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TMI Blog2015 (10) TMI 750X X X X Extracts X X X X X X X X Extracts X X X X ..... test namely that it is at the sole discretion of the respondent to determine whether a particular scrip is to be treated as an investment or a scrip in which he trades, is permissible in terms of the Circular No.4/2007 dated 15 June 2007. It is for the respondent assessee to determine how he seeks to treat a particular scrip i.e. as an investment or for trading. This intent would only be reflected in maintaining different accounts for the two. There is no allegations of shifting of scrips from trading to investment or vice versa. Moreover, it is also pertinent to note that the respondent – assessee had shown all its scrips treated as investments at cost, while those held as stock-in-trade were shown at cost or market value whichever is low ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : Mr. Suresh Kumar For the Respondent : Mr. P. J. Pardiwalla, Sr Adv. with Mr. S. G. Dalal i/b. Mr. S. G. Lakhani ORDER P. C. This appeal under Section 260A of the Income Tax Act,1961 (the Act) by the Revenue assails the order dated 2 January 2013 passed by the Income Tax Appellate Tribunal (the Tribunal). The impugned order is in respect of Assessment Year 2006-07. 2. The Revenue has urged the following questions of law for our consideration:- (A) Whether on the facts and in the circumstances of the case and in law, the Tribunal was correct in holding that the gains from the purchase and sale of shares and mutual funds are to be treated as Long Term Capital gains, ignoring that the volume and frequency of trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and, therefore, the entire income of ₹ 50.04 lakhs offered as 'long term capital gain' is to be taxed as business income. In the above view, the order dated 12 November 2008 of the Assessing Officer was upheld. 5. On further appeal, the Tribunal by the impugned order held that the respondent-assessee maintains two separate portfolios / accounts in shares and particularly one held as stock in trade and the other held as investment. The CBDT circular No.4 /2007 dated 15 June 2007 permits an assessee to maintain two portfolios of shares i.e. one comprising of shares and securities in which the assessee trades and the other which is an investment. It is also stated therein that any profit or gain arising out of shares held as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oth in investment as well as in its trading account/portfolios, (b) the stock-in-trade has full discretion to decide to show a particular scrip as an investment and a particular scrip as a stock-in-trade. Thus, it is submitted by Mr. Suresh Kumar on behalf of the Revenue that the stock-in-trade is trader of shares as found by concurrent findings of two authorities. Therefore, the Tribunal ought not to have interfered with the orders of CIT(A) and allow the respondent assessee's appeal before it. 7. We find that the twin test applied by the Assessing Officer and the CIT (A) to hold that the respondent-assessee is a trader in shares and mutual funds is not correct. As pointed out above, as per CBDT circular No.4/2007 dated 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is is not disputed by Mr.Suresh Kumar, the learned Counsel for the Revenue. Therefore, the issue arising in this Assessment Year should also have been a subject of enquiry in the assessment order passed in respect of preceding assessment year. Therefore, even on the principle of consistency no fault can be found with the impugned order. For the above reasons, we are of the view that the view of the Tribunal is a reasonable and possible view. 8. Accordingly, question (A) does not give rise to any substantial question of law and, therefore, not entertained. 9. So far as question (B) is concerned, the impugned order of the Tribunal has, merely followed the binding decision of this Court in 'Godrej Boyce Mfg. Co. Ltd. Vs. DCIT (328 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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