9911796707
TMI Blog2015 (12) TMI 395X X X X Extracts X X X X X X X X Extracts X X X X ..... e transactions which were not transacted through Demat account is to be attributed to the business of share trading. Before us, Revenue has not placed any material on record to controvert the findings of ld. CIT(A). Further, it is also a fact that in the earlier assessment years, Assessee had offered the profits as short terms capital gains and the same was also accepted by the Revenue. No reason to interfere with the order of ld. CIT(A) - Decided against revenue - ITA No. 1424/AHD/2010 - - - Dated:- 16-10-2015 - Rajpal Yadav, JM And Anil Chaturvedi, AM For the Appellant : Shri Narendra Singh, Sr. DR For the Respondent : Shri S N Soparkar, AR ORDER Per Anil Chaturvedi, Accountant Member 1. This appeal filed by the Revenue is against the order of CIT(A), Gandhinagar, Ahmedabad dated 26.02.2010 for A.Y. 2006-07. 2. The relevant facts as culled out from the material on record are as under. 3. Assessee is a company stated to be engaged in two business activities namely stock broking and depository activities. Assessee filed its return of income for A.Y. 2006-07 on 22.12.2006 declaring total income of ₹ 5,78,53,059/-. The case was selected for scruti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ough 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 ₹ 1,81,10,551/-. Considering the quantum of transactions and the value of transactions, the Assessee was asked to show cause as to why the income on sale of shares not be treated as business income to which Assessee interalia submitted that the shares in question were shown as investments and not as stock in trade in its books of accounts, the gains were earned only on 6 scrips and in previous years the Department had considered the Assessee to be an investor and accordingly the profits on sale of shares were accepted as capital gains. The submissions of the Assessee were not found acceptable to the A.O in view of the fact that Assessee had purchased shares of ₹ 10 crore and sold shares of over ₹ 8 crore within the year, the holding period of the shares by the Assessee were extremely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hari (supra), a case relied upon by the appellant. It has also tried to reckon its case from the point of view of guidelines laid in by ITAT Ahmedabad in the case of Himanshu J. Shah (supra). I would generally agree with what he has said. The fact that the appellant has shown that these transactions (i) as investment in its books (ii) has not borrowed any finance to acquire the shares and (iii) has received reasonable amount of dividend, should go in its favour. 2.11. The chart of time period of holding the shares in question, as provided by the Authorized Representative and reproduced at page 13 ante, is also quite important. Out of the total; claim of Short Term Capital Gains of ₹ 1,80,83,258/-, only ₹ 7,15,737/- pertained to shares held for 30 days or less and ₹ 56,47,946/- (Rs. 49,32,209 + ₹ 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 ₹ 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one 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 ₹ 27,193/- can be stated to have been earned through the business of share trading. (iii) Balance sum of ₹ 1,80,83,258/- has to be taxed as Short Term Capital Gains . 2.19 Hence, this ground of appeal is partly allowed and Assessing Officer to rework his computation accordingly. 6. Before us, ld. D.R. pointed to the various findings and observations made by the A.O. He further submitted that the magnitude of transactions, volume of shares traded indicates that purchase and sale of shares was a business activity of the Assessee and not an investment activity and further submitted that the dividend earned was only ₹ 4.27 lacs as against the gains of ₹ 1.81 crore earned on the trading of shares. He further submitted that the principal of res judicata is not applicable to Income Tax matter and each assessment year has to be considered independently. He thus supported the order of A.O. Ld. A.R. on the other hand reiterated the submissions made ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
