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TMI Blog2014 (2) TMI 599X X X X Extracts X X X X X X X X Extracts X X X X ..... y one day. Learned counsel for the assessee has filed an application in regard to condonation of delay explaining some inevitable circumstances. Hence, considering the facts of the case and the submission made by the learned counsel for the assessee, we condone the delay of one day in filing the appeal. Also heard on merit of the case. 3. The assessee is objecting in confirming the order of AO, whereby treating the income on account of sale of shares as business income against short term capital gain of Rs.48,92,720/- shown by the assessee. 4. During the assessment proceedings, the AO noticed that the assessee has shown capital gain on account of sale of shares. Details of shares were asked for. After considering the details of sales and purchases, the AO noted that the assessee has shown short term capital gain whereas more than 50% of transactions were having holding period of more than 2 months. The AO also noted that the assessee is doing purchase and sale of shares regularly and there is continuity of transaction. The AO after examining all these details found that the assessee's contention is of earning profits and, therefore, he held that the transaction of purchase an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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, perused the material on record along with the order of the tax authorities below. We have also gone through the case l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 assessee as investment in his balance sheet in the earlier year as well as during the year. In the earlier ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome 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 took the view that the shares held for a short period or for a number of days would not be capital gain. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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