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TMI Blog2013 (12) TMI 1113X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 – All the surrounding circumstances should also be looked into – Decided in favour of assessee. - ITA No.7551/Mum/2011 - - - Dated:- 1-3-2013 - R K Gupta and D Karunakar Rao, JJ. For the Appellant : Shri Paresh Shaparia For the Respondent : Shri Rajarshi Dwivedi ORDER:- Per: R K Gupta: The assessee has preferred this appeal against the order dated 2-9-2011, passed by the CIT(A)-26, Mumbai, relating to assessment y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hased large quantities of shares in one go and sold them in small quantities over a period bulk and selling it in retail, which is just like a normal trader of any other articles. Therefore, the AO viewed that the assessee's intention is not for investment but for trading. Reliance was also placed in various case laws i.e. in the case of CIT Vs. Associated Indl. Development Co. Pvt. Ltd., 82 ITR 586 (SC), in the case of Barendra Prasad Ray Vs. ITO, 129 ITR 295, in the case of CIT Vs. Distributors (Baroda) Pvt. Ltd., 83 ITR 377 (SC) and many others. After applying the ratio of the aforesaid case laws, the AO concluded that the assessee has made purchase of shares of more than Rs. 7.5 crores and effected the sale of more than Rs. 8.15 crores. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n raised before the lower authorities were reiterated here before the Tribunal. The attention of the Bench was drawn at pages 3 to 6 of the paper book, where all the details in respect of purchase and sales of shares have been given. It was submitted that for assessment years 2005-06 2006-07, the short term capital gain shown by the assessee has been accepted by the AO himself. It was further stated that during the year under consideration, most of the transaction of shares were between 61 to 90 days as in this period the short term capital gain shown by the assessee was Rs.60,37,738/-, between 31 to 60 days, the short term capital gain was Rs.17,91,319/-. If these two components are taken into consideration, then it cannot be said that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents in shares. Holding period of shares in most of the case is between 61 to 90 days. It is not a case that the assessee is taking loans from various parties and investing in shares as the assessee has invested its own funds for the purchase of shares. Even otherwise, this is the assessee, who knows how to run his business activities. If he wants to purchase shares for the intention to keep them under the head investment portfolio, then there is no bar. Though he purchased shares frequently, it does not mean that the assessee's intention is to earn profit on trading account. This is the assessee, who knows to purchase some shares under the investment portfolio and if he finds that the market is going onward, then he sells the shares just t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 95 (Bom), the Hon'ble jurisdictional High Court has held that, 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 assessee as investment in his balance sheet in the earlier ..... X X X X Extracts X X X X X X X X Extracts X X X X
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