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TMI Blog2013 (2) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment Year 2005-06 accepted the claim of the assessee as an investor. In that year, the assessee had shown Long Term Capital Gain of Rs.1,60,23,772/- and Short Term Capital Gain of Rs.26,36,004/-. The assessee had also shown small income from trading, for which separate accounts had been maintained. Further, in the AY 2002-03 and 2004-05, the AO himself accepted the similar income declared by the assessee as capital gain. The capital gain declared by the assessee was again accepted by the AO for the AY 2007-08 u/s.143(3). Considering the facts and circumstances of the case, it will not be appropriate to assess the income declared by the assessee from sale and purchase of shares as business income - in favour of assessee. - ITA No.869 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scrips, Short term Capital gain on sale of shares have been shown at Rs.60,40,898/-. The AO was of the opinion that the assessee has been engaged in buying and selling of shares on a regular basis. According to the AO, the assessee has done all possible transactions permitted on the Stock Exchange viz, intraday trading, regular delivery based transaction and FNO. The AO was of the opinion that being engaged in regular activity of buying and selling of shares mere classifying these shares as investment in the balance-sheet would not change the nature of the assets. On forming this belief, the assessee was asked to show-cause as to why the income on share transactions should not be treated as business income. The assessee filed a detailed rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee vehemently submitted that the Ld. CIT(A) has fell into gross factual errors. Pointing out to page 39 clause (xi) of the CIT(A) s order, the Counsel pointed out that the CIT(A) has held that Further, if something is accepted in any of the earlier years u/s. 143(1), that will not amount to acceptance by the department regarding holding of stock in trade or investment. . Objecting to this observation of the Ld. CIT(A), the Counsel submitted that the case of the assessee have been scrutinized since 2005-06 and all the assessments thereafter till date have been completed u/s. 143(3) of the Act. The Counsel further pointed out that in the assessment year 2005-06, the Long Term Capital Gains declared by the assessee has been accepted as same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,45,59,782/- 21 3. 5-10 years 99,95,801/- 27 4. 10 or more 1,67,123/- 10 Total 2,75,81,179 60 A.Y. 2005-06 U/s. 143(3) S. No. Holding period Long Term Gain(Rs.) Nos. of Scripts 1. 1-2 years 35,20,327/- 11 2. 2-5 years 35,24,418/- 14 3. 5-10 years 84,79,577/- 24 4. 10 or more 4,99,450/- 7 Total 1,60,23,772/- 56 As compared to the above figures for the year under consideration, the assessee has done the following transactions: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sideration, 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 h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as capital gain or as business income has been a debatable issue and there are conflicting decisions of the Tribunal on this issue. Each case is, therefore, 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 Assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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