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TMI Blog2013 (12) TMI 1414X X X X Extracts X X X X X X X X Extracts X X X X ..... d 150 days - It cannot be considered that assessee's intention is to invest in shares as there is large turnover within a short period - The intention is not to make investments for long periods as the frequency of transactions is very high - Decided against assessee. - ITA No. 1380/Hyd/2010 - - - Dated:- 27-12-2013 - Shri D. Manmohan And Shri B. Ramakotaiah,JJ. For the Petitioner : Shri CP Ramaswamy For the Respondent : Shri B. Yadagiri ORDER Per B. Ramakotaiah, A. M. This appeal by Assessee against the Order of the CIT(A)-VI, Hyderabad dated 24.08.2010. The assessee is contesting the issue of treating the short term capital gain received by the assessee as business income. The assessee has raised three main grounds o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee is a 'trader' and not an 'investor' in shares on the fact that the assessee purchased the short term capital asset not with an intention to hold for a long period with a motive to derive a dividend. The Assessing Officer also laid emphasis while deciding the case of the assessee as a trader on Board's Circular 4/2007 dated 15.06.2007 stating that benefit u/s. 111A is to be determined on the basis of the short term capital asset whether is being purchased for investment or for trading purposes. On the basis of this observation, the Assessing Officer rejected the claim of the assessee u/s.111A and treated the short term capital gains on shares and profit on 'futures and options' as business income. 4. Before the CIT(A), the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer has categorically mentioned in his order that the appellant did not hold on to huge purchases made and instead re- entered into the same scripts. This contention of the Assessing Officer has been cleared in the submissions of the appellant wherein it was stated that the gains were reinvested as the appellant did not have a capital and it was done, for capital appreciation. It is also seen that the appellant dealt in futures options (F 0) and earned Rs.5,97,412/- from them and the appellant in his submissions stated that such a transaction has already been disclosed and is taxable under the head "Business Income". The Assessing Officer has mainly based the assessment order on the fact that the appellant sold the short t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stment and if profits were expected out of the said investment the appellant would have held her securities for a long period because she was always dealing in sale and purchase of listed companies. There is always a better returns if she had held on the shares of such listed companies for longer periods rather than monitoring the price fluctuations of such listed shares and made small and much profit. This profit is circulated for turnover, whether it is small or huge. Such a transaction with constant monitoring also involves a risk factor whereas for an investment no such risk is seen because there would be monetary gain in the form of dividends. Therefore, on the basis of the circumstances and and evidences on record, and from submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 6. The learned D.R. however, relied on the Orders of the Assessing Officer and CIT(A) and explained the transactions pointing out that assessee has entered the same scrip again and again. Therefore, the transactions cannot be considered as investment but only as trading activity. 7. We have considered the issue. Even though the department has accepted the assessee's incomes on the gains from the shares as short term capital gain in earlier year and also in later year, the facts in the impugned year do indicate that the transaction cannot be considered as investment in shares. The assessee has offered the entire income earned on short term capital gains to the extent of Rs.35,35,263/- under the head "Income from Capital Gain" and sub-h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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