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TMI Blog2017 (1) TMI 1206X X X X Extracts X X X X X X X X Extracts X X X X ..... in case of share transactions involving holding period of more than a month. - Decided against revenue Treating profits from share transactions even having nil holding period as short term capital gains - Held that:- Learned counsel fails to prove that the same are in any case delivery based transaction having purchase and sale instances on the same day. We thus do not deem it appropriate to adopt judicial consistency in the impugned assessment year in view of these peculiar facts. We however find force in assessee’s submissions challenging the CIT(A)’s directions to the Assessing Officer for treating his share profits having holding period upto 30 days as business income in absence of any such statutory provision contained in the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income. Both the learned representatives are very much unanimous that these two cases raise an identical issue about treatment of assessee s profits derived from share transactions only. 3. We come to relevant facts. The assessee an individual derives salary income from M/s. Dishman Pharmaceuticals along with income from other sources. He disclosed profits of ₹ 76,75,440/- derived from sale of share investments as short term capital gains. His total income reads a figure of ₹ 85,14,871/-. We further deem it appropriate at this stage to reproduce assessee share transactions details in the impugned assessment year as follows: 4. The Assessing Officer framed regular assessment in assessee s case on 31.12.2010 tre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to this considered finding. The relevant extract of this order is quoted below- 15. In respect of profit of ₹ 55,40,679/- being 'short-term capital gain' as claimed by the assessee and held as profits assessed under that business by two authorities, we find that in many cases there is delivery of shares and share were registered in the name of the assessee. The holding period of the shares IS from 'o' days to '366' days. In some cases, the frequency of transactions are apparently substantial as on one day the assessee has purchased several scripts and sold several of them on the same day. 16. The question is whether therefore, merely from frequency of the transactions carried on by the assessee, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment in the past. Thus, there cannot be a fixed criteria to decide as in the present case whether, assessee has traded in Shares eventhough assessee held them as investment. 18. Though it has been held in the case of Sarnath Infrastructure (P) Ltd. (Supra) that delivery of shares is an important criteria for holding that assessee is investing in them but after, dematization Where shares are delivered in the DEMA J account the next day, If cannot be held that In all such eases, It Would be Investment and not trading. If that is so held, then all those traders in shares In whose DEMAT accounts shares are Delivered can be said to have earned capital gains and not profits. Therefore, only one criteria i.e. Delivery of shares alone will n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital gain should be charged. Where shares are held for less than a month, gain on them should be treated as profit from business. 20. The assessee will give the working and Computing 'short-term capital gains' on the above basis. The rest of the profit will be treated as assessable under the head business . Following the decision of jurisdictional tribunal on this issue on similar facts, it is held that whenever the assessee has held the shares for the period more than 30 days, the same is treated as investment resulting in capital gain and wherever shares are held up to 30 days, the income arising there from is treated as business income of the appellant. Assessing officer is directed to recalculate the incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons having nil holding period or maximum a day or two. Learned counsel fails to prove that the same are in any case delivery based transaction having purchase and sale instances on the same day. We thus do not deem it appropriate to adopt judicial consistency in the impugned assessment year in view of these peculiar facts. We however find force in assessee s submissions challenging the CIT(A) s directions to the Assessing Officer for treating his share profits having holding period upto 30 days as business income in absence of any such statutory provision contained in the Act. Ld. CIT(A) has followed Sugamchand C. Shah s decision (supra). We find that another co-ordinate bench in ACIT vs. Smruti Shreyans Shah ITA No.3214/Ahd/2009 decided on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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