2010 (8) TMI 1044

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..... 30 days as short term capital gain. 3. Facts of the case, in brief, are that the assessee, an individual and is proprietor of M/s Metro Exports, a concern engaged in the manufacturing and export of writing instruments. The AO during the course of assessment proceedings, noticed that the assessee claimed short term capital gains being income from share transactions at ₹ 25,69,800/-. From the various details furnished by the assessee the AO noted that the assessee is having a systematic and regular course of share transaction activities which is evident from the regular books of account maintained, keeping all the records, maintaining the details of sales and purchase of shares along with bills etc., maintenance of Dmat account and c .....

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..... ased through brokers of the companies listed on BSE and NSE and the shares are shown as investment in the balance sheet. Full payments of shares purchased are made, proper delivery of shares taken and shares are transferred to Dmat account. Some of the shares are also purchased directly from IPO. It was submitted that STT has been paid on each transaction and the share transactions are covered u/s.2(42) and sec.111A of the Income Tax Act. It was submitted that the shares are held for longer period ranging from 30 days to 230 days. The shares are shown at cost as on 31-3-2005 and no loss on account of fluctuation of market price has been claimed. It was further submitted that investment in shares are made to earn dividend. Referring to the d .....

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..... y market purchase and sale as business income/loss and to treat the surplus/loss on sale of shares held for more than 30 days as capital gains/loss. We find that the coordinate Benches of the Tribunal are now taking a consistent view that when there is frequency and voluminous transactions in shares on a continuous basis and the holding period is only for a few days, notwithstanding the treatment in the books of accounts of the assessee, the profit on such frequent purchase and sale of shares has to be treated as business income. Since in the instant case there is frequent purchase and sale of shares on a continuous basis with high volume transactions and the holding period is starting from zero days to a few days only, therefore, profits o .....

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