ITAT upheld CIT(A)’s order allowing capital gains

1. Sh Nemichand P Jain declared total income of Rs 25 lakhs.

2. Assessment u/s 143(3) (of Income Tax Act, 1961) was completed by AO determining the total income at Rs 52 lakhs.

3. AO observed that assessee had received short term capital gain of Rs 38 lakhs and long term capital gain of Rs 10 lakhs.

4. AO asked assessee to explain as to why such capital gain should not be tax as business income.

5. AO treated the short term capital gain and long term capital gain as business income of assessee and added the same to the total income of assessee.

6. CIT(A) allowed assessee’s appeal.

On appeal, the ITAT held as under:

7. In view of this CIT(A) appeal was justified in observing that income return by assessee short term and long term capital gains has to be assessed under the respective heads as claimed by assessee and not business income.

8. Further, the assessee has consistently shown short term capital gain/short term capital loss as well as long term capital gain/long term capital loss in all these years.

9. In fact, the gross long term capital gain earned by assessee is over Rs.16.72 lakh which indicates that assessee has been a long term investor in shares.

10. In view of above CIT(A) was justified in directing to assessee long term capital gain under respective heads.

Case Reference - ACIT Vs. Shri Nemichand P Jain.

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI "B" BENCH, MUMBAI

BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER,

AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER.

ITA. No. 7159/Mum/2013

(Assessment Year: 2010-11)