COMMISSIONER OF INCOME-TAX Vs. HARIT EXPORTS LTD.

JUDGEMENT

(1.) This appeal by the revenue challenges the order passed by the Income Tax Appellate Tribunal, Bench Mumbai, dated 29th June, 2001. The assessment year in question is 2005-06. Mr. Malhotra, learned counsel, appearing on behalf of the revenue submits that the appeal raises three substantial questions of law. They are formulated by the revenue in the present memo of appeal itself and in that regard our attention was invited to para-6.1, 6.2 and 6.3. They read as under:

(2.) In regard to the first question, Mr. Malhotra submits that the Tribunal was in complete error in reversing and upsetting the concurrent finding of facts. The transaction has not been appreciated in the proper perspective. In that regard, our attention has been invited by Mr. Malhotra to the order of the Assessing Officer and his findings at page 24 and 25 of the paper book. It is submitted that the assessee has declared his business that of dealing in shares, debentures, derivatives and units of mutual fund. It had declared a short term capital gain and a long term capital gain. It had declared business income from dealing in shares and a sum of Rs. 6,15,414/- as profits and gains of speculation business. Thus, the details were perused and what has come to notice of the Assessing Officer is the huge turnover. The sale and purchase of shares as detailed by the assessee and referred by the Assessing Officer would show that the transactions in the investment account are not isolated and with an intention to have any controlled stake in a enterprise or to enjoy fruits thereof. The assessee entirely devotes time to purchase and sale of shares. The scale of operation is huge. The assessee has held little over 4 scrips for a period of more than 6 months during the year and 5 scrips have been held for 3 to 5 months, while the remaining have been sold within a period of 30 days. The assessee, therefore, had no intent of holding on to the shares. The assessee has made massive borrowing to fund the investment portfolio so as to fulfil the requirement of trading. The details of borrowing are referred by Mr. Malhotra and he submits that the Assessing Officer has rightly summed up the calculation at running page 28 para 3.10 of his order. These findings of fact have been affirmed by the Commissioner and with regard to para-1.5 of the Commissioner's order, running page 44 has been referred to. Mr. Malhotra, therefore, submits that after referring to the tests laid down in the decisions of the Supreme Court, that the Tribunal has failed to note is that mere treating the transaction separately in the books of account would not assist the assessee in this case. These are not matters which the Tribunal could have reconsidered by re-appreciating and reappraising the factual materials. If the Tribunal does not hold that the concurrent findings are perverse, then, all the more, this question is a substantial question of law.

(3.) As far as question at para-6.2 is concerned, it is conceded by Shri Malhotra that the same is covered against the revenue and in favour of the assessee by a judgment of this Court in the case of Godrej & Boyce Mfg. Co. (P.) Ltd. v. Dy. CIT, 2010 328 ITR 81