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TMI Blog2013 (5) TMI 552X X X X Extracts X X X X X X X X Extracts X X X X ..... ntries in the Books of Accounts and other relevant factors. FAA has dealt issue at length and has deliberated upon all the relevant facts which are decisive for settling the issue. Shares can be held as trader and as an investor also. Similarly, Profit/loss arising from share activities can be assessed under the head 'Business Income' or 'Income from Other Sources'. CBDT vide its Circular No. 4/2007 has indicated a few parameters to be investigated before deciding the issue. Now, it is universally accepted that a single parameter cannot decide the nature of the shares sold and resultant sale proceeds. FAA has dealt in details about the STCG transactions as well as LTCG & has analysed the period of holding and intention of the assessee. He h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 60.38 Lakhs. Assessment was finalised u/s.143(3) of the Income Tax Act, 1961 (Act) on 26-11-2010 by the Assessing Officer (AO) determining total income at Rs. 01.04 Crores. 3. During the assessment proceedings, AO found that assessee had consistently dealt in shares for the last 4 - 5 years, that share income amounting to 52.04 Lakhs was claimed under the head 'Long Term Capital Gains' (LTCG), income from shares sold within the period of one year were shown as Short Term Capital Gain (STCG). Considering these facts, he directed the assessee as why the activity of selling of shares could not be taken as business especially when he was dealing in share Futures and Options (F O). AO held that assessee had not dealt in shares due to financia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al parameters would not be decisive and it was only a cumulative effect of all these factors to decide the issue as whether the assessee was an investor/a trader. He further held that assessee had disclosed income of Rs. 52,04,472/- under the head 'LTCG', that assessee had filed the details of shares on which the said claim was made. After going through the details, he found that shares had been held for the period ranging from 406 days to 4933 days, that assessee had disclosed LTCG of Rs. 8.83 Lakhs in respect of shares of Tata Power Co. Ltd., which were held for 2512 days, that 150 shares of same company were held for 432 days, that shares of Jubilant Organosys Ltd., were held for 567, 1264 and 1729 days, that all these shares on which LT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be an investor in shares in respect of which he was offering income under the head 'Capital Gains', that the shares on which Capital Gains had been disclosed were being reflected in the Books of Accounts as an investment, that in the Balance Sheet filed, assessee was disclosing the shares under the head 'investments', that the intention of the assessee showed that shares were not held as trading assets. After considering the details available on the record, he found that majority of the shares sold were held for more than 60 days, that substantial amount of capital gains representing almost 84.66% of the total STCG was earned from shares which were held for more than 30 days, that 60.84% of the total STCG was earned form the shares which wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be assessed as STCG. As a result, appeal filed by the assessee was allowed by the FAA. 5. Before us, Departmental Representative (DR) submitted that FAA did not appreciate factors like volume, period of holding and intention of the assessee to determine the nature of transactions, the activities of the assessee were in the nature of business. Authorised Representative (AR) submitted that assessee was an investor and not a trader of the shares, income/loss arising out of F O segment of shares was offered for taxation under the head 'business' by the assessee. Assessee had sold some shares for a period of less than one year and that shares held for more than 365 days were also sold during the AY under consideration, that FAA had rightly he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s/various benches of the Tribunal have also dealt the issue in many a cases. Now, it is universally accepted that a single parameter cannot decide the nature of the shares sold and resultant sale proceeds. We find that FAA has dealt in details about the STCG transactions as well as LTCG. He has analysed the period of holding and intention of the assessee. He has also taken into consideration that no borrowed funds were utilised by the assessee for making investment in shares. After considering all the relevant facts and circumstances of the cases, he had reached to a logical conclusion that transactions carried out by the assessee were not in the nature of business activity. We find that his order does not suffer from any factual or legal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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