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TMI Blog2015 (9) TMI 284X X X X Extracts X X X X X X X X Extracts X X X X ..... (A)'s order affirming the Assessing Officer's action treating its profits derived from share transaction amounting to Rs. 23,95,926/- as business income instead of short term capital gains. The Revenue's grievance on the other hand seeks to treat the remaining share profits of Rs. 8,52,221/- under the head business income in place of long term capital gains, as held in the lower appellate order. 3. A perusal of the case file reveals that they contain a common backdrop of facts. The assesssee-company trades in shares and securities. It declared business income from shares, short term and long term capital gains of Rs. 4,69,827/-, Rs. 23,95,326 & Rs. 8,52,221/-; respectively. The latter head comprised of a sum of Rs. 2,850/- relevant to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the different fail to understand, as to how learned A.O. has judged the intention at the time of purchase and at the time of finalisation of account. Learned A. O. has not clarified as to how and in what manner he has been able to understand and conclude the intention. The facts of the matter is, in the course of assessment proceedings, various details, including copies from the statutory records like Accounts maintained by us has been provided. From the copies of said Accounts, it is absolutely clear that at the time of purchase, shares acquired as Investments has been taken on the same day to investment Account and shares acquired for the purpose of trading business has been taken to Purchase Account. Copies of the said account are att ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r another 5 scripts, which has been held as investment for a period of less than twelve months and hence income has been correctly computed under the head short term capital gain. From the above facts, your honour would appreciate the basis on which conclusion has been drawn, itself from fact and reality. Thus considering the number of transactions, volume of business, assessee's capital & reserves and f/r%ainly intention of the assessee and accounting treatment given in the books of accounts, income has 3n correctly computed under the head capital gain and as none of the provision relating to business 'income are applicable on facts of the case, income assessed as business income need to be deleted and it may kindly be directed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... During the appellate proceedings the Ld. A.R was also asked to file a complete summary of long term and short term capital gains with the period of holding such shares. The summary filed by the Id. A.R is as under: Long Term Capital Gain Sr.No Name of the scrip No. of transactio ns Quantity Period of holding (Approx) Sales Price Purchase Price Gain (loss) 1 Nirma Ltd. 2 1300 32mths 4,69,058 3,27,970 1,41,088 2 Zee Telefilms Ltd. 1 6500 19 mths 11,12,213 4,87,500 6,24,713 3 Tata Chemicals Ltd. 1 1000 20 mths 1,65,811 71,500 94,311 4 IGL 1 1000 15mths 1 ,03,009 48,000 55,009 5 Shri Rama Multitech Ltd. 1 1700 30 mths 10,200 73,100 (62,900) Total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... months. It is pertinent to note that the appellant had made seven transactions in case of the shares of Gujarat Heavy Chemicals Ltd. in the span of seven to ten months. The frequency of transactions entered into by the appellant in such a short span clearly reveals its intention of trading in such shares. Apart from the above, it is further seen that in the case of Vishal Exports in the span of one month the appellant has made two transactions. Therefore, under these circumstances, I have no hesitation In holding that the appellant made trading in the shares which have been categorized as short term capital assets and on which surplus during the relevant period amounting to Rs. 23,95, 356 has been earned. In view of this such surplus cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal ITA No. 1028/Ahd/2010 is dismissed. 6. Thus leaves us with the issue of short term capital gains vis-àvis business income qua profits of Rs. 23,95,326/- in assessee's appeal. Suffice to say, these transactions relate to five scripts. This gross amount involves a sum of Rs. 22,09,327/- i.e. more than 90% arising from sale of M/s Guj. Heavy Chemicals scrips carried over from preceding assessment year only. This leaves behind other four scrips. Two of them have holding period less than a month i.e. 18 days and two days; respectively involving profits of Rs. 7,873/- and Rs. 2,600/-. We take into account non usage of borrowed funds, separate portfolio being maintained along with judicial consistency as in preceding assessment year a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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