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TMI Blog2014 (2) TMI 1156X X X X Extracts X X X X X X X X Extracts X X X X ..... the income of assessee as business income by holding similar observations in all the three years. For the sake of convenience, the observations of the Assessing Officer in assessment year 2005-06 are reproduced below:- "As per Circular No.4/2007 dated 15.6.2007 distinction between the shares held as stock in trade and shares held as investment, following facts are to be considered. 1. Purchase and sale of shares will not itself be decisive of nature of transaction. 2. Magnitude of the transaction is also factor which can decided the nature of transaction i.e. whether it has stock in trade or it is an investment. 3. Important principle to decide the nature of transaction in sharers is motive behind the purchase, if motive is to earn pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transaction has been made by the assessee without operation of Demat A/c and she has never deposited any money nor any money has been withdrawn which clearly shows that the intention of the assessee to park the money with the broker was not to make investment in securities/stock but to earn profit and it was never investment of the assessee in stock. 2. On appeal before Ld CIT(A), the Ld CIT(A) treated the income of the assessee as short term capital gain by holding as under:- "Having carefully considered each and every relevant aspect of this case and the rival contentions, I hold that the Assessing Officer was not correct in making inference that the intention of the assessee was to do business in share market. This conclusion of mine i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such gain arising from purchase and sale of shares. x) In most of the instances, the shares have been held for sufficiency long time, which implies that the purchase of shares was made with an intention to invest and gain. 6.1. In view of the above various factual inferences, I agree with the appellant's contention that there is nothing to indicate that her intention was to do business in shares. On the other hand, all the facts support her contention that she is making investment in shares. 6.2. Therefore, I hold that the Assessing Officer was not correct in taxing the short term capital gain as a business income. The Assessing Officer is directed to accept the computation as shown by the assessee in her return. 3. Aggrieved, the reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gth of this letter it was argued that letter clearly instructed the broker that money was for investment in shares. He further argued that during preceding year the claim of the assessee regarding short term capital gain was not doubted and was accepted and even in succeeding years the claim was accepted and moreover in few transactions of shares in which period of more than one year had passed between purchase and sale, the Department had accepted the profit to be a long term capital gain.. Therefore, on the basis of continuity also the assessee was eligible for treating the gain as short term capital gain. Continuing his arguments the Ld AR submitted that the very fact that assessee did not withdrawn any money from broker's account itself ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years then merely because volume/frequency of transaction was more, it cannot be said that assessee was a trader in shares. 7. Reliance was also placed on the case law of Radha Swami Satsang 193 ITR 321 with the proposition that principle of uniformity and continuity should be applied when facts and circumstances are same. On the basis of these judgments, the Ld AR submitted that assessee had been declaring the investments at cost and was declaring as investment and not as stock in trade and had used the funds only on delivery based transactions and no borrowed funds were used. Therefore, all the judgments are in favour of assessee. In view of the above, it was submitted that Ld CIT(A) has rightly allowed the relief. 8. The Ld DR in her r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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