assessee to be assessed as Business income. Therefore, CIT(A) has correctly applied decision of Special Bench of Tribunal in case of All Cargo Global Logistics Ltd. (supra) which has further been approved by Hon'ble Bombay High Court. Thus, insofar as appeal of Revenue for Assessment Year 2006-07 is concerned, same is without any merits and is accordingly dismissed. 9. We may now take up appeal of Revenue for Assessment Year 2007-08 which is directed against order of CIT(A)-49, Mumbai dated 07.09.2015, which in turn has arisen from order dated 30.03.2014 passed by Assessing Officer, Mumbai under section 153A r.w.s 143(3) of Act. 10. In this appeal, Revenue has raised following Grounds of appeal :- "1. On facts and in circumstances of case and in law, CIT(A) erred in directing AO to assess income from purchase & sale of shares under head income from Short Term Capital Gain and Long Term Capital Gain and not business income as assessment had been finalized and not abated on account of search and relying on decision of Bombay High Court in case of All Cargo Global Logistics Ltd. without appreciating fact that decision of Bombay High Court in case of All Cargo 6 Shri Pravinchandra N. Kamdar ITA Nos. 5481 to 5483 & 5487/Mum/2015 Global Logistics Ltd. has not been accepted by department and SLP has been filed. 2. On facts and in circumstances of case and in law, CIT(A) erred in directing AO to assess income from purchase and sale of shares under head income from Short Term Capital Gain and Long term Capital Gain and not business income relying on decision of ITAT in assessee's own case of A.Y. 2007-08 without appreciating fact that decision of ITAT in assessee's own case for A.Y. 2007-08 has not been accepted by department and appeal u/s 260 has been filed in High Court and same is pending." 11. Grounds raised by Revenue in present appeal are similar to those raised in Assessment Year 2006-07. relevant facts in Assessment Year 2007-08 are that return was filed by assessee in response to notice u/s 153A(1) of Act declaring income at Rs.2,06,73,550/-, which was same as income declared in return of income originally filed u/s 139(1) of Act dated 25.10.2007. In ensuing assessment u/s 153A r.w.s. 143(3) of Act, Assessing Officer treated Short Term Capital Gain of Rs.48,98,969/- and Long Term Capital Gain of Rs.10,36,681/- as Business income. CIT(A) has since disagreed with Assessing Officer and held that profit received from sale of shares is liable to be assessed as Short Term Capital Gain or Long Term Capital Gain, depending upon period of holding of shares. In coming to such conclusion, CIT(A) has adopted same reasoning as he did for Assessment Year 2006-07, which we have already dealt with in earlier paras. 12. At time of hearing, both parties advanced similar arguments which have been considered by us in appeal for Assessment Year 7 Shri Pravinchandra N. Kamdar ITA Nos. 5481 to 5483 & 5487/Mum/2015 2006-07. learned representative for respondent-assessee pointed out that originally in assessment finalised u/s 143(3) of Act Short Term Capital Gain declared by assessee was treated as Business income by Assessing Officer, whereas Long Term Capital Gain declared by assessee was assessed as such. Tribunal in its order dated 27.5.2014 (supra) upheld stand of assessee and directed Assessing Officer to treat income from sale of shares as Capital Gains and not Business income. learned representative pointed out that in impugned assessment finalised u/s 153A(1) r.w.s. 143(3) of Act, Assessing Officer not only treated Short Term Capital Gain as Business income, but also Long Term Capital Gain as Business income. It was pointed out that there was no justification for such departure, as search did not reveal any incriminating material on this aspect. 13. Having regard to rival submissions, we find that appeal of assessee for Assessment Year 2007-08 is also liable to be decided in same manner as for Assessment Year 2006-07, which has been dealt with by us in earlier paras. Notably, finding of CIT(A) is that assessment for Assessment Year 2007-08 was also not pending on date of search, i.e., 24.11.2011. This CIT(A) s finding has not been negated by Revenue before us and under these circumstances, in our view, CIT(A) made no mistake in applying ratio of decision of Special Bench of Tribunal in case of All Cargo Global Logistics Ltd. (supra) in holding that instant addition was unsustainable as there was no incriminating material found in course of search in connection with such addition. 8 Shri Pravinchandra N. Kamdar ITA Nos. 5481 to 5483 & 5487/Mum/2015 14. In view of our decision in appeal for Assessment Year 2006-07 herein also, order of CIT(A) is affirmed and Revenue fails in its appeal. 15. In other two appeals, which relate to Assessment Year 2008- 09 and 2012-13, similarly worded Ground of appeal has been raised which reads as under :- 1. On facts and in circumstances of case and in law, CIT(A) erred in directing AO to assess income from purchase and sale of shares under head income from Short Term Capital Gain and Long term Capital Gain and not business income relying on decision of ITAT in assessee's own case of A.Y. 2007-08 without appreciating fact that decision of ITAT in assessee's own case for A.Y. 2007-08 has not been accepted by department and appeal u/s 260 has been filed in High Court and same is pending. 16. In these two years also, solitary dispute relates to treatment of income from sale and purchase of shares. assessee has declared such income as Short Term/Long Term Capital Gain whereas same has been assessed as Business income by Assessing Officer. CIT(A) has allowed claim of assessee based on decision of Tribunal in assessee s own case for Assessment Year 2007-08 (supra). Since said decision of Tribunal continues to hold field and has not been altered by any higher authority, we find no reason to interfere with decision of CIT(A). Thus, appeals of Revenue for Assessment Years 2008-09 and 2012-13 are also dismissed. 9 Shri Pravinchandra N. Kamdar ITA Nos. 5481 to 5483 & 5487/Mum/2015 17. Resultantly, all appeals of Revenue are dismissed. Order pronounced in open court on 30th September, 2016. Sd/- Sd/- (AMARJIT SINGH) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Date : 30th September, 2016 SSLCopy to : 1) Appellant 2) Respondent 3) CIT(A) concerned 4) CIT concerned 5) D.R, I Bench, Mumbai 6) Guard file By Order Dy./Asstt. Registrar I.T.A.T, Mumbai DCIT, Central Circle-7(3), Mumbai v. Pravinchandra N. Kamdar