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TMI Blog2015 (12) TMI 395X X X X Extracts X X X X X X X X Extracts X X X X ..... return of income for A.Y. 2006-07 on 22.12.2006 declaring total income of Rs. 5,78,53,059/-. The case was selected for scrutiny and thereafter the assessment was framed under section 143(3) vide order dated 30.12.2008 and the total income was determined at Rs. 5,80,19,770/- interalia by considering the income shown by the Assessee as short term capital gains as business income and by disallowing expenditure u/s. 14A. Aggrieved by the order of A.O., Assessee carried the matter before ld. CIT(A) who vide order dated 26.02.2010 granted substantial relief to the Assessee. Aggrieved by the aforesaid order of ld. CIT(A), Revenue is now in appeal before us and has raised the following grounds:- 1. The CIT(A) erred in law and on facts in holding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case cited supra. 3. On the facts and in the circumstances of the case and in law, the CIT(A) ought to have upheld the order of the Assessing Officer since the assessee has failed to disclose his true income. 4. Before us, ld. D.R. submitted that though the Revenue has raised various grounds but the solitary issue is with respect to treating the profits earned on sale of shares as "business income" as against as "short term capital gains" considered by Assessee. 5. During the course of assessment proceedings and on perusing the details filed by the Assessee, A.O noticed that Assessee had declared short term capital gains of Rs. 1,81,10,551/-. Considering the quantum of transactions and the value of transactions, the Assessee was asked ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng in shares : (i) An overall holistic view is required to be taken about the role of the assessee, keeping in view more than one parameter. (ii) An assessee's activities could simultaneously be that of investor as well as that of doing business in shares. 2.8. In the instant case, the appellant has a history of being an investor and claiming Short Term Capital Gains, a fact which cannot be ignored. Although it has shown a turnover of about Rs. 8 Cr, yet as rightly stressed by the Authorised Representative, firstly its main activities are related to shares of 5 scrips, Reliance being the predominant and secondly most of the transactions are delivery based. This becomes an important parameter to determine appellant's motive. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gains of Rs. 1,80,83,258/-, only Rs. 7,15,737/- pertained to shares held for 30 days or less and Rs. 56,47,946/- (Rs. 49,32,209 + Rs. 7,15,737) pertain to those transacted within 60 days. Balance of the gain about 2/3rd pertained to shares held for over 60 days. Normally, as a businessman, the assessee may not have carried forward such an inventory. It shows his investor people. 2.12. One must also note that also during the year the appellant has shown Long Term Capital Gains of Rs. 9,42,688/- a point which goes in assessee's favour while considering the overall picture. 2.13. Therefore, I think, from all the material on record and keeping in view the past history of the appellant, it is fair to say that the appellant is basically ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 88/- (shown of same value as claimed exempt in return of income) (ii) Short Term Capital Gains (net) -Transaction through demat A/c Rs. 1,80,83,158/- (iii) Short Term Capital Gains (net)-Not Transaction through demat A/c Rs. 27,193/- 2.17. Therefore, applying the ratio of the judgment of Bombay High Court in the case of Gopal Purohit (supra), the profit to the extent of Rs. 27,193/- only can be attributed to the business of share trading done by the appellant. 2.18. Therefore, to sum up,- (i) As far as this year is concerned, the appellant's transactions in shares are predominantly in the form of an investor. (ii) Only sum of Rs. 27,193/- can be stated to have been earned through the business of share trading. (iii) Bala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... days in the year. He also pointed to the summary of period of holding of the shares which have been reproduced by the ld. CIT(A) at page 13 of the order and from it he submitted that the short term capital gains earned on sale of shares sold within 30 days was only Rs. 7,15,737/- and the balance capital gains was earned where the holding period was more than 30 days. He therefore submitted that the decision of ld. CIT(A) calls for no interference and thus supported the order of ld. CIT(A). 7. We have heard the rival submissions and perused the material on record. The issue in the present case is whether the profit earned on sale of shares is required to be treating as "capital gains" or "business income". We find that ld. CIT(A) while deci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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