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TMI Blog2016 (9) TMI 245X X X X Extracts X X X X X X X X Extracts X X X X ..... rlier years this was shown as a trading portfolio goes to prove that the claim from the assessee is merely bald. There was no evidence adduced by the assessee to show that some of the transactions were held as investment or to establish intention at the time of purchasing shares that the transactions were undertaken with a motive of investment. Therefore, in the circumstances, the CIT(A) is not justified to come to conclusion that the assessee is an investor without referring to any material or evidence. Therefore, we hold that the respondent-assessee is merely a trader in shares and profit arising on sale of such transaction should be assessed as business income. - Decided in favour of revenue - ITA No.803/Bang/2014, ITA No.1165/Bang/2013 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve decision, an appeal was preferred before the CIT(A). The CIT(A) held that the frequency and volume of transactions alone cannot be conclusive evidence to say that the assessee is a trader and therefore, accepted the contention of the respondent-assessee that he is only an investor. 4. Being aggrieved by this order of the CIT(A), the revenue is before us in the present appeals. The revenue raised the following grounds of appeal in ITA No.803/Bang/2014 for the assessment year 2005-06: 1. The order of the learned C1T(A) is opposed to law and facts of the case. 2. On the facts and in the circumstances of the case the learned CIT(A) erred in holding that the profits on securities transactions by the assessee should be treated as sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd in the circumstances of the case the learned CIT(A) failed to appreciate the fact that the assessee was indulging in regular purchase and sale of shares and deriving the profits which is clearly in the nature of trading business in shares. 4. For these and other grounds that may be urged at the time of hearing, it is prayed that the order of the CIT(A) in so far as it relates to the above grounds may be reversed and that of the Assessing Officer may be restored. 5. The appellant craves leave to add, alter, amend and / or delete any of the grounds mentioned above. Learned Departmental Representative vehemently argued that the CIT(A) had not considered any material facts to come to conclusion that the assessee is only an investor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rchases with a long term goal of earning income from investment and he is not tempted to sell the shares on every rise and fall in the market which are the attributes of a trader. The Hon ble Apex Court in the case of G.Venkata Swami Naidu Co. vs. CIT (35 ITR 594) held that in deciding the character of true nature of such transaction, following factors should be taken into consideration: i. Whether the purchaser was a trader and the purchase of the commodity and its resale were allied to his usual trade or business or were incidental to it. ii. The nature and quantity of the commodity purchased and resold if the commodity purchased is in very large quantity, it could tend to eliminate the possibility of investment for personal u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rove that the claim fo the assessee is merely bald. There was no evidence adduced by the assessee to show that some of the transactions were held as investment or to establish intention at the time of purchasing shares that the transactions were undertaken with a motive of investment. Therefore, in the circumstances, the CIT(A) is not justified to come to conclusion that the assessee is an investor without referring to any material or evidence. Therefore, we hold that the respondent-assessee is merely a trader in shares and profit arising on sale of such transaction should be assessed as business income. In the result, the appeals filed by the revenue are allowed. Order pronounced in the open court on 27th July,2016 - - TaxTMI - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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