IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 691 of 2009 Date of Decision: 07.04.2010 The Commissioner of Income Tax, Patiala …Appellant Versus Amit Modi …Respondent CORAM: HON’BLE MR. JUSTICE M.M. KUMAR HON’BLE MR. JUSTICE JITENDRA CHAUHAN Present: Ms. Urvashi Dhugga, Advocate, for the appellant-revenue. M.M. KUMAR, J. The instant appeal filed by revenue under Section 260A of the Income-tax Act, 1961 (for brevity, ‘the Act’) is directed against the order dated 27.4.2009, passed by the Income Tax Appellate Tribunal, Chandigarh Bench (B), Chandigarh (for brevity, ‘the Tribunal’), in ITA No. 650/Chandi/2008, in respect of the assessment year 2005-06. The short issue raised before us is whether the profit 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 Hon’ble the Supreme Court rendered in the case of G. Venkataswami Naidu & Co. v. CIT, 35 ITR 594 (SC), 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 para 11 I.T.A. No. 691 of 2009 (O&M) 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 CIT (A) 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’. Having heard learned counsel, we are of the considered view that the findings recorded by the Tribunal and affirming those of the CIT (A) are un-exceptionable. The Tribunal has discussed in para 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 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. (M.M. KUMAR) JUDGE (JITENDRA CHAUHAN) April 7, 2010 JUDGE Pkapoor 2