9911796707
TMI Blog2015 (4) TMI 793X X X X Extracts X X X X X X X X Extracts X X X X ..... the business of trading of various commodities and the case of assessee was selected for scrutiny. During assessment proceedings, the A.O. observed that the assessee had declared short term capital gain of Rs. 43,31,685/-. From the details of sale and purchase of shares filed by assessee, the A.O. held that assessee was holding shares for a very brief period and ultimately the objective of the assessee was not to earn capital gain but to earn business income. Therefore, he treated the short term capital gain declared by assessee as business income. Aggrieved, the assessee filed appeal before Ld. CIT(A) and submitted various submissions. Ld. CIT(A) accepted the claim of assessee and passed a detailed and exhaustive order and allowed releif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12,32,550 14,41,494 13 days 4 M/s Arihant Foundation 1450 1450 7,46,408 7,56,774 0 days 5 Vishal Exports 100000 100000 3,10,612 2,34,087 14 days From the above table it is seen that appellant has dealt in the shares of Five Companies during the year. It has purchased shares of M/s Sterling Biotech from June-2006 to February-2007 and sold in the period June-2006 to March 2007. The holding period of the shares ranges from 8 days to 126 days. Similarly the appellant has purchased shares of M/s Sterling International Enterprises Ltd. in the Month of December 2006 and same were sold in month of December-February- March-2007. The holding period of these shares ranges from 70 days to 106 days. The shares of Deccan Chronic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res was done occasionally in few scripts just to maximize the wealth and to park the surplus funds available with the appellant. The appellant has claimed that there were no borrowed funds utilized by the appellant in making the investments. The appellant has claimed that his assessments for A.Y.'s 2005-06, 2006-07 and A.Y.'s 2008-09, 2009-10 have been done U/S 143(3) of the IT Act and the short term and long term capital gain declared by the appellant have been accepted by the ASSESSING OFFICER in all these years. The appellant has filed the chart of the short term and long term capital gain declared at page 33 of the paper book and has shown that capital gain / loss from sale of investment was as under:- A.Y. Capital gain decla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing officer has also mentioned that sale and purchase of shares is connected with the main business of the appellant which is not correct. In para 5.9 of the assessment order the assessing officer has mentioned that during the year appellant has purchased shares of Rs. 4246.26 lacs and sold shares of Rs. 4616.10 lacs. This observation of the assessing officer is factually incorrect. The appellant during the year investe Rs. 4.58 crore and sold shares of Rs. 5.01 crores during the year. This information is 1 e 0 e paper book submitted by the appellant. During the course of appellate proceedings, the appellant submitted that all transactions have been delivery based and were settled by way of payment. The transaction of investment and sale w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... saction as investment or trading transaction. It is further contended by the appellant that except in few cases the holding period ranges more than one month to three month. I am in full agreement with the submission of the appellant that period of holding of shares and non receipt of dividend income is not a decisive factor for treatment of particular transaction as investment or trading transaction. One has to see the intention of the person who is doing sale and purchase of shares. The Circular No.4 of 2007 issued by the CBDT also does not prescribed any time limit of holding of shares where shares are purchased for investment purposes. It is observed from the details filed by the appellant that it has made investment in the shares of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... term capital gain. Hence the action of the ASSESSING OFFICER of treating the short term capital gain as business income was not justified. I therefore direct the ASSESSING OFFICER to treat the surplus received on sale and purchase of shares as short term capital gain as declared by the appellant in its return of income. As a result this ground of appeal of the appellant is allowed. The ASSESSING OFFICER is also directed to delete the business income from the computation of income of the assessment order, as the income of the short term capital gain of Rs. 43,31,685/-is already included in the computation of income and the same is part of the returned income of Rs. 1,35,99,860/-." 3. Aggrieved, the Revenue is in appeal before us. 4. Ld. D. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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