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TMI Blog2012 (8) TMI 306X X X X Extracts X X X X X X X X Extracts X X X X ..... of shares and volume were substantial in the case of assessee and revenue could not demonstrate that there were large number of transactions which had frequency, volume, continuity the income earned by the assessee from trading in the shares under the head 'LTCG/STCG' was shown correctly - in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... ars accordingly. In appeal filed by the assessee, the Commissioner of Income Tax (Appeals) deleted the additions made by the Assessing Officer. 5. We have gone through the record. We find that the Commissioner of Income-tax (Appeals) and the Appellate Tribunal both have held in favour of the assessee and against the revenue by recording a finding of fact that the assessee had rightly claimed his income earned from trading in shares under the head long term capital gains / short term capital gains. However, with regard to the same assessee, for the Assessment Years 2000-2001 to 2004-2005, a Division Bench of this Court in Tax Appeal No.48 of 2010 and cognate appeals had affirmed the finding of the Tribunal and had dismissed the appeals. Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a] The first test is whether the initial acquisition of the subject matter of transaction was with the intention of dealing in the item, or with a view to finding an investment. If the transaction, since the inception, appears to be impressed with the character of a commercial transaction entered into with a view to earn profit, it would furnish a valuable guideline. [b] The second test that is often applied is as to why and how and for what purpose the sale was effected subsequently. [c] The third test, which is frequently applied, is as to how the assessee dealt with the subject matter of transaction during the time the asset was with the assessee. Has it been treated as stock-in-trade, or has it been shown in the books of account and b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transaction, bearing reasonable proportion to the strength of holding, then an inference can be drawn that activity is in the nature of business. Learned counsel for the revenue from the records could not demonstrate that there were large number of transactions which had frequency, volume, continuity and regularity and fell within the tests laid down by the Division Bench of this Court. 10. For the aforesaid reasons, we are of the considered opinion that the income earned by the assessee from trading in the shares under the head long term capital gain / short term capital gain was correctly shown. We do not find that in the Assessment Year 2005-2006 and 2006-2007, the transaction of sale of shares and volume were substantial. We do not fin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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