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TMI Blog2013 (5) TMI 717X X X X Extracts X X X X X X X X Extracts X X X X ..... om where he has received the commission. However, this company in which assessee is a director deals in share and F & 0 transactions. It was observed by the AO in para 3 of the assessment order that all the purchases and sales of shares/ F & 0 have been shown by the assessee either with this company where he is a director or with the sister concern. For that purpose. appellant has utilized overdraft facilitie that too after pledging shares stock to the bank. According to the AO, the reply of the appellant dated 03.12.2009 justifying the claim of short term capital gain is not acceptable because of the facts of the case. In support, he has given details of transactions in annexure 'A', 'B' & 'C' enclosed with the assessment order. According to him. in F. Y. 2003- 04, there was no such investment in share nor was any dividend but in F.Y. 2004-05, there was purchase of shares of Rs. 4,87,65,519/- and the dividend was shown of Rs. 1900/- only. In subsequent year i.e. F.Y. 2005-06, there was purchase/investment in shares of Rs. 6,12,03,702/- and dividend was only of Rs. 5,34,913/- and in F. Y. 2006-07 relevant to this assessment year, there is transaction or Rs. 3,41,23,815/- and divide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 2006-07, the AO has accepted the short term capital gain on similar transactions while completing assessment under Section 143(3). It was further submitted that the assessee has shown all the purchases under the investment portfolio and in support of these, copy of balance sheet showing investment in shares were also filed and it was also shown that they have valued at cost. It was further submitted that the AO has accepted the long term capital gain but has not accepted the short term capital gain as he treated the transaction as adventure of nature in trade. Reliance was placed on the Board Circular and the decision of the Tribunal in the case of Gopal Purohit Vs. JCIT, reported ion (2009) 29 SOT 117 (Bom), which has been confirmed by the Hon'ble Bombay High Court reported in 270 CTR 582. Reliance was also placed on various case laws i.e. in the case of Janak S Rangwala Vs. ACIT, 11 SOT 627 (Mum), ACIT Vs. Khetan Kumar A Shah, 242 ITR 83 (Ker) and in the case of Suresh Kumar Seksaria Vs. ACIT, reported in 1 ITR (Trib) 783 (Mum). 6. The contention raised before the lower authorities have been incorporated in the order of the learned CIT(A) in para 3.1 at pages 5 to 11. Thereaft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ital gain has to be assessed. 11. The Hon'ble High Court has decided this issue in the case of Gopal Purohit (supra), by which the detailed order passed by the Tribunal have been confirmed. Thereafter in the case of Ashvinkumar K. Kapadia, similar issue was decided by the Tribunal and this order of the Tribunal has also been affirmed by the Hon'ble jurisdictional High Court in ITA No.5510/2010, vide order dated 28-9-2011. While deciding the issue in favour of the assessee, the Hon'ble High Court followed the decision in the case of Gopal Purohit (supra). 12. Recently the Nagpur Bench of the Tribunal in the case of Shri Sanjay Ishwarlal Ranka in ITA No.161/Nag/2012, vide order dated 8-2-2013, has decided the similar issue. The finding s of the Tribunal have been recorded in para 6to9 at pages 2 to 7, which are as under :- 6. After considering the submissions and taking into consideration the orders of the lower authorities, and the order of the Tribunal decided in ITA No.216/Nag/2009, in the case of Sanjay Ishwarlal Ranka for the assessment year 2006-07, vide order dated 16-10-2012, we find that the appeals of the department are liable to be dismissed. 7. These two assessees der ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crips being less than a month, it was found by the learned CIT(A) that it is necessary to appreciate that a prudent investor would keep a watch on market trends and is entitled to liquidate his investment and earn profits which are to brought to tax as short term capital gain. After placing reliance on the order of his predecessor for the assessment year 2006-07, decided in appeal of the CIT(A) No.CIT(A)-I/559/08- 09, dated 07-07-2009, whereby a similar claim was allowed in favour of the assessee, allowed the issue in favour of both these assessees, as the facts are similar in both of the cases. 9. We further noted that against the order of CIT(A) for assessment year 2006-07, the department preferred appeal before the Tribunal and the Tribunal discussing the issue in detail and placing reliance on various decisions of the Tribunal i.e. in the case of Dineshbhai C. Patel (HUF),passed in ITA616/Nag/2008, vide order dated 5-6-2009; Gopal Purohit, 20 DTR (Mum)(Trib) 99; the decision in the case of CIT Vs. V.A.Trivedi, 172 ITR 95 (Mum) and the decision of the Hon‟ble High Court in the case of CIT Vs. Gopal Purohit, 228 CTR 582, allowed the issue in favour of assessee. The finding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchased from the primary market; - Whether the shares have been purchased from the secondary market; - Whether the shares have been purchased by subscription to Public -Whether the shares have been held for fairly long period, and - Whether the shares once sold have never been re- purchased 14. We noted that in the case of CIT Vs V A Trivedi 172 ITR 95 (Born) Hon‟ble jurisdiction High Court has clearly laid down under para 12 of the order that the onus of establishing that a purchase is made with the intention to trade is on the Revenue. 15. We noted that the main contention of the revenue in treating the gain to be the income from business is the number of transactions and the period of the holding by the assessee. The period of the holding and number of transactions cannot be the only basis to determine whether the assessee has carried out the business in shares transactions. It may be one of the relevant consideration but cannot be the main consideration for deciding whether the assessee in this case is engaged in a business or not. We have to look into all the surrounding circumstances. This is a fact on record that the assessee in this case is engaged in the emplo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue to prove that apparent is not real. No evidence was being placed or brought to our knowledge by the Ld. D.R. which may prove that the intention of the assessee was not to hold the shares as investment. It is also a fact that the assessee derived the dividend income and has also made the investment in the shares not out of the borrowed funds, but out of its own surplus funds. The CIT(A) while allowing the appeal of the assessee has extensively dealt with the various factors as well as various case laws to arrive at a finding that the shares were held by the assessee as a capital investment and not as stock in trade. He has also relied on the decision of this Tribunal in the case of CIT Vs. Dineshbhai C. Patel (supra). It is not denied that the facts involved in this case in the case of Dineshbhai C. Patel (supra) are similar to the facts in the case of the assessee. Similarly, the facts involved in the case of Gopal Purohit Vs. JC1T 20 DTR 99 (Mumbai) were also the same as in the case of the assessee. In all those cases, the Tribunal took the view that period of holding cannot be the basis to determine whether the share transaction entered into by the assessee is a business in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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