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TMI Blog2016 (9) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... d the shares as investment ans not stock in trade. Accordingly, we are of the view that the Revenue has wrongly treated the transaction of sale and purchase of shares of Munjal Auto as business income, whereas actually it is an investment and income arising out of the same is capital gains. We direct the Assessing Officer to assess the same as short term capital gain. - Decided in favour of assessee - ITA No. 5350/Mum/2011 - - - Dated:- 29-8-2016 - Sh. Mahavir Singh, JM And B.R. Baskaran, AM Revenue by: Ms. Vinita Menon Assessee by: Shri Vijay Mehta ORDER Per Mahavir Singh, JM This appeal by the assessee is arising out of the order of CIT(A)-27, Mumbai in Appeal No.CIT(A)27/Addl.CIT16(1)/220/07-08 Order dated 03.03 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used these funds for purchase of shares and after selling the same, claimed the same as STCG . The AO was also of the view that buying and selling of shares in short period and gain arising out of the same, that also by using borrowed funds definitely involves risk and it is organized activity, hence, same is business. According to AO, the assessee has also taken help from professionals and paid professional fee for sale and purchase of shares. Accordingly, he treated this STCG declared by the assessee at ₹ 18,41,755/- as income from trading in shares i.e. the business income. 4. Aggrieved, assessee preferred appeal before CIT(A). The CIT(A) also confirmed the action of the AO exactly on the basis of above findings vide para 7 of h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal. 3. Before us, the ld. Counsel for the assessee apart from taking us through the assessment order and the order of the CIT(A), drew our attention to the ledger account of Rohit Financial Services and stated that the observations of the lower authorities that loan funds were used for purchase and sale of shares is totally wrong. He narrated that the correct facts that there is outstanding balance as on 01.04.2004 of an amount of ₹ 66,56,623/- in the assessee s account on behalf of Rohit Financial Services and during the year the assessee has received amount and repaid also and final balance outstanding amount was ₹ 2,21,708/-. Ld. Counsel for the assessee also drew our attention to entries dated 2 3.8.2004, wherein an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me declared by assessee is LTCG in future years. Ld. Counsel for the assessee drew our attention to page 5 and 6 of assessee s paper book wherein computation of income is attached. Ld. Counsel for the assessee also took us through page-7 and 8 of assessee s paper book wherein the details of STCG on sale of shares are noted including the holding period which varies from 111 days to 211 days. He also drew our attention to the statement of STCG earned from sale of units of mutual funds, which is enclosed at page -8 of assessee s paper book. In terms of above facts and circumstances, ld. Counsel for the assessee argued that none of the authorities below has examined these facts in proper perspective and just by recording wrong facts decided the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 143(3) of the Act and the STCG declared by the assessee out of the same scrip i.e. Munjal Auto was accepted as it is. On similar facts, the Hon'ble Bombay High Court in the case of CIT vs. Gopal Purohit (2010) 336 ITR 287 (Bom) has held as under:- 2. The Tribunal has entered a pure finding of fact that the assessee was engaged in two different types of transactions. The first set of transactions involved investment in shares. The second set of transactions involved dealing in shares for the purposes of business (described in paragraph 8.3 of the judgment of the Tribunal as transactions purely of jobbing without delivery). The Tribunal has correctly applied the principle of law in accepting the position that it is open to an ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mstances are identical, particularly in the case of the assessee. This approach of the Tribunal cannot be faulted. The revenue did not furnish any justification for adopting a divergent approach for the Assessment Year in question. Question (b), therefore, does not also raise any substantial question. 5. In view of the above facts and circumstances, we are of the view that mere volume or magnitude does not alter the nature of transaction, which are consistently assessed as income from capital gains from past years and even in future years by revenue. Where the assessee was holding large magnitude of shares as investment from year to year and transaction of shares in preceding years as well for the future years had been held as income ..... X X X X Extracts X X X X X X X X Extracts X X X X
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