9911796707
TMI Blog2013 (2) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... erm Capital Gains on sale of shares of Rs.60,40,698/- as business income. 3. Briefly stated the facts of the case are that for the year under consideration, the assessee filed return declaring total income at Rs.82,84,520/-. The same was selected for scrutiny assessment and accordingly notices u/s. 142(1) and 143(2) were issued and served upon the assessee. During the course of these scrutiny assessment proceedings, the Assessing Officer observed that in the return of income. Assessee has declared income from business and profession at Rs.(-7,41,125/-) income from capital gains at Rs. 69,34,401/- and income from other sources at Rs.20,89,279/-. The assessee has also shown speculation loss at Rs.1965/-. On further scrutiny, the Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act. 4. The AO thereafter discussed several judicial decisions and also CBDT Instruction No. 1827 dt. 31.8.1989. The AO finally completed the assessment by treating capital gains both Short Term and Long Term as income from business. 5. The assessee agitated this matter before the Ld. CIT(A) but without any success. The Ld. CIT(A) confirmed the findings of the AO holding that the assessee during the year under consideration has entered into numerous transactions of purchase/sale of shares of numerous companies. The maximum holding period was very short. The Ld. CIT(A) was of the opinion that volume and frequency of purchase and sale of the transactions was in large numbers. Purchase and sale of shares was the only activity of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of the assessee and the orders of the Tribunal, there being no new facts for the year under consideration, the finding of the CIT(A) deserves to be reversed. 7. Per contra, the Ld. Departmental Representative strongly supported the orders of the lower authorities. 8. We have considered the rival submissions and perused the orders of the lower authorities. We have also have the benefit of the decisions of the Tribunal in assessee's own case in assessment year 2005-06 vide ITA No. 534/Mum/2004 and for A.Y. 2006-07 vide ITA No. 882/Mum/2010. On perusal of the statement of Long Term Capital Gain exhibited at page-3 of the Paper book, we find that the assessee has done following transactions: A.Y. 2006-07 U/s. 143(3) S. No. Holding perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gures for the year under consideration, the assessee has done the following transactions: A.Y. 2008-09 U/s. 143(3) S. No. Holding period Short Term Gain(Rs.) Nos. of Scripts 1. 0-30 days 55,11,569/- 3 2. 31-90 days (8,13,350) 4 3. 91-180 days (11,82,921/-) 4 4. 181-270 days 27,11,864 6 5. 271-360 days (1,86,464) 4 Total 60,40,698/- 21 9. A comparative analysis of LTCG shows that during the A.Yrs. 2005-06 and 2006-07, the assessee has transacted in total 56 and 60 scripts respectively whereas for the year under consideration, the assessee has transacted in 35 scripts. The position of STCG for A.Y. 2005-06 and 2006-07 was 31 and 38 scripts respectively and for the year under consideration, the assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, to be based on its own factual situation. In the present case, the assessee had held the majority of shares for a very long time, varying from more than 1 year to 10 years. The income is mostly from long term holding of shares. In some cases, shares have also been sold at short intervals of less than 1 year, resulting into Short Term Capital Gain and even in such cases, mostly the shares were held for more than 90 days. It is possible for an investor to sell shares after holding for less than a year in order to reshuffle portfolio, etc. In a similar situation, the Tribunal in Assessment Year 2005-06 in ITA No.534/Mum/2009 accepted the claim of the assessee as an investor. In that year, the assessee had shown Long Term Capital Gain of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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