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TMI Blog2015 (1) TMI 363X X X X Extracts X X X X X X X X Extracts X X X X ..... s or figures to controvert this finding of the AO - merely because the assessee also is an investor in shares, it does not mean that he would not have done trading in shares this year - if the assessee had an intention of holding the shares as investment, then purchase and sale of shares in such volumes and at such high frequency is contradictory to such intention - Classification in the Balance Sheet is an indication but not a conclusive proof that the assessee is only an investor - The figures that are available does demonstrate that the assessee has traded in shares, in addition to him being an investor in shares - if a share is held for more than two or three months and then sold, the transaction cannot be properly classified as trading in shares - This segregation of profits between short term capital gain and business income requires a further analysis of the transactions – thus, the matter is remitted back to the AO for fresh adjudication – Decided in favour of revenue. - ITA No. 1369/Del/2012 - - - Dated:- 25-9-2014 - J. Sudhakar Reddy, AM And A. T. Varkey, JM,JJ. For the Petitioner: Shri O. P. Sapra, Adv. For the Respondent : Shri Kayur Patel, Sr.DR ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llate Authority granted relief. Aggrieved, the Revenue is in appeal before us. 4. Ld.D.R. Mr.Keyur Patel relied on the order of the AO and submitted that the assessee had huge turnover of more than ₹ 30 crores and most of the scrips have been disposed off, either on the same day or within two to three days, which demonstrates that the assessee was in fact trading in shares regularly in an organized and systematic manner, employing the facilities provided by the broker firm, in which the assessee was employed and hence the income in question was assessable under the head 'income from business' and not under the head 'income from other sources'. He took this Bench to the order of the AO and submitted that (a) the assessee cannot deny that his motive in buying and selling shares and to earn profit; (b) that the assessee has purchased shares not with a view to invest or earn dividend but only to earn immediate profits; (c) the assessee was engaged in numerous transactions of purchasing and selling a large quantity of shares in a systematic and organized manner; (d) that the assessee during the entire PY has entered into transaction of purchase and sale of share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ities below and case laws cited, we hold as follows. 7. The assessee is an employee. He works with M/s Infoline Ltd. which is a share broking concern. The fact that the assessee is an investor is not disputed by the Assessing Officer, as he has assessed the transaction of shares, which were held for more than one year, under the head 'long term capital gains'. The issue for adjudication is whether the assessee should be considered as an investor or as a trader, where shares are held for less than one year. 6.1. We now consider the propositions laid down by various Courts and Tribunals on this issue. The Hon'ble Delhi High Court in the case of CIT vs. Rohit Anand (2010) reported in 327 ITR 445 held as under: Where the Tribunal had found that the assessee was not a trader in stock but only an investor and that the assessee had demonstrated that his intenstion was never to trade in shares because the investment was out of his own funds, the investment was not rotated frequently, the total number of transactions was few, the treatment of the shares as investment in earlier years had been accepted by the Assessing Officer, the assessee had taken delivery and mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... long term capital gain which also shows that the assessee has held these stocks for a period of more than 1 year, f. The assessee has stated that all the transactions were delivery based, g. The assesee has filed details of holding period of all the shares and it is true that in majority of the shares the holding period has been shown to be less than 30 days that all the shares have been posted through d-mat account. 6.5. With these observations the First Appellate Authority has decided the issue in favour of the assesee. 6.6. The First Appellate Authority has not considered the fact that the assessee's investment was amounting to ₹ 55.64 lakhs, whereas the turnover in purchase and sale of shares was ₹ 31,72,15,256/-. Such huge turnovers definitely gives an indication that the assessee has done trading in shares. This is a case where the assessee was well equipped being an employee of a stock broking firm, having the entire infrastructure readily available for him, having knowledge, information and acumen for carrying on share trading. By no stretch of imagination an investor holding an investment of approximately ₹ 56 lakhs would have a trading vo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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