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TMI Blog2014 (8) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... and LTCG holding - If the shares are held for less than 12 months, the gains will be treated as STCG - Except in one scrip, which is ‘Master Trust’, there is no evidence on record to show that the assessee has been churning same shares – the order of the CIT(A) is upheld – Decided against Revenue. - I.T.A. No.4198/Mum/2011 - - - Dated:- 23-7-2014 - Shri D. Manmohan And Shri N. K. Billaiya,JJ. For the Appellant : Shri R. K. Sahu For the Respondent : Shri Nirav Vora ORDER Per N. K. Billaiya, AM: This appeal by the Revenue is directed against the order of the Ld. CIT(A)-34, Mumbai dt.23.03.2011 pertaining to A.Y. 2008-09. 2. The sole grievance of the revenue reads as under: On the facts and in the circumst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee had taken deliveries of all the shares purchased and the transactions of purchase and sales have been routed through demat account. The assessee claimed that the gains may be treated as STCG and LTCG as declared by the assessee. 3.3. This submission of the assessee was dismissed by the AO. The AO observed that the assessee has transacted in110 shares during the year which clearly show that whatever was purchased is sold immediately. The motive of the assessee was to earn profit. The period of holding of the scrips was less than a month in majority of the scrips and the assessee has earned dividend of only ₹ 44,600/-. The AO went on to treat the STCG and LTCG as business income of the assessee. 4. Aggrieved, the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further submitted that the period of holding in most of the shares is less than one month. The Ld. DR finally concluded by stating that the AO had rightly treated the capital gains from the sale of shares as business income of the assessee. 7. The Ld. Counsel for the assessee reiterated what has been submitted before the lower authorities. 8. We have carefully perused the orders of the lower authorities and the relevant material evidence brought on record. The undisputed facts are that during the year under consideration, the assessee has entered into 85 transactions which means roughly 1.16 transactions in every 5 days or 6.98 transactions per month. By any stretch of imagination, this cannot be considered to be that the assessee wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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. 10. The Hon'ble Supreme Court in another case in P.M. Mohammed Meerakhan (P.M.) v/s CIT, [1969] 073 ITR 735 (SC), reiterated that it was not possible to evolve any single test or formula which could be applied in determining the transaction as adventure in nature of trade or not. The distinction between the two types of transaction is not always easy to make. Whether the transaction is of one kind or the other depends on the question whether the excess is an enhancement of the value by realizing the security or a gain in an operation of p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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