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TMI Blog2013 (4) TMI 318X X X X Extracts X X X X X X X X Extracts X X X X ..... ts i.e. in AYs 2005-06 and 2006-07. The assessee has filed copies of assessments orders for these two assessment years wherein the said short term capital gain disclosed by the assessee was accepted. The assessee has filed evidences qua that sales of shares are made and on which short term capital gains has accrued are acquired during earlier years. In such circumstances, CIT(A) has rightly treated the sale of shares as short term capital gain. Appeal of revenue is dismissed. - I.T.A No. 431/Kol/2011 - - - Dated:- 15-2-2013 - Shri P. K. Bansal, AM And Shri Mahavir Singh, JM,JJ. For the Appellant: Shri D. K. Rakshit, JCIT, Sr. DR For the Respondent: Shri V. N. Purohit, FCA ORDER This appeal by revenue is ari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hart of holding company, quantity, date of purchase, date of sale, sale price and profit earned. AO noted that the assessee is engaged in frequent transaction of shares and he has no intention to hold the shares to earn dividend. He relied on Circular No. 4/2007 dated 15.06.2007 of CBDT. AO issued show cause notice as to why the short term capital gain be not treated as income from business. The assessee replied the show cause notice vide letter dated 24.11.2009 and answered as under: i) the assessee does not have any specialized knowledge or expertise to carry on the business in shares and the assessee is not technically qualified. ii) In the previous year relevant to the AY 2006-07 the assessee earned substantial income from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otalling ₹ 12,50,000 from two persons namely Payel Trading Co. ₹ 8,50,000 and Sri B K Banerjee ₹ 4,00,000. However, here too he has misappreciated the facts. The assessee had taken advance from Payel Trad ng Co. only amounting to ₹ 8,50,000 and g ven advance (and not taken) to Sri B K Banerjee ₹ 4,00,000. Further, the assessee as on 31st March, 2007 had a total investment in shares of ₹ 1,82,14,240. Hence, it cannot be concluded that the assessee had borrowed funds for purchase of shares as the amount of loan is less than 3% of total investment in shares assuming that ₹ 4,00,000 has been utilized for giving advance. Further the assessee has lot of other assets as evident from the balance sheet but n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apital gains would be treated as business profit. Appellant's activities of making investments in shares is since past several years and the same set of investments related conduct is being pursued year after year. Appellants motive has been to make investments in shares to earn income by way of Dividends and to alter its portfolio when found conducive. Appellant submitted that so far as magnitude of transactions is concerned, it cannot be a ground at all as in the course of investments, it is quite possible to enter into some transactions to avoid losses and/or to realize the investments for re-investments. Appellant submitted that the appellant is pursuing the same system of accounting consistently over the years which have been accep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital asset or investment, which would have been the case if the said investment is to be treated as stock in trade. Even the assessee is consistently valuing the investment at cost. The assessee is consistently offering the income accruing to him from sale of shares under the head capital gains and the same is accepted by the Income Tax Department during earlier years' scrutiny assessments i.e. in AYs 2005-06 and 2006-07. The assessee has filed copies of assessments orders for these two assessment years wherein the said short term capital gain disclosed by the assessee was accepted. The assessee has filed evidences qua that sales of shares are made and on which short term capital gains has accrued are acquired during earlier years. I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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