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TMI Blog2013 (12) TMI 470X X X X Extracts X X X X X X X X Extracts X X X X ..... n multiple occasions and in different quantities - Following ACIT V/s. Shri Anil Kumar Jain and another - The assessees have made several transactions of purchase of shares during the relevant year under consideration, and if there high volume, frequency and regularity of the activity carried on by the assessee in a systematic manner, it would partake the character of business activities carried on by the assessee in shares, and it cannot be said that the assessees have merely made investments in shares - The assessee has carried on the activity in a systematic and organized manner with an intention to earn profit - In subsequent assessment years i.e. in 2009-10 and 2010-11 also the assessee has treated the transaction in shares as business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gains in the shares. ii) Borrowed money was not utilised for investing in shares. iii) The "so called" loss in business sis only due to revaluation of shares as on 31-3-2008 and there is no real business loss to the assessee." The assessee filed a detailed reply to the show cause notice explaining the reasons as to why it should not be treated as an investment activity. The Assessing Officer however rejecting the explanation submitted by the assessee to treat the transactions in shares in the trading activity completed the assessment u/s 143(3) by holding the transactions of sale and purchase of shares carried on by the assessee to be an investment activity and as such is assessable as capital gains. On the aforesaid basis, the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction is tested with the parameters laid down by the jurisdictional high Court in the case of PVS Raju and Another V/s. Additional. CIT (340 ITR 75), then it will be clear that the dominant object is to do trade in shares and not to treat them as investment. This fact is also demonstrated in a tabular form in the written submission. The learned AR further submitted that the assessee has not only indulged in the activity of shares transactions as a trading activity but has also treated the shares as stock in trade in its books of accounts. The learned AR also relied upon a decision of the Income-tax Appellate Tribunal, Hyderabad Bench in the case of ACIT V/s. Sri Anil Kumar Jain and Another in ITA 163 and 164/Hyd/2011 dated 28-9-2012. The le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and circumstances involved in the case. No single criterion is decisive in determining the question whether a particular receipt is capital or revenue. 6. The jurisdictional High Court in case of PVS Raju and Another V/s. Additional CIT (340 ITR 75) after considering the ratio laid down in a number of decisions of Hon'ble Supreme Court and different High Courts laid down certain parameters for determining whether the sale of shares is to be treated as income from business or income from capital gain. The learned AR in his written submissions has attempted to substantiate the claim of the assessee by comparing the activity of the assessee in share transaction with the parameters laid down by the jurisdictional High Court in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s; (m) Frequency of purchase and sale of shares showed that the assessee never intended to keep these shares as investment; and (n) It is only for the purpose of claiming benefit of lower rate of tax, under sec. 111A of the Act, that they had claimed certain shares to be investment, though these transactions were only in the nature of trade." 7. On a perusal of the compilation of the Data by the learned AR as given in the table, it is seen that the frequency and regularity of buying and selling of shares, by the assessee is very high. The period of holding of shares is also very less. As per the figures given in the table, the assessee has held 1,16,139 shares for a period of one day to fifteen days only. The assessee has also made mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... frequency and regularity of buying and selling of shares, it is obvious that the assessee has carried on the activity in a systematic and organized manner with an intention to earn profit. The co-ordinate bench of the Tribunal while considering a similar issue in case of ACIT V/s. Shri Anil Kumar Jain and another in ITA Nos.163 164/Hyd/2011 dt.28.09.2012 following the ratio of the Jurisdictional High Court in case of PSV Raju (supra), held in the following manner:- "In the light of the above parameters and the decision of the jurisdictional High Court, on perusal of the statements incorporated by the Assessing Officer in the assessment order we find that the assessees have made several transactions of purchase of shares during the rele ..... X X X X Extracts X X X X X X X X Extracts X X X X
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