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TMI Blog2016 (12) TMI 490X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned CIT(A) arising from the assessment order 16th December, 2010 passed by the learned Assessing Officer (hereinafter called the AO ) u/s 143(3) of the Income-tax Act,1961 (Hereinafter called the Act ). 2. The grounds of appeal raised by the assessee in the memo of appeal filed with the Income-Tax Appellate Tribunal, Mumbai (hereinafter called the Tribunal ) read as under:- The Appellant objects to the order passed by the learned Commissioner of Income Tax (Appeals) - 23, Mumbai [CIT (A)] dated 05 March 2012 on the following amongst other grounds: 1. The learned CIT(A) erred in confirming the Assessing Officer's (AO's) action of treating the short-term capital gains of INR 2,47,33,233 as business income. 2. The learned CIT(A) erred in observing that purchases have been made with the clear intention of resale to earn profits. 3. The learned CIT(A) erred in holding that the appellant has indulged in business activity in view of the magnitude and frequency of transactions and low period of holding. 4. Without prejudice to the above, the learned CIT(A) erred in not directing the AO to allow expenditure which was incurred wholly and exclusively for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chased in order to gain more income by way of dividends and appreciation in the value of shares , and to sell shares as and when there was substantial appreciation in the value of shares. The assessee used to sell shares and to book profit and similarly used to purchase shares when market conditions were favourable by reinvesting the sale proceeds. It was submitted that the assessee has not borrowed any funds for making investments in shares and all the investments in shares were her own capital. The assessee has taken delivery of the shares purchased and similarly she has given delivery in respect of shares sold and the profit/loss resulting from such transactions in shares were declared short term capital gains or long term capital gains depending upon the period of holding of the shares. It was submitted that the assessee has not entered into any day to day trading or settlement of any transactions without delivery of shares or any futures or options transactions in shares and the assessee has not claimed any expenses such as S.T.T., interest, etc. or portfolio management fees from the profit made on sale of shares. It was submitted that the assessee has shown substantial profit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en by the assessee showing high frequency of dealings. The AO relied upon decision of Hon ble Supreme Court in the case of G. Venkataswami Naidu Co. v. CIT (1959) 35 ITR 594(SC) wherein the hon ble Apex Court has held that where purchase has been made solely and exclusively with intention to resell at profit and the purchaser has no intention of holding property or enjoying or using it, presence of such an intention is a relevant factor and unless it is offset by presence of other factors, would raise a strong presumption that transaction is in the nature of trade. The volume of frequency in the case of the assessee while dealing in shares is huge. The short term gain of ₹ 2,47,33,233/- has been derived from about 341 transactions and for this the assessee had sold shares to the tune of ₹ 35,14,65,076/- and the cost of their purchase was ₹ 32,67,31,843/- , whereby the period of holding was 1 to 30 days wherein number of transactions were 75 , while wherein period of holding was from 31 to 100 days the number of transactions were 126 , which showed that the maximum number of shares were sold within 3 to 4 months which clearly shows that shares were purchased to e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y assessments . The copies of the assessment orders are placed in paper book / page 32-37. It was submitted that even for the assessment year 2012-13 , the Revenue has framed the assessment u/s 143(3) of the Act and accepted the gains on sale of shares as capital gains . Thus it was submitted that the Revenue has accepted in all the years , that the assessee is an investor and the income has been accepted as capital gains and it has never assessed as business income except during the impugned assessment year. The said assessment order is placed in the file as submitted by the assessees counsel during the course of hearing before the tribunal. The assessee counsel also submitted that the assessee has also not availed any loan for the purposes of investing in shares/mutual funds. 8. The ld. D.R. relied upon the order of the ld. CIT(A). 9. We have considered the rival contentions and also perused the material available on record. We have observed that the assessee has been regularly assessed to tax in the past years and scrutiny assessments have been framed against the assessee for assessment years 2003-04, 2004-05, 2007-08 and 2012-13 u/s 143(3) of the Act wherein Revenue has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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