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TMI Blog2016 (7) TMI 451X X X X Extracts X X X X X X X X Extracts X X X X ..... for making investment in the shares. It is the PMS provider who decides as to how much money is to be invested and in which scripts- all the decisions related with sale and purchase of shares are taken by the PMS provider. Thus treating the income from sale of shares is income from Short-Term Capital Gains (STCG) of 2. 99 Crores and Long-Term Capital Gains (LTCG) of 87, 471/- as against the business income assessed by the AO confirmed - Decided in favour of assessee X X X X Extracts X X X X X X X X Extracts X X X X ..... derivatives and were delivery was taken and future sales were made within 365 days as STCG/loss and wherever the shares had been held for more than 365 days the same was shown as LTCG. Accordingly, the AO treated the profits from all the share transactions as business income. 3. Aggrieved by the order of the AO, the assessee preferred an appeal before the First Appellate Authority (FAA). Before him, the assessee challenged the validity of reassessment proceedings. It was argued that the opening was result of change of opinion, that reopening was bad in law and illegal, that the AO had not observed the procedure laid down by the apex court in the case of GKN Driveshafts (India) Ltd. (259 ITR 19), that the AO had furnished the regions record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... availing the services of portfolio manager and treatment to be given to the share transaction was no more res-integra. He referred to the cases of Radha Birju Patel (supra) and Anusuya Suren Mirchandani (supra). He held that the issue had to be decided in view of the investment objective mandated by the assessee while engaging the PMS provider which was in the nature of discretionary PMS, that the PMS service provider had absolute discretion in taking day-to-day decision in so far as shares were concerned, that she would make the investment as per his own judgment and on the basis of own personal expertise without any recourse to the opinion of its client, that such decisions taken by the PMS provider are taken for a whole range of clients ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to how much money is to be invested and in which scripts- all the decisions related with sale and purchase of shares are taken by the PMS provider. We find that the case of Radha Birju Patel(supra)the Tribunal has decided the issue as under: 5. We have heard the rival contentions and perused the record of the case. We have noted that so far as the present transactions are concerned, these transactions are undisputedly carried out by the assessee's Portfolio Manager and, therefore, these items are clearly in the nature of transactions meant for maximization of wealth rather encashing the profits on appreciation in value of shares. The very nature of Portfolio Management Scheme is such that the investments made by the assessee are prote ..... X X X X Extracts X X X X X X X X Extracts X X X X
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