9911796707
TMI Blog2012 (8) TMI 396X X X X Extracts X X X X X X X X Extracts X X X X ..... king profits. It is therefore clear that the assessee had acquired shares in public issues from borrowed funds through an organized effort almost at allotment price, through irregular and illegal manner and selling them on profit soon after shares were listed on stock exchange. The income from share transactions has, therefore, been rightly assessed as business income, however, Security Transaction tax (STT) has to be allowed as a deduction - Decided against assessee. - ITA No.5972/M/10 - - - Dated:- 15-6-2012 - SHRI D. MANMOHAN AND SHRI RAJENDRA SINGH, JJ. Appellant by : Shri Sameer Dalal Respondent by : Shri V.V. Shastri O R D E R PER RAJENDRA SINGH, AM: This appeal by the assessee is directed against the order d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hase/sale of shares by the assessee and noted that the assessee during the relevant year had made purchases of shares to the tune of Rs.42,20,02,360/- and units of mutual fund to the tune of Rs.15,51,00,000/-. The details of purchases and sales were as under :- Sr. No. Name of Scrip No. of Scrips Date of allotment Date of Sale 1 Jaiprakash Hydro 171400 13.04.2005 18.04.2005 20.04.2005 2 Nandan Exim Ltd. 12604 07.06.2005 13.06.2005 3 IDFC Ltd. (off market) 141514 265734 06.08.2005 09.08.2005 12.08.2005 26.09.2005 26.09.2005 11.08.2005 4 Renuka Sugar Ltd. 1770 27.10. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chase of shares and units as income from short term capital gain and paid tax @ 10% although at the time of investigation the assessee had agreed for the assessment of income as business income. The AO, therefore, asked the assessee to explain as to why income should not be treated as business income. The assessee submitted that it was a limited company, the main object of which was to carry on business of providing financial consultancy and making investment in purchase of shares and debentures. As stock market was booming, assessee started making investment in shares and debentures from the funds raised from shareholders and other inter-corporate deposits. The company had taken delivery of shares in the demat account and declared shares a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd shares had been declared as investment in the books of account. It was also submitted that the assessee had made investment in shares of only 16 companies and thus had only limited transactions. Though the quantum involved in the transaction was high, this could not be considered as business activity considering the limited number of transactions. The ld. AR for the assessee however admitted that in the earlier year the income had been assessed as business income and assessee had not contested the matter in appeal. It was further submitted that the assessee had not filed appeal because the tax effect was small. It was also submitted that in case the plea of the assessee was not accepted to assess income as capital gain, assessee should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ofit soon after shares were listed on stock exchange. The details of transactions reproduced earlier also to show that shares have been sold in a short period of time mostly within a month and in many cases within a few days. These are not attributes of an investor who purchases shares with a view to earn dividend and for holding for long period. 4.1 It is a settled legal position that entry in the books of account is not conclusive in deciding the true nature of transaction. Whether assessee is an investor or trader had to be gathered from the actual conduct of the assessee while dealing with the shares subsequently. This view is supported by the judgment of Hon'ble Supreme Court in the case of CIT vs. Madan Gopal Radhey Lal (73 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
