9911796707
TMI Blog2012 (9) TMI 686X X X X Extracts X X X X X X X X Extracts X X X X ..... wn by the assessee is assessable under the head "Business Income". 2. The relevant facts are that the assessee is a public limited company engaged in the business of trading in machinery. For the assessment year under consideration, the assessee filed return of income declaring total income of Rs. 30,86,808. 3. In the assessment year under consideration, the assessee has declared short term capital gain of Rs. 18,17,014, on sale of shares. The Assessing Officer has stated that on verification of the details furnished, the frequency of sale and purchase of shares is very high and also the quantum of shares purchased in some cases are very high. The Assessing Officer has given the details of the shares for which the assessee has accounted f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he balance sheet drawn up by it year after year. It was also contended that in the assessment of earlier years, both the short term capital gain and long term capital gain had been assessed as capital gains. It was also contended that purchase and sale of shares are neither allied to or incidental to carrying on assessee's business of dealing in machinery. 6. The Commissioner (Appeals) considered the submissions of the assessee and vide Para-6 of the impugned order, directed the Assessing Officer to treat the income of the assessee under the head "short term capital gain", which reads as follows:- "6. I have duly considered the submissions of the A.R. and I find that the A.O. has accepted the long term capital gain but treated the short t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... action entered into before 1st October 2004 and loss of Rs. 53,467, has been accepted by the Assessing Officer. He referred to Page-25 of the paper book and submitted that there were only five scrips which were dealt with by the assessee before 1st October 2004, and the Assessing Officer accepted the transactions as "Investment". The learned Counsel submitted that there was long term capital gain amounting to Rs. 7,46,715 before 1st October 2004 and the Assessing Officer accepted the same as long term capital gain. He further submitted that there was a long term capital loss after 1st October 2004, amounting to Rs. 4,12,208, and the same has also been accepted by the Assessing Officer. The learned Counsel referred to Pages-22 to 24 of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sold on 27th January 2005 and thereafter the said shares were purchased in auction at the Stock Exchange on 28th January 2005. The learned Counsel submitted that the assessee has also purchased shares of Bharti Shipyard on 24th December 2004, and sold on 10th January 2005, showing short term capital gain of Rs. 20,050. He submitted that the observation of the Assessing Officer that there were repeated purchases and sales of shares or there is high frequency of share transactions is not factually correct, as there were only five scrips in which the shares were purchased and sold. The learned Counsel further submitted that the Assessing Officer, in the assessment order, has only discussed theoretical part but nowhere has stated, as to how the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Department has not disputed the said order of the Commissioner (Appeals) in further appeal. The learned Counsel submitted that the Commissioner (Appeals), following the rule of consistency, has rightly accepted the short term capital gain in the assessment year under consideration. The learned Counsel referred to the table given by the Assessing Officer at Page-9 of the assessment order which is reproduced herein above in Para-3 and submitted that first three transactions of shares mentioned by the Assessing Officer are prior to 1st October 2004 and same have already been accepted by the Assessing Officer as short term capital gain. The learned Counsel submitted that the principle laid by various judgments of the Hon'ble Supreme Court and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f NTPC were also purchased on 27th October 2004, and were sold in December 2004. In that scrip also, it cannot be said that the assessee has repetitively entered into the transactions of purchase and sale of shares. We observe that there are also three other scrips and in respect of one of the scrips namely Indian Semless, there is short term capital loss of Rs. 19,865, and the assessee stated that this transaction took place because of some mistake. We observe that the Department has not disputed the said fact. It is also observe that the assessee has been dealing in shares as an investor from assessment year 1995-96 and the Department has accepted the same as investment except in the assessment year under consideration. It is relevant to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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