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TMI Blog2016 (12) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... mber) 1. The Revenue is in appeal and the assessee has preferred cross-objections against the orders of the learned Commissioner of Income-tax (Appeals) relating to the assessment years 2006-07 and 2008-09. All these matters were heard together and are being disposed of by this consolidated order for the sake of convenience. I. T. A. No. 2321/Delhi/2010 and C. O. No. 224/Delhi/2010 (assessment year 2006-07) 2. Brief facts of the case are that during the year under considerations the assessee-company was engaged in the business of corporate finance consulting and advisory services to companies/groups including Government of India. It had filed its return of income declaring a total income of ₹ 1,46,03,588. The Assessing Officer noticed that the assessee had declared the business income at ₹ 21,52,974, short-term capital gains on sale of shares at ₹ 73,30,424, short-term capital gains on futures at ₹ 12,47,345, short-term capital gains on mutual funds at ₹ 5,63,033, long-term capital gain on shares at ₹ 19,33,968, long-term capital gains on mutual funds at ₹ 1,68,335. Since there were enormous transactions in sale/purchase of shar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital gain or short- term capital gain keeping in view the period of holding. Being aggrieved, the Department is in appeal before us and the assessee has filed cross- objection. 6. At the time of hearing the learned counsel for the assessee did not press the cross objection. He submitted that the assessee is holding shares as investment since 1996-97 up to the assessment year 2013-14. He referred to page 55 of the paper book wherein summary of capital gain and speculative income from shares has been shown as under : Asst. year Capital gains short-term Capital gains long-term Speculative profit/loss Consultancy receipts IT order 1996-97 0 0 0 23.26 143(3) 1997-98 -0.51 0 0 25.54 143(3) 1998-99 0 0 0 56.86 NA 1999-00 0.08 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness income, shall take into account the following . . . . (b) In respect of listed shares and securities held for a period of more than 12 months immediately preceding the date of its transfer, if the assessee desires to treat the income arising from the transfer thereof as capital gain, the same shall not be put to dispute by the Assessing Officer. However, this stand, once taken by the assessee in a particular assessment year, shall remain applicable in subsequent assessment years also and the taxpayers shall not be allowed to adopt a different/contrary stand in this regard in subsequent years ; (c) In all other cases, the nature of transaction, (i.e, whether the same is in the nature of capital gain or business income) shall continue to be decided keeping in view the aforesaid circulars issued by the Central Board of Direct Taxes. 8. The learned counsel referred to the order of the Income-tax Appellate Tribunal Delhi Bench C in the case of Deputy CIT v. Ganesha Securities (P) Ltd. [2016] 7 ITR (Trib)-OL 387 (Delhi) (I. T. A Nos. 1563/Delhi/2010, dated June 30, 2016) wherein after considering this circular and after taking note of the principle of consistency, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the contention of the appellant that the number of transactions have also become large for the reason that a particular quantity of shares intended to be purchased or sold cannot be purchased or sold in single transaction and it normally results multiple of transactions and in order to determine the capital gain each transaction has to be separately matched. Further, it has also been observed on the basis of facts of the case of the appellant that though there were purchases and sale of shares during the year but the total amount of investment in shares at the year end had been the same as in the last year, whereas the investment in mutual funds has substantially increased during the year from 0.32 crore last year to ₹ 2.19 crores at the end of the year under appeal. On the basis of the above facts the contention of the appellant that it had made investment in shares at the earlier stage but it had disposed of the same on account of fall in the market index and had subsequently made investment in mutual funds appears to be correct. This fact is also supported by details submitted by the appellant in respect of capital gain based on period of holding on the basis of which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5) also considering the facts of the case of the appellant it cannot straightway be said that it was not in the nature of capital gain and was in the nature of business income. Facts analysed hereinabove by and large goes to support the contention of the appellant that income was in the nature of capital gain. It has been observed in the decisions that overall facts and circumstances have to be taken into consideration in order to decide whether the intention of the assessee has been to trade in shares or to hold the same as investment. It has also been held in the cases that the number of transactions or volume add magnitude of purchase and sale cannot be the criteria for holding that income is in the nature of business income. Further, it has been observed that the Assessing Officer in the order of assessment has only considered the criteria of the number of transactions, which cannot be sustained in view of clear decisions in this regard particularly the decisions in the cases of Gopal Purohit v. Joint CIT [2009] 122 TTJ (Mum) 87 and Nirmal Kumar Jain v. Addl. CIT (supra). In fact in the case of Nirmal Kumar Jain the Income-tax Appellate Tribunal, Delhi Bench has specifically di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period of 30 days of purchase of shares that these shares had also been purchased by the appellant-company by way of investment and gain arising on sale of these shares should also be considered as short-term capital gain. In my view, it would be quite logical to hold that gain arising on sale of shares purchased within the period 30 days was in the nature of business income and not capital gain. I, accordingly, hold that gain of ₹ 1,76,361 earned by the company on sale of shares within a period of 30 days was in the nature of business income. Accordingly, I accept the contention of the appellant to the extent of short-term capital gain of ₹ 71,72,295 and hold that amount of ₹ 1,76,361 is in the nature of business income. This ground of appeal is partly allowed . 11. We do not find any reason to interfere with the findings of the learned Commissioner of Income-tax (Appeals) because the facts as recorded by learned Commissioner of Income-tax (Appeals) have not at all been controverted by the Department. Once the assessee was holding the shares as investment since 1996-97 up to 2013-14, there was no reason to treat the income from sale of shares under the h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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