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TMI Blog2016 (5) TMI 1081X X X X Extracts X X X X X X X X Extracts X X X X ..... allotment of shares. We also find that there are no repetitive purchase and sale of the same script which means that there is no churning of shares. The total number of days utilized by the assessee for investment in shares is 32 days. Considering all these facts in totality, we do not find any reason to treat the assessee as a trader. We, therefore set aside the findings of the Ld. CIT(A) and direct the AO to treat the Short Term Capital Gain on sale of shares. - Decided in favour of the assessee - ITA No. 6568/Mum/2010 - - - Dated:- 5-4-2016 - Shri Joginder Singh, Judicial Member And Rajendra, Accountant Member For the Revenue : Shri Arvind Kumar For the Assessee : Shri Nishit Gandhi ORDER Per Rajendra A. M. Chal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, that income of the assessee had to be taxed under the head business/adventure in nature of business and not under the head short term capital gain, as claimed by him. 3. Aggrieved by the order of the AO, the assessee preferred an appeal before the first appellate authority (FAA).Before him, it was argued that the assessee was an investor, that in earlier years similar income by shown under the head short term capital gain, that he had made application in IPO as a retail investor, that he had made investments with borrowed funds knowing that the investment will give good return. After considering the assessment order and the submission of the assessee, the FAA held that the assessee had purchased the shares with borrowed funds for quic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent proceedings, the Assessing Officer noticed that the assessee has declared Short Term Capital Gain of ₹ 17, 26, 855/-.The AO further noticed that 90% of the income has been derived from one transaction which was on allotment of shares in IPO of FCS Softwares Solutions Ltd. The AO also noticed that the application in the IPO was made out of borrowed funds and the shares were sold within 5 days from the date of allotment. The AO was of the firm belief that the assessee has carried out business activities. The assessee was asked to explain why the Short Term Capital Gain should not be treated as business profit. It was explained that the assessee is an investor and was investor in past years also. The profit was booked on the allotmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... borrowed funds is no bar to make an investment in capital asset. The Ld. Counsel further stated that the assessee has dealt only in 19 scrips therefore considering the facts of the case, the findings of the Ld. CIT(A) are erroneous and deserves to be reversed. 6. Per contra, the Ld. Departmental Representative strongly supported the orders of the lower authorities. 7. We have carefully perused the assessment order and the order of the First Appellate Authority. It is an admitted fact that around 90% of the total gains is from sale of the shares of FCS Softwares Solutions Ltd. It is also an undisputed fact that the assessee had applied in the shares of the IPO of the said company from borrowed capital. Merely because the shares w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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