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TMI Blog2013 (8) TMI 700X X X X Extracts X X X X X X X X Extracts X X X X ..... ade or under the head investments. If purchases have been shown under the head stock-in-trade then the sale transactions has to be treated as business transactions and if the sales have been effected from investment account then the gain has to be treated as long term capital gain or short term capital gain, as the case may be. In the present case, the assessee has shown all the purchases under the head investment portfolio - Decided in favour of assessee. - ITA No.4075/Mum/2010 & ITA No.2997/Mum/2011 - - - Dated:- 21-8-2013 - Shri R. K. Gupta, JM And Shri R. S. Syal, AM,JJ. For the Petitioner : Mr. Ashok Patil For the Respondent : Mr. Anurag Shrivastava ORDER Per Shri R.K.Gupta, JM: This common order shall govern the disposal of two appeals, which have been filed by the assessee against the order of learned CIT(A), Mumbai for assessment years 2006-07 2007-08, respectively. 2. Since common issues are involved in both the cases, therefore, for the sake of convenience, both the cases have been heard and disposed of by this consolidated order. 3. The first issue in both the appeals is against not allowing short term capital gain of Rs.11,91,247/- for assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investment portfolio, therefore, in our considered view, the gain on account of sale of shares has to be treated as short term capital gain on the facts of the present case. Similar issue came before the E-Court of Nagpur Bench in the case of Shri Sanjay Ishwarlal Ranka, decided in ITA No.161/Nag/2012, vide order dated 8-2-2013. The final findings of the Tribunal has been recorded in paras 9 10, which are as under :- 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 findings of the Tribunal for the assessment year 2006-07 have been recorded in para 12 to 16, which are as under:- 12. We have carefully considered the rival submissions and, peruse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 employment and has derived the salary income. Out of the surplus fund, he invested into the shares and the units and those shares and units has duly been shown by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see 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 income or capital gain. In this case also, we noted that the assessing officer has built up his case mainly on the basis o period of holding and on that basis, he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2007-08 and Rule 8D is not applicable for these years under consideration as held by the Hon ble Bombay High Court in the case of Godrej Boyce Mfg. Co. Ltd.(supra). Accordingly, we set aside this issue to the file of the AO to decide the issue afresh after affording opportunity of being heard to the assessee. 8. Ground Nos.3, 4 5 raised in the appeal for assessment year 2006-07 are against not adjusting the loss of Rs.1,28,897/-. 8.1 It was submitted by the learned AR that the AO has dismissed this issue raised in these grounds by observing that the same is not arising out of the order of the AO, which is incorrect. Accordingly, it was submitted that this can be sent back to the file of the AO for considering the afresh. 8.2 Learned DR did not object to the contention of the learned AR. 8.3 In view of the above facts and circumstances of the case, we set aside this issue to the file of the AO for deciding it afresh after affording reasonable opportunity of being heard to the assessee. We order accordingly. 9. The next issue in the appeal of the assessee for assessment year 2006-07 relates to charging of interest under Section 234B C, which is consequential in natur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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