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TMI Blog2013 (9) TMI 1086X X X X Extracts X X X X X X X X Extracts X X X X ..... ies below and allowed the claim of the assessee. - I.T.A. No. 3225/Mum/2012, I.T.A. No. 3226/Mum/2012 - - - Dated:- 27-9-2013 - N. K. Billaiya ( Accountant Member) And Vijay Pal Rao ( Judicial Member) For the Petitioner : Hari S. Raheja For the Respondent : O. P. Singh ORDER Vijay Pal Rao ( Judicial Member) These two appeals by two assessees being husband and wife are directed against respective orders of Commissioner of Income Tax(Appeals) both dated 1.3.2012 for the assessment year 2008-09. 2. Since the common issue has been raised in both the appeals and the facts and circumstances are also similar therefore, these appeals are heard together and being disposed off by this Composite order. 3. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrying on the business of trading through F O future and options and also invests in shares and securities. The assessee has declared 53.5 lacs Long Term Capital Gain and ₹ 26 lacs as Short Term Capital Gain from sale of shares. Further the assessee has also shown dividend income of ₹ 9.16 lakhs during the year. The Assessing Officer did not accept the claim of Short Term Capital Gain on sale of shares and held that the assessee has carried the business of trading in shares and the profit arising from sale of shares to the tune of ₹ 25,99,025/- offered as Short Term Capital Gain was treated as business income of the assessee. On appeal, the CIT(A) has confirmed the action of the AO on the ground that the assessee himself d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the head investment. The assessee has earned the dividend of ₹ 9,17,000/- which also indicates the intention of the assessee in acquiring and holding the shares as investment. The assessee never treated the shares as its stock in trade and valued the same at cost and not as stock in trade. Thus, the Ld. AR has submitted that when the holding period in majority of cases varied from 4 months to 11 months then merely because the assessee is carrying out the activity in the FNO segment would not change the nature of transactions of purchase and sale of shares on delivery basis and retained by the assessee as investment. As regards the repetitive nature of transactions the Ld. AR has explained that in some of the scrips the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted out various scrips in which the assessee has carried out repeated transactions. 8. We have considered the rival submissions as well as relevant material on record. In this case the assessee has earned Long Term Capital Gain of ₹ 53.5 lakhs and Short Term Capital Gain of ₹ 25,99,025/. The assessee has carried out the total 79 transactions which give Short Term Capital Gain. From the facts of the case it is clear that the most of the transactions resulted Long Term Capital Gain of ₹ 53.5 lakhs in comparison to the Short Term Capital Gain of ₹ 25,99,025/-. Further the assessee has earned the dividend income of ₹ 9.1 lakhs however, the AO has mentioned the dividend income of ₹ 12.5 lakhs. Both the AO a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in which shows that the holding period of the shares was more than one year. Even the shares which has resulted Short Term Capital Gain the holding period is ranging from 4 months to 364 days which also shows that the holding period is long and the intention was not to realised the profit at the earliest possible occasion of rise in prices of the shares. The another important aspect is that the assessee has not used any borrowed fund for the purpose of purchase of shares and but the assessee has used his own fund for purchasing the shares. The treatment of the shares in the books of account has been shown as investment therefore, the valuation of the shares by the assessee was shown as cost being investment and not as stock in trade. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge so as to indicate that the intention of purchase and sale was not the investment but trading. Further when the Assessing Officer has accepted the claim of the Short Term Capital Gain in the earlier year then in the same facts and circumstances the rule of consistency has to be maintained as held by the Hon ble High Court in case of CIT Vs Gopal Purohit (supra). Accordingly, we set aside the orders of the authorities below and allowed the claim of the assessee. In Appeal ITA No. 3225 10. In the case of wife the facts are identical except the number of scrips being 29, Long Term Capital Gain of ₹ 92 lakhs, Short Term Capital Gain of ₹ 39 lakhs and dividend income of ₹ 12.5 lakhs. All other facts and circumstances ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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