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TMI Blog2016 (8) TMI 1034X X X X Extracts X X X X X X X X Extracts X X X X ..... e return was processed u/s 143(1). Later the case was selected for scrutiny through CASS. 2.1 The AO noted that the assessee has shown an amount of Rs. 37,06,522/- as short term capital gains on sale of shares and an amount of Rs. 4,34,090 as short term loss on sale of derivatives. After setting off the said loss, the assessee has shown an amount of Rs. 32,32,432/- as short term capital gain and offered the tax @ 10% as per the provisions of section 111A of the IT Act, 1961. 2.2 On examination, the AO noticed that the assessee is purchasing and selling the shares on regular basis. In few cases there were cases wherein the shares were purchased and sold on the same day. In few cases the shares were held for even one day. The details of suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim of short term capital gains of Rs. 32,72,432/- u/s 111A was rejected and the same was treated as business income of assessee. 3. Aggrieved, the assessee carried the matter in appeal before the CIT(A). 4. Before the CIT(A), the assessee submitted as under: a) That the appellant is a salaried employee, the shares were purchased for the purpose of investment for earning profit. b) That the appellant was not involved in the business of buying and selling of shares. c) That the assessing authority has taken few transactions where purchases and sales were made on the same date to suit his view and not looked into other transactions where there was a gap between purchases and sales. d) As per the Board's Circular where the purchases a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us: 1. The Order of the Learned Commissioner of Income Tax (Appeals) -II, Hyderabad, is erroneous on facts and in law. 2. The Assessing officer as well as Commissioner of Income Tax (Appeals) -II, Hyderabad, erred in holding that the income of Short Term Capital Gains is 'Business Income' on the ground that the appellant did not invest in shares but carried on trading activity on regular basis. 3. The Learned Commissioner of Income Tax (Appeals) erred in treating the appellant as 'Trader' and not as 'Investor' and confirming the order of the Assessing Officer without considering the facts of the case and intention of the appellant to keep the shares as investment." 7. Before us, the ld. AR submitted that neit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt stand for the asst year 2008-09 (under consideration) contrary to the considered view both for the preceding as well as the subsequent years. Since the intention of the assessee mainly was to purchase shares for holding them as 'investment' only the gains arising from the sale of shares is assessable under the head 'short term capital gains' and not under the head 'income from business'. 8. The ld. DR, on the other hand, relied on the orders of revenue authorities. 9. Considered the submissions of the parties and perused the material facts on record as well as the orders of revenue authorities. The assessee has indulged in purchase & sale of shares, no doubt with the intention of making profit but intention and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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