TMI Blog2011 (8) TMI 1160X X X X Extracts X X X X X X X X Extracts X X X X ..... this Tribunal and remanded the matter for fresh decision. 3.1. In view of the above this appeal is fixed for hearing before this Tribunal to readjudicate ground no.4 raised by the revenue which is as under :- 4. That the ld. CIT(A) has erred in law as well as on facts by directing the assessing officer to treat the surplus of ₹ 1,62,05,046/- earned by the assessee on sale and purchase of shares as short term capital gain instead of business income. 4. The relevant facts as appeared from the order of this Tribunal in respect of the above issue are as under :- 18. The relevant facts are that the A.0. observed on perusal of Profit Loss A/c. and also the document produced at the time of hearing that the assessee company purchased and sold the shares of different companies, the details of which are given in table 2 by the A.0. at pages 4 to 5 of the assessment order. On perusal of the said details, the A.O. stated that the assessee-company purchased and sold most of the shares within a range of 1 to 150 days. However, most of the shares were sold within 1 to 10 days after purchase. Therefore, the frequency of purchase and sale of those shares was v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Department is in further appeal before the Tribunal. 20. The ld. Departmental Representative for the Revenue submitted that the A.0. was justified to treat the amount of surplus on purchase and sale of shares as business profit. The ld. D.R. submitted that the Hon ble Apex Court in the case of G. Venkataswami Naidu Co. -vs.- Commissioner of Income Tax [35 ITR 594] has laid down certain principles to ascertain as to whether the transaction is for the purpose of investment or is an adventure in the nature of trade. The ld. D.R. submitted that considering the period of holding of shares and the quantity of the scripts purchased and re-sold by the assessee establish that the transaction was in the nature of trade and not in the nature of investment. The ld. D.R. submitted that the Hon ble Apex Court in the case of Anil Jain - vs.- Commissioner of Income Tax Another [294 ITR 435] has held that it is a relevant factor for determining whether the transaction was one of business or an adventure in the nature of trade, is to whether the assessee had carried on similar transactions or not. The ld. D.R. submitted that in the back of mind of the assessee is to capitalize the fluctua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness; the repetition of the transaction; the element of pride of possession. If we apply the above principles to the facts of the case before us, we observe that the assessee has purchased during the course of financial year relevant to the assessment year under consideration, the scripts of 22 companies. All the shares were purchased and also sold in the financial year relevant to the assessment year under consideration. On perusal of the table 2 at pages 4 to 6 of the assessment order, we observe that some of the scripts were retained by the assessee for a period of 1 to 10 days only. There were only a very few shares, the details of which are given by the AO in table 3 at page 7 of the assessment order that the shares were not sold during the year and the assessee received dividend therefrom. Therefore, we agree with the A.O. that the dividend earning was not the sold motive of the assessee but the motive was only to earn quick profit through trading of shares. The AO has also stated that the infrastructure employed is indicative of the fact that those shares were acquired by the assessee with a clear motive of earning quick profit. The assessee has not disputed the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt portfolio and the Revenue has not disputed the same. (v) The Hon ble High Court based on the above facts has restored the matter to the Tribunal for re-consideration. Therefore he requested to upheld the orders of the ld. CIT(A). 7. After hearing the rival submissions and on careful perusal of materials available on record, it is observed that out of the total 162 lakhs of Short Term capital Gains an amount of 159 lakhs are relating to Jubilant Organosis Ltd. In this case the assesee is already having shares of 2045 as on 31.3.2004 in the investment portfolio and the AO has accepted the sale of the said shares as Short term capital gains in the assessment order whereas the subsequent shares purchased by the assessee obtained as bonus shares has been treated by the AO as business income without assigning the reasons. Therefore, in our considered opinion the AO is not justified to treat part of the transactions in respect of some of the shares of the same company as Short Term Capital Gain and the balance as business income without bringing any material to this effect. 7.1. It is further observed that in the case of NTPC and Western India Limited where the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Tribunal which is no more in existence will not survive. Even otherwise also we find no infirmity in the orders of the ld. CIT(A) while deleting the penalty u/s 271(1)(c) of the Act. The relevant observations of the ld. CIT(A) are as under :- In the case of the appellant the facts are similar. The bona fides of the appellants explanation of the facts are clearly proved from the fact that the Hon ble Calcutta High Court admitted the appeal and restored the matter to Hon be ITAT for reconsideration of facts. If there can be two opinions about the claim of the assessee, the explanation offered by the assessee cannot be regarded as false. In my opinion, the appellant has furnished all details of transactions in shares. The AO has not found any concealment of income or inaccuracy in facts filed. In my opinion, this is only difference of opinion and nothing to do with furnishing of inaccurate particulars of such income. The word particulars used in the section 271(1)(c) would embrace the meaning of the details of the claim made. It is clear in the present case that no information given int eh return was found to be incorrect or inaccurate. In view of the above discussion and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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