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TMI Blog2012 (9) TMI 787X X X X Extracts X X X X X X X X Extracts X X X X ..... head capital gain as is claimed & declared by the appellant. Just and proper relief be granted to the appellant in this respect." 3. Facts of the case, in brief, are that the assessee is a member of Sukhwani Group wherein a search u/s.132 of the I.T. Act was conducted on 14-06-2006. In response to the notice issued u/s.153A the assessee filed the return of income wherein profit on sale of shares amounting to Rs. 9,82,738/- was declared under the head "Short term capital gain". During the course of assessment proceedings the AO noted that there were several purchases and sale transactions of shares during the year and the profit derived from such transactions was offered as Short term capital gain. The AO therefore asked the assessee to explain as to why the transactions done by the assessee in shares should not be treated as trading in shares and the resultant profit be treated as income from business as against short term gains disclosed by the assessee. In response to the same it was submitted by the assessee that she was always an investor in shares and securities in the past and a few investments were sold out and the profits earned were offered as Long term/Short term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was submitted that no borrowed funds were utilised for making such investments and the observation of the AO that interest free funds were availed from the sister concerns for making the investments in shares is not correct. It was pointed out that the unsecured loans appearing in balance sheet is interest free advance from her father. It was submitted that the various shares held by the assessee are reflected in the balance sheet under the head investments and not as current assets and that the treatment in this respect has been consistent having regard to the objectives and the motive behind making such investments. It was also submitted that all shares were taken by way of physical delivery (credited into Demat Account) and held for reasonable/substantial period of time before those were disposed of. It was submitted that when the shares were sold the actual delivery thereto were given which could be verified from the Demat account except in the case of 1000 shares of Shakti sugar. 6. The assessee submitted that the total transactions of shares carried out by the assessee during the year is just 58 which worked out to little less than 5 transactions on an average per month. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere investor in shares of few companies and the assessee has dealt in shares of several companies and there was a systematic organised activity every year with the said parties or contract in the matter of acquiring, holding and selling of shares. The conduct of the assessee alone and the pattern of purchases and sale of shares of different companies according to him is not a case where the assessee contended herself with merely making an investment and looking for dividend and maximisation of investments. According to him the volume, frequency, continuity and regularity lead to an inference that the intention of the assessee was to deal in shares and securities. Relying on a couple of decisions and distinguishing the various decisions cited before him, the learned CIT(A) justified the action of the AO in computing the profit on account of sale of such shares under head 'business'. Aggrieved with such order of the CIT(A) the assessee is in appeal before us. 9. Referring to Paper Book Page No. 12 and 13 the learned counsel for the assessee submitted that the assessee has purchased the shares in lots and sold them in different lots after holding them for a substantial period of time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details of share transaction for the year 2005-06 furnished by the assessee at Paper Book Page Nos. 5 to 8 we find in some cases the shares have been held fairly for a longer period. For example 2000 shares of Advani Hotel purchased on 17-05-05 were sold on 16- 09-05 (1000 shares) and 28-11-05 (1000 shares). 10000 shares of Ciber Info purchased on 27-01-05 were sold on 06-06-05 (5000 shares) and 10-06-05 (5000 shares). 9000 shares purchased in the company Electrotherm during the period 02- 06-05 to 04- 10-05 were sold during the period 29-09-05 to 04-10-05. The shares purchased in H B Portfolio on 10-06-05 were sold on different dates starting from 16-06-05 to 21-12-05. 10000 shares of Himatchal futuristic purchased on 14-01- 05 were sold on 03-06-05 (5000 shares) and 06-06-05 (5000 shares). The list goes on like this. 11. We find force in the submission of learned counsel for the assessee that when profit on sale of part of the shares has been accepted as "Long term capital gain" therefore profit on sale of part of shares shown as "Short term capital gain" should not be treated by the AO as business income. Further, the submission of the learned counsel for the assessee that no m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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