IN INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH AHMEDABAD BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER, AND SHRI S. S. GODARA, JUDICIAL MEMBER. M.A. No. 139 Ahd 2016 [in ITA No.2374 Ahd 2012] (Assessment Year:2009-10) Darshan Naranbhai Patel 19,Royal Cresant Bunglows, Nr. Asopalv Bunglow, Tahltej, Ahmedabad 380 052 Appellant Vs. A.C.I.T., Circle-6, Ahmedabad Respondent PAN: ABCPP4905C By Assessee : Shri A. C. Shah, A.R. By Revenue : Shri Prasoon Kabra, Sr. D.R. Date of Hearing : 16.09.2016 Date of Pronouncement : 17.10.2016 ORDER PER S. S. GODARA, JUDICIAL MEMBER This assessee s Miscellaneous Application filed under Section 254(2) of Act seeks to rectify tribunal s order dated 29.06.2016 dismissing M.A. No.139 Ahd 2016 (Darshan N. Patel vs. ACIT) A.Y. 2009-10 -2- Revenue s main appeal on merits. Its pleadings in instant application read as under: 1. I am in receipt of Appellate Order dated 29-06-2016 on 19-07-2016. There are certain apparent mistakes in said order. 2. Hon'ble Tribunal has observed in Para No. 5 of IT AT Order as under: "5. Both parties heard. Case records perused. There is no dispute that assessee admittedly is trader in shares. instant litigation however does not arise from his trading transactions. dispute rather is that Revenue seeks to treat his profits I losses from share investments and redemption of investments as business income by giving colour of adventure in nature of trade to be involved therein.." 3. From above, it may please be seen that Hon'ble ITAT has given clear finding that "There is no dispute that assessee admittedly is trader in shares". In fact, assessee is not dealer in shares at all. He has invested his major funds in mutual funds and only negligible funds for giving to PMS. Kindly see statement of income given from Page No. 11 to 16 in Paper Book dated 27-02-2013 filed with ITAT. only source of income is LTCG STCG & income from other sources and that there is no business income whatsoever. 4. Therefore, there is contradiction in finding of IT AT. In fact, there is factual error. What should have been mentioned in finding that "There is no dispute that assessee admittedly investor in mutual funds". 5. Similarly, it is stated in ITAT Order in Para No. 5 3rd line that "The dispute rather is that Revenue seeks to treat his profits I losses from share investments and redemption of investments as business income by giving colour of adventure in nature of trade to be involved therein " 6. It would be better if language used is redemption of investments in mutual funds. In fact, entire finding in Para No.5 is about shares and not about mutual funds as can be seen from Para No. 6 of ITAT Order as under: "6. We proceed further and notice from assessee's investment chart regarding long and short term capital gains that most of investments have seen holding period for quite longer duration. There is very miniscule percentage of share investments being made and sold in very short span of time less than week. assessee's long term capital gains from investment held for much longer duration of more than year." 6.1 From Para No. 5 & 6 of IT AT Order, reader gets impression that assessee is investor in shares and that duration of holding period is M.A. No.139 Ahd 2016 (Darshan N. Patel vs. ACIT) A.Y. 2009-10 -3- long. In fact, assessee is investor in mutual funds and so far as shares are concerned, they are only through PMS and that assessee himself has not purchased or sold shares on his account. Therefore, assessee placed reliance on Delhi High Court judgement in case of Yama Finance Ltd. V s. ACIT 224 Taxman 260. relevant catch-note is reproduced as under: " Whether units of mutual funds is special category of "investments" and investment in mutual funds cannot be clubbed with investment in shares or commodities - Held, Yes" 6.2 In fact, as stated above as per statement of income from Page No. 11 to 16 of paper book dated 27-02-2013 filed with ITAT. major funds are invested in mutual funds and LTCG and STCG is also from mutual funds. transactions in PMS shares are negligible. Therefore, stress should be given about investments in mutual funds rather than shares as is seen from finding from Para No. 5 & 6 of ITAT Order. 7. This being factual mistake, your honours are prayed to modify order by without making any changes in outcome of appeal that appeal of Revenue is dismissed. 2. We have heard both parties. Case file perused. There is no dispute about factual position that we have held assessee to be trader in shares and mutual funds. Ld. counsel takes us to his grounds of appeal statement of facts form no.35 raising categoric plea that assessee is investor only. His further case is that this crucial statement of fact has neither been rebutted in lower appellate order nor before tribunal. assessee invites our attention to his statement of income as well (supra). Ld. counsel states that assessee is merely investor in mutual funds forming subject matter of adjudication in main appeal and same are not traded but redeemed. We find that CIT(A) s findings in para 2-4 also treat assessee as investor only instead of share trader. Ld. Departmental Representative fails to lead us to any material in case file which could indicate assessee to have traded in shares mutual funds in question. We accordingly find force in assessee s submission as pleaded in instant miscellaneous application. It is accordingly directed that our findings in order dated 29.06.2016 treating assessee as shares mutual funds trader M.A. No.139 Ahd 2016 (Darshan N. Patel vs. ACIT) A.Y. 2009-10 -4- instead of investor shall stand recalled as prayed for. Ordered accordingly. 3. This assessee s Miscellaneous Application is allowed in above terms. [Pronounced in open Court on this 17th day of October, 2016.] Sd - Sd - (PRAMOD KUMAR) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad: Dated 17 10 2016 True Copy S.K.SINHA Copy of Order Forwarded to:- 1. Revenue 2. Assessee 3. Concerned CIT 4. - CIT (A) 5. , , DR, ITAT, Ahmedabad 6. Guard file. By order , , Darshan Naranbhai Patel v. A.C.I.T., Circle-6, Ahmedabad