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TMI Blog2011 (2) TMI 1486X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the year has shown share trading income, speculative loss, capital gains and income from other sources. During the assessment proceedings, the AO noticed that the capital account of the assessee shows that the receipts of the assessee are arising out of transactions in shares and securities. However, in the computation of income, the assessee has bifurcated these receipts and offered the profit and gains on sale of shares as capital gain as well as business income separately. The AO noted that the short term capital gain shown by the assessee was to the tune of ₹ 26,36,439/- as business income. The AO was of the view that looking into the volume, frequency and continuity in the purchase and sale of shares transactions which is regu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g term capital gain and submitted that the assessee has earned about ₹ 1,60,00,000/- as long term capital gain during the period and also earned dividend income of more than ₹ 33 lakhs. Thus, the intention of the assessee is clear from the investment in shares which are kept for long term and earning the dividend income there from. The short term capital gain of the assessee is ₹ 26,36,000/- and part of it was taxable under normal tax rates. The assessee was having only one loan of ₹ 1,58,000/- from Anush M Shah of the HUF which was taken temporarily for the purposes of investing in IPO and was repaid in the same year without any interest. The assessee has not claimed any expenditure against the capital gain on sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... um) 3 ITAT Order in ITA No.2735/Mum/2009 for AY-2005- 06 dt. 23.7.2010 Karishma V Shah V ACIT 4 ITAT Order in ITA No.2731/Mum/2009 for AY-2005- 06 dt.26.2.2010 Vinod V Shah V Shah V ACIT 5 ITAT Order in ITA No.181/Mum/2010 dt.3.12.2010 ACIT V/s Vinod K Nevatia 6 ITAT Order in ITA No.2733/Mum/2009 dt.15.12.2010 Nehal V Shah V/s ACIT 7 ITAT Order in ITA No.799/Mum/2009 dt.24.11.2010 DCIT V. M/s SMK Shares and stock broking pvt ltd 8 Delhi High Court order dated 18.10.2010 in the case of ITA No.306/2010 CIT V/s PNB Fina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties and institution. The members of AOP keeping watch on the market. The learned AR has submitted that he is guided by wrong and incorrect facts which does not pertain to the assessee. 8. We have considered the rival contentions and relevant record. The assessee is maintaining transactions in shares and securities under separate heads and portfolio under trading and investments and accordingly offered the income from sale of securities under different heads. The assessee offered the business income, short term capital gain, long term capital gain, dividend income and interest. The details of income are as under : Heads of income Income % of income Business income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gain was accepted. We further note that the total number of transactions relating to short term capital gain during the period on 49. Out of which 25 transactions of sale and 24 transactions of purchase during the period giving rise to the short term capital gain. Thus, the predominant intention of the assessee in selling and purchasing of the shares is earning long term capital gain and dividend income. The CIT(A) in paragraphs at page 17 of the impugned order has recorded certain facts as under : On all the three counts, it is clear that the appellant is dealing in shares in large magnitude. It does purchase and sales of shares in hundreds crores and it deals in lacs of scripts. Volume of shares is in hundreds of cores of transactio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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