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TMI Blog2011 (2) TMI 1476X X X X Extracts X X X X X X X X Extracts X X X X ..... cer of assessee as a trade. 3. The assessee in this case has declared income from long term /short term capital gains and income from business and profession. The Assessing Officer in this case observed that assessee was holding shares mainly of group companies including of Dabur India Ltd. as investment since long back. The assessee was also engaged in purchase and sale of shares and mutual funds mostly of Blue Chip Companies as stock-in-trade. During the year under consideration, assessee has transferred the shares of certain company as held in stock-in-trade upto 31.3.2004 at cost price as on 1.4.2004 as under:- Sl.No. Name of the company Quantity Amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration. It is observed that the company is having an investment portfolio and also held certain shares as stock in trade. The matter was put before the Board to convert these shares from stock in trade into investments. The resolution was approved by the Board and later on the appellant has followed the same method of valuation at cost price on permanent basis. It is observed from the details submitted before the Assessing Officer that the shares held in stock in trade have been converted into investments w.e.f. 1st of April, 2004. The value of acquisition has been taken to be the market value as on 31st of March, 2004. It is submitted by the counsel of the appellant that the difference between purchase price of the scrip and the market val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on 31st of March, 2004 was taken as the cost of acquisition of these shares were transferred to the investment portfolio. Later on the appellant had followed the same method of valuation at cost price on permanent basis. Part of theses shares were sold by the appellant during the year. The appellant had taken the closing value as on 31.3.2004 as the cost of acquisition and without taking the benefit of indexation, the difference between the sale price and the cost of acquisition has been offered for taxation as short term capital gain. It is worth mentioning here that whereas the shares held by the company in the trading account were transferred to the investment portfolio, however, the trading in mutual funds continues to be business act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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