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TMI Blog2015 (3) TMI 720X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. What appears to have weighed almost conclusively with the tax authorities in the first and second instance is the value and frequency of the transactions. As underlined by us, that factor alone cannot be conclusive and would have to be weighed along with the totality of facts. An important detail which cannot be overlooked by the Court is that in all past periods and even subsequent periods, similar income reported by the assessee was accepted by the Revenue as short term capital gain. In fact for AY 2005-06, the scrutiny assessment under Section 143 (3) accepted the sum of ₹ 1.02 crores as short term capital gain. In the circumstances, it was all the more necessary for the Revenue to point to some unique feature or distinctive material to differentiate the assessee's activities for the subject assessment year, since they fundamentally remained the same and unchanged. Thus ITAT's findings and view cannot be faulted in the circumstances of the case - Decided in favour of assessee. - ITA No. 517/2012, CM No. 15387/2012 - - - Dated:- 3-3-2015 - S. Ravindra Bhat And R. K. Gauba,JJ. For the Petitioner : Mr Rohit Madan, Sr. Standing Counsel For the Respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessment 2003-04 LTCG STCG Intimation u/s 143 (1) of the Income-tax Act, 1961 ('the Act ) 2004-05 LTCG STCG Intimation u/s 143 (1) of the Act. 2005-06 LTCG STCG Assessment u/s 143 (3) of the Act, accepting the appellant as investor if and the gains as capital gains. 2006-07 LTCG STCG LTCG= Accepted by the Assessing Officer STCG=In dispute. 2007-08 LTCG STCG Intimation u/s 143 of the Act. 2008-09 LTCG STCG Assessment u/s 143 (3) of the Act, accepting the long term capital gains declared in the return. 11. It also emerges out from the record that assessee being investor has not been maintaining any office established or keeping any staff. He is also not registered with any authority or body such as stock exchange and SEBI etc. He is not maintaining regular books of account but submitted the details in respect of the investment before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... self has returned the income from such activities and how the Department has dealt with the same in the course of preceding and succeeding assessments. This factor, though not conclusive, can afford good and cogent evidence to judge the nature of transaction and would be a relevant circumstance to be considered in absence of any satisfactory explanation. (e) The fifth test, normally applied in cases of partnership firms and companies, is whether the deed of partnership or the memorandum of association, as the case may be, authorises such an activity. (f) The last but not the least, rather the most important test, is as to the volume, frequently, continuity and regularity of transactions of purchase and sale of the goods concerned. In a case where there is repetition and continuity, coupled with the magnitude of the transaction, bearing reasonable proportion to the strength of holding, then an inference can readily be drawn that the activity is in the nature of business. The above ruling was approved and applied in the judgment of this Court in Commissioner of Income Tax v. Central News Agency Pvt. Ltd., (ITA 1032/2011, decided on 9.9.2014). 6. Learned senior counsel fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest for it. Money is generally borrowed to purchase goods for the purposes of trade and not for investing in an asset for retaining. (3) Volume and frequency of the purchases and sale/disposals. If purchase and sales are frequent, or there are substantial transactions in an item, that can indicate trade. Habitual dealing in a particular item is indicative of intention of trade. Likewise, ratio between the purchases and sales and the holdings may show whether the assessee is trading or investing (high transactions and low holdings indicate trade whereas low transactions and high holdings indicate investment). Another related factor is the duration for which the shares are held. (4) Was the purchase and sale made for realizing profit, or for retention and appreciation in its value. The former indicates the purchases being part of trade; and the latter is indicative of the purchases being an investment. Furthermore, it would be relevant to ask whether the intention behind the purchase was to enjoy dividend, or merely to earn profit on sale of shares. Importantly, a commercial motive is an essential ingredient of trade in this context. (5) Whether the items in question w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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