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TMI Blog2015 (8) TMI 311X X X X Extracts X X X X X X X X Extracts X X X X ..... rm capital gain as business income. - Decided in favour of assessee. - ITA No.1980/Mum/2012 - - - Dated:- 18-12-2014 - SHRI I.P.BANSAL AND SHRI R.C.SHARMA, JJ. For The Assessee : Shri Vipul B. Joshi For The Revenue : Shri Love Kumar ORDER PER R.C.SHARMA (A.M.) : This is an appeal filed by the assessee against the order of CIT(A), dated 17-1-2012 for assessment year 2003-04, in the matter of order passed u/s.143(3) of the I.T. Act. 2. The only grievance of the assessee relates to treatment of short term capital gains as business income. 3. Rival contentions have been heard and record perused. The assessee has shown long term capital gain of ₹ 21,30,60,478/- on transfer of 36,042/- shares of M/s TECNIMO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt by department as on 31-3-2007, which was carried as opening investment as on 1-4-2007 and the same was sold during the year. 6. Merely because the assessee liquidates its investment within a short span of time, which had given better overall earning to the assessee, would not lead to the conclusion that the assessee had no intention to keep on the funds as investor in equity shares, but was actually intended to trade in shares. 7. Here, it is pertinent to mention the intention of Government for introducing the security transaction tax and exempt the long term capital gain earned from sale of shares and levying 10 % tax on short term capital gain earned on sale of shares. It is noted that under the old provisions of the Income-tax A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... priate head) is levied on the value of all the transactions of purchase of securities that take place in a recognized stock exchange in India. This tax is collected by the stock exchange from the purchaser of such securities and paid to the exchequer. The provisions relating to the securities transactions tax are contained in Chapter VII of the Finance (No.2) Bill, 2004, and came into effect from 01.10.2004. Further, clause (38) has been inserted in section 10 of the Income-tax Act, so as to provide exemption from long-term capital gains arising out of securities sold on the stock exchange. A new section 111A has also been inserted and section l15AD is amended, so as to provide that short-term capital gains arising from sale of such securit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anguage is at best an imperfect instrument for the expression of human thought and, as pointed out by Lord Denning, it would be idle to expect every statutory provisions to be drafted with divine prescience and perfect clarity. 9. The above observations of Hon'ble Judges of the Apex Court was reiterated by Hon'ble Apex Court in the case of Kerala State Industrial Corporation, 259 ITR 51 (SC) holding as under:- That the Finance Minister s Speech can be relied upon to throw light on the object and purpose of the particular provisions introduction by the Finance Bill has been recognized by this Court in K.P. Verghese - vs ITO 1981), 131 ITR 597 (SC), at 609. Again in the case of R B Falcon (A) Pvt. Ltd vs CIT (2008) 301 IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... term capital gain, it was held that the rule of consistency as propounded by Hon'ble Bombay High Court in the case of Gopal Purohit (supra), it is fairly applicable and the income has to be treated as short term capital gain. Identically in the case of Nagindas P Seth (ITA No.961/Mum/2010) it was held that despite large number of transactions in shares, the profit can be assessed as capital gains under the facts of the case. The case of the assessee is further fortified by these decisions more specifically when the assessee was hold the shares in his books as investor, as well as tock-in-trade separately. The decision in the case of Janak S Ranawala, 11 SOT 627 (Mum.) further supports the case of the assessee. Likewise, the decision fr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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