Capital gain or business income: Rule of consistency: Profit on sale of shares taken as capital gain in past: Assessment of such profit as business income in the relevant year as business income: Not just:

"a) Whether, on the facts and circumstances of the case
and in law, the Hon’ble ITAT was justified in treating the income from sale
of 7,59,003 shares for Rs. 5,00,12,879/- as an income from short-term
capital gain, and the sale of 3,88,797 shares for Rs. 6,65,02,340/- as
long-term capital gain, as against the "Income from business" assessed by
the A.O.

b) Whether, on the facts and circumstances of the case
and in law, the Hon’ble ITAT was justified in holding that the principles of
consistency must be applied here as the authorities did not treat the
assessee as a share trader in preceding year, in spite of existence of a
similar transaction, which cannot in any way operate as res judica to
preclude the authorities from holding such transactions as business
activities in current year

"i) The Tribunal has achieved a pure finding of fact that
the assessee was engaged in two different types of transactions. The first
set of transactions involved investment in shares. The second set of
transactions involved dealing in shares for the purpose of business. The
tribunal has correctly applied the principle of law in accepting the
position that it is open to an assessee maintaining two separate portfolios:
one relating to investment in shares and another relating to business
activities involving dealing in shares. The tribunal held that delivery
based transactions in the present case should be treated as those in the
nature of investment transactions, and the profit received thereof should be
treated either as short-term or, as the case may be, long-term capital gain,
depending on the period of holding. A finding of fact has been arrived at by
the Tribunal as regards the existence of two distinct types of transactions,
namely, those by way of investment on the one hand, and those for the
purposes of business on the other hand. Query (a) above, does not raise any
substantial question of law.

ii) In so far as query (b) is concerned, the Tribunal has
observed in paragraph 8.1 of its judgment that the assessee has followed a
consistent practice with regard to the nature of the activities, the manner
of keeping records and the presentation of shares as investment at the end
of the year, in all the years. The Revenue submitted that a different view
should be taken for the year under consideration, since the principle of res
judicata is not applicable to assessment proceedings. The Tribunal correctly
accepted the position that the principle of res judicata is not attracted
since each assessment year is separate in itself. The Tribunal held that
there ought to be uniformity in treatment and consistency when the facts and
circumstances are identical, particularly in the case of the assessee. This
approach of the Tribunal cannot be faulted. The Revenue did not furnish any
justification for adopting a divergent approach for the assessment year in
question. Query (b), therefore, does not also raise any substantial
question."