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TMI Blog2015 (4) TMI 793X X X X Extracts X X X X X X X X Extracts X X X X ..... JJ. For the Appellant : Smt Parwinder Kaur, Sr. DR For the Respondent : Shri Suresh K Gupta, CA ORDER Per: T S Kapoor: This is Revenue's appeal against the order of Ld. CIT(A) dated 27.03.2012. The only grievance of Revenue is the action of Ld. CIT(A) by which he had deleted an addition of ₹ 43,31,685/- which was made by A.O. on account of short term capital gain declared by assessee as business income. 2. The brief facts of the case are that the assessee company is engaged in 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 ₹ 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Chronicle Herald were purchased on s October and sold on 18th October 2007. The holding period was 13 days. The appellant has also purchased shares of Vishal Exports and holding period was 14 days. In the case of Arihant Foundation the holding period was zero. The shares purchased during the F.Y. 2006-07 have been shown by the appellant as investment in its books of accounts and balance sheet. It is claimed by the appellant that these shares were purchased for investment purposes and same have been shown under the head 'investment portfolio& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (-)30,38,412/- 2,17,28,740/- Assessed U/S 143(3). Loss on capital gain allowed to be carried forward. 2009-10 (-)14,98,970/- (-) 14,98,970/- 2,95,42,170/- Assessed U/S 143(3). Loss on capital gain allowed to be carried forwards; The above table clearly established that appellant's investment in shares was accepted as investment and capital gain declared from such investment was accepted by the ASSESSING OFFICER in all these years except A.Y. 2007- 08. The facts of the appellant's case are similar in all these years and there is no material change. The appellant has claimed that it has paid STT on these sale and purchase of shares. During the course of appellant proceedings the AR of the appellant has drawn my attention to para 5.4 of the assessment order wherein the ASSESSING OFFICER has mentioned that the appellant's main business is trading in shares. This observation of the ASSESSING OFFICER is factually incorrect. As stated above the appellant is engaged in export and import of food grains, sugar, coals and acid etc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Sterling Biotech and Sterling International Enterprises, Deccan Chronicle, Vishal Export and Arihant Foundation during the year. However these shares were offloaded after holding for some time to maximize the wealth. The sale and purchase were done only in the shares of 5 companies during the year. Had the appellant engaged in the trading of shares, the frequency of sale and purchase would have been very high and it would not have been limited to the shares of five companie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years, where the assessment was completed u/s 143(3), the loss incurred by assessee was held to be capital loss and in support of his argument, Ld. A.R. invited our attention to page 26 of Ld. CIT(A)'s order where Ld. CIT(A) has noted down the treatment of such gain as capital gain. Ld. A.R. further submitted that no borrowed funds were used and he heavily relied upon the order of Ld. CIT(A). 6. We have heard rival parties and have gone through the material placed on record. We find that the assessee is engaged in the business of agro products and its total turnover from the said business is around ₹ 365 crores. We further find from the facts noted in Ld. CIT(A)'s order that assessee had carried out transaction in 5 scripts and holding period of which ranged from 8 days to 126 days. Moreover, it is observed that the assessee had classified the investment in the balance sheet as investment. We find that in previous years and in succeeding years, the income of assessee from similar activities has been held to be on account of capital gain and not on account of business income. Ld. CIT(A) has passed a detailed and exhaustive order in which we do not find any infirmit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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