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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 ..... regular basis in purchase and sales of shares. The AO noted that the assessee has shown all the investments in shares under the head investment portfolio. The assessee has shown long term capital gain of Rs.38,104/- and short term capital gain of Rs.56,15,867/-. The AO noticed that the frequent transactions in purchase and sales of shares have been made during the year under consideration. The AO noted that 18,780 shares of difference companies were purchased on a single day i.e. on 17-11-2006.Though the assessee is showing purchase and sale of shares since long, however, the assessee has not shown any dividend income for assessment year 2005-06 & 2006-07. It is also noted that during these two years, only few days shares were held. Accordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee on account of purchase and sale of shares were treated as business income. 4. The assessee preferred appeal before the CIT(A), before whom the detailed submissions were placed. The details of purchase of shares between 0 to 30 days, 31-60 days, 61-90 days and more than 90 days were filed. Some of the shares were held for more than 366 days. All the above details are tabulated in the order of the learned CIT(A) at page 6. After considering the submission and perusing other material on record, learned CIT(A) was of the view that long term capital gain shown by the assessee has to be assessed under the head long term capital gain, however, in respect to short term capital gain, the CIT(A) found that the short term capital gain is on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee was purchasing the shares for the investment purpose also. It was further stated that the transactions of purchase were only 24 where the transaction of sales were 49 and total number of transactions of purchase and sales were 73. Most of these transactions were completed between 61 to 90 days. Therefore, in no manner, it can be said that the assessee was doing purchase and sale of shares for purpose of trading and not for the purpose of investment. 6. On the other hand, learned DR has placed reliance on the order of CIT(A). 7. After considering the submission and perusing the material on record, we are of the view that the assessee deserves to succeed in its appeal. The details of sale and purchase of shares have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 95 (Bom) and in the case of Gopal Purohit reported in 228 CTR 582 (Bom) , the similar issue has been allowed in favour of the assessee. The Hon'ble Supreme Court in the case of Associated Industrial Development Co. (P.) Ltd, reported in 82 ITR 586, has observed that, "Whether a particular holding of shares is by way of investment or forms part of the stock-in-trade is a matter which is within the knowledge of the assessee who holds the shares and it should, in normal circumstances, be in a position to produce evidence from its records as to whether it has maintained any distinction between those shares which are its stock-in-trade and those which are held by way of investment." By observing the same, the Hon'ble Supreme Court has catego ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in trade. This fact is also not denied by the revenue. The period of holding itself has been treated by the legislature to be a relevant consideration for determining whether the capital gain derived is a long term capital gain or a short term capital gain". These observations of the Hon'ble jurisdictional High Court squarely applicable on the facts of the case because if holding of shares for lesser period than the one prescribed, it will be regarded to be the business income. Dividing the capital gain into two parts i.e. the short term gain or the long term gain itself prove that the period of the holding cannot be the criteria for determining whether the profit derived by the assessee is a long term capital gain or short term capital ga ..... X X X X Extracts X X X X X X X X Extracts X X X X
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