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TMI Blog2010 (11) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... - - - Dated:- 30-11-2010 - Shri N.V.Vasudevan, Pramod Kumar, JJ. Appellant by: Shri Jitendra Yadav Respondent by : Shri Shalin S.Divatia O R D E R Per Pramod Kumar: 1. By way of this appeal, the Assessing officer has called into question correctness of CIT(A) s order dated 22 July 2009, for the assessment year 2006-07, on the following grounds: 1. On the facts and in the circumstances of the case and in law, the ld CIT (A) has erred in directing to treat the STC Gain of Rs.11,11,063/- as a STC Gain of Rs.11,11,063/- as a STC Gain instead of business income made by AO in his assessment order, ignoring the fact that : a) The assessee has deployed her fund with an intention of earning profit of such fund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ference was also made to the Hon ble Supreme Court judgement in the case of G.Venkataswami Naidu Co v. CIT (35 ITR 594), wherein, Their Lordships have laid down where purchase has been made solely and exclusively with intention to resell at a profit and the purchaser has no intention of holding property for himself or otherwise enjoying or using it, presence of such an intention is a relevant factor and unless it is offset by presence of other factors, it would raise a strong presumption that transaction is in the nature of trade. It was also noted that dividend earned during the year amounted to Rs.94,259/-, which clearly shows the intention of the assessee to hold shares only for such period as may enable her encashing the appreciation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts of the present case. The same is reproduced below:- The said decision relied upon by the AO has laid down certain tests to determine whether a transaction constitutes capital gain or business. The tests and facts of the assessee s case are set out hereafter. 1) Was the purchase of the commodity and its resale allied to his usual trade or business or incidental to it? No Assessee has no such business 2) What is the nature of the commodity purchased and resold and in what quantity was it purchased and resold? Investments are made in shares and Mutual funds. 3) Did the purchase, by any act subsequent to the purchase, improve the quality of the commodity purchased and thereby make it more readily re-salable? No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... who has not made any adverse comment. The aforesaid clearly indicates that the assessee was not a trader in shares. Hence, the addition, it is humbly submitted, should be deleted. 4. On taking into consideration the facts of the case as also the submissions so made by the assessee, the CIT (A) reversed the action of the Assessing officer, inter alia, observing as follows:- 3.8 I have perused the assessment order, written submission and the judicial pronouncements relied in this case from either side. The most formidable controversy arising from the transfer of shares and securities is to determine the exact head of income in which the gains or loss has to be taxed, i.e. the same has to be taxed as business income or capital gains. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lume of transaction. Simply because there is amendment in the Act that should not lead to changing of the head if the facts and circumstances do not justify. On the given facts and circumstances of the case, there is no reason for treating Rs.11,11,063/- shown under short term capital gain as business income. therefore, the order of the AO is reversed and this ground of appeal is allowed. The Assessing officer is aggrieved of the relief so granted by the CIT (A) and is in appeal before us. 5. We have heard the rival contentions and perused the record of the case. We have noted that so far as the present transactions are concerned, these transactions are undisputedly carried out by the assessee s Portfolio Manager and, therefore, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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