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TMI Blog2016 (7) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee was to invest in shares to get gain from it on the basis of period of holding. Accordingly, he has disclosed short term capital gain in the return. After considering both sides, we have considered view that the assessee was in investment of shares not share trading. - Decided in favour of assessee - ITA No. 367/JP/2014 - - - Dated:- 6-6-2016 - SHRI T.R.MEENA, AM SHRI LALIET KUMAR, JM For The Assessee : Shri P.C. Parwal (CA) For The Revenue : Mrs. Roshanta Meena (JCIT) ORDER PER T.R. MEENA, A.M. This is an appeal filed by the assessee against the order dated 12/03/2014 of the learned CIT(A)-III, Jaipur for A.Y. 2009-10. The effective grounds of appeal are as under:- 1. On the facts and in the circumstances of the case the Ld. CIT(A) has erred in holding the finding of Assessing Officer that the short term gain declared by the assessee in return of income of ₹ 29,21,048/- earned on sale of equity shares as business income. Looking to the facts and circumstances of the case the treating the short term gain on sale of equity shares as business income is unjustified and bad in law. 2. On the facts and circumstances of the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treated as business income. The assessee filed reply vide letter dated 28/10/2011 and 04/11/2011. After considering the assessee s reply, the ld Assessing Officer analysed the income under the various heads earned during the year under consideration and found that major income from short term capital gain. The activity of the share buying and selling was done and the amount fetched by the same is a clear proof of the intentions of the assessee and lends support to the presumption that the assessee had no intention of holding the shares so bought and was solely driven by the market sentiments. He found that holding period and quantity of purchase and sale of shares was not investment but were made for the purpose of business to earn profit. The taking delivery and making full payment, paid security transaction tax cannot absolve the transaction from being business in nature. The share business can be done without any help of the stock exchange or share broker. The assessee s argument that the assessee had disclosed buying and selling of the shares in investment and regularly showing in return which has been accepted by the department, which were also not found convincing to the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that short term capital gain income claimed by the assessee at ₹ 29,21,048/- is a business income. 3. Being aggrieved by the order of the ld Assessing Officer, the assessee carried the matter before the ld CIT(A), who had confirmed the order of the Assessing Officer by observing as under:- 4.3 I have carefully considered the relevant facts related to this issue as stated by the AO as by the appellant. It is noted that the assessee has shown short term capital gain on the listed securities (STT Paid) for ₹ 2921048/- as per detail below: Name of the company/sc ript Sale price Date of sale Purchase cost Date of purchase Capital gain Period of Holding M/s Confi Shares 10130/- 25.3.09 6172/- 1.3.09 3958/- 25 days M/s Confi Shares 7236022/- 25.3.09 1220000/- 31.3.08 6016022/- 11 months 25 days M/s Confi Share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd income but to earn the profit at the earliest possible. The AO further observed that the assessee is a salaried person and purchasing of shares and is subsequent sales was not incidental to the regular trade or business as also that the magnitude of dealings of shares was also very large and some of the shares were held for less than 30 days whereas in some of the shares the holding period was less than 6 month. The AO also referred to CBDT Circular No. 1857 dated 31.08.2009 and instruction no. 4/2007 dated 16.06.2007 wherein certain guidelines lines are laid down for determination of the fact as to whether such transaction should be treated to be of business nature or of capital gain nature and as per AO the fact of substantial quantum of transaction, magnitude of purchase and sales and the ratio between purchase and sale holding essentially indicated that or such transaction were in the nature of business activity. On consideration of all the facts and circumstance discussed above it is noted that all the objections raised by the assessee has been properly dealt with by the AO. It is undisputed fact that the assessee is a salaried person and carrying on such dealing in shares ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O in holding whether the surplus generated from sale of listed shares or other securities would be treated as capital gain or business income. (a) Where the assessee itself, irrespective of the period of holding the listed shares and securities, opts to treat them as stock-in-trade, the income arising from transfer of such shares/securities would be treated as its business income, (b) In respect of listed shares and securities held for a period of more than 12 months immediately preceding the date of its transfer, if the assessee desires to treat the income arising from the transfer thereof as Capital Gain, the same shall not be put to dispute by the Assessing Officer. However, this stand, once taken by the assessee in a particular Assessment Year, shall remain applicable in subsequent Assessment Years also and the taxpayers shall not be allowed to adopt a different/contrary stand in this regard in subsequent years; c) In all other cases, the nature of transaction (i.e. whether the same is in the nature of capital gain or business income) shall continue to be decided keeping in view the aforesaid Circulars issued by the CBDT (i.e. Circular No.4/2007 dated 15th June, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT Vs Devasan Investment Pvt. Ltd. (2015) 229 Taxman 496 (SC) (ii) CIT Vs Smt. Renuka Ajay Maroo 217 Taxman 208 (Raj) (iii) Smt. Kavita Devi Agarwal ITA No. 1103/JP/2010. (iv) Tarujyot Investment Ltd. Vs. ACIT (2016) 46 CCH 0478 (Ahm)(Trib) (v) CIT Vs. Smt. Datta Mahendra Shah (2015) 235 Taxman 1 (Bom) (HC) (vi) Radials International Vs ACIT (2014) 103 DTR 316 (Del)(HC) (vii) Koradia Construction (P) Ltd. Vs. DCIT (2014) 146 ITD 251 (Mum) (Trib) (viii) CIT Vs Rohit Anand 327 ITR 0445 (Del)(HC). Therefore, he prayed to treat the short term capital gain as such. 5. At the outset, the ld DR has vehemently supported the order of the ld CIT(A). 6. We have heard the rival contentions of both the parties and perused the material available on the record. It is undisputed fact that the assessee had disclosed these transactions as investment in the return during the year under consideration. It is also a fact that the assessee was in investment in shares from 2000-01 to till date and in all the years, he has disclosed short term/long term capital gain on account of investment in shares which has been accepted by the department. The ld Assessing Officer as well as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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