COMMISSIONER OF INCOME TAX Vs. AMIT MODI

JUDGEMENT

(1.) The instant appeal filed by the Revenue under Section 260A of the Income-tax Act, 1961 (for brevity, "the Act") is directed against the order dated April 27, 2009, passed by the Income-tax Appellate Tribunal, Chandigarh Bench (B), Chandigarh (for brevity, "the Tribunal"), in I. T. A. No. 650/Chandi/2008, in respect of the assessment year 2005-05.

(2.) The short issue raised before us is whether the profits emerging from the investment in shares are to be regarded as business income or assessable under the head "Capital gains". The Assessee-Respondent is the managing director of M/s. Chandigarh Distillers and Bottlers Ltd. On the basis of the judgment of the hon'ble the Supreme Court rendered in the case of G. Venkataswami Naidu and Co. v. CIT, 1959 35 ITR 594, the Tribunal has held that no single factor is conclusive for inferring as a fact whether a particular transaction is an adventure in the nature of trade. Observing that the Revenue could not prove that the transactions of sale and purchase of shares undertaken by the Assessee-Respondent were an adventure in the nature of trade, the Tribunal in paragraph 11 has held that the Assessee-Respondent invested in shares with the intention of holding the same as investment and the surplus arising on the sale of such investment has been rightly declared by the Assessee-Respondent assessable under the head "Capital gains". The view taken by the Commissioner of Income-tax (Appeals) has been upheld. It has further been found that the income from the redemption of mutual funds declared by the Assessee-Respondent clubbing the income of his minor daughters could not be treated as an income earned as a dealer or a trade. It has been held that the same has been rightly assessed under the head "Capital gains".

(3.) Having heard learned Counsel, we are of the considered view that the findings recorded by the Tribunal and affirming those of the Commissioner of Income-tax (Appeals) are unexceptionable. The Tribunal has discussed in paragraph 8 various relevant factors to infer the intention and the nature of transactions and concluded that by no stretch of imagination the surplus/account made by the Assessee-Respondent could be regarded as surplus from the business of dealing with shares. These are necessarily findings of fact. It is also concluded by the Tribunal that the redemption of mutual funds by the Assessee-Respondent along with the income of the minor daughters could also not be regarded as trade so as to reckon the same as business income. There is, thus, no merit in the appeal. No substantive question of law warranting its admission would arise. Dismissed.