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TMI Blog2017 (2) TMI 786X X X X Extracts X X X X X X X X Extracts X X X X ..... venue. - I.T.A. No.2474/Mum/2012 - - - Dated:- 15-2-2017 - SHRI G.S.PANNU, AM AND SHRI AMARJIT SINGH, JM For The Revenue : Shri Suman Kumar For The Assessee : Shri Anuj Kisnadwala ORDER PER AMARJIT SINGH, JM: The revenue has filed the present appeal against the order dated 31.01.2012 passed by the Commissioner of Income Tax (Appeals)-27, Mumbai [hereinafter referred to as the CIT(A) ] relevant to the assessment year 2008-09. 2. The revenue has raised the following grounds:- Revenue by: Shri Suman Kumar Assessee by: Shri Anuj Kisnadwala 1. The Ld. CIT(A) has erred in treating the transaction of purchase and sale of shares as STCG instead of business income. 2. The appellant craves leave to amend or a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... holding period of shares was of the two days and the assessee s turnover was to the tune of ₹ 4.26 Crores and the assessee only carried out the transaction in share purchase and sale and claimed as Short Term Capital Gain which is wrong. It is also argued that the assessee also used the borrowed funds to the tune of ₹ 1.01 Crores for the investment in the shares, therefore the nature of income of assessee is only business income and the assessee claimed the Short Term Capital Gain wrongly and illegally which has wrongly been held by the CIT(A) as income from Short Term Capital Gain, therefore, the order of the CIT(A) is wrong against law and facts and is liable to be set aside. However, on the other hand the learned representati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts constituted a capital gain or business profits, held that: (i) The assessee had been consistent in its practice of treating some shares as stock and others as a capital asset. While the shares held as capital asset were valued at cost in the accounts, the shares held as stock-in-trade were valued at the lower of cost or market value; (ii) There is no bar on a stock broker holding shares as an investment. The mere fact that the assessee is an expert in share trading does not mean that he cannot hold shares as a capital asset. The magnitude of the transaction does not change the nature of the transaction. (iii) It is no more res integra that a person can be both Investor as well as Trader in shares. (Draft Instruction No.2005 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the entire year can be considered as high volume when viewed in the background of the daily transactions carried out in BSE/NSE. 7.4 As can be seen from the data at above tables, transactions were not entered into continuously and regularly throughout the year. The appellant has not transacted at all during 120 days out of 250 working days during the year. This suggests that the appellant has not transacted during approx.. 50% of the total working days during the year. This clearly highlights that the transactions were not entered into frequently, continuously and regularly by the appellant. 7.5 The appellant has earned 46% of the total Short Term Capital Gains with a holding period more than 9 months and 57% of capital gains with a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant has enough capital to cover her investments in shares and the same cannot attributed to the aforesaid loan of ₹ 6 lakhs. Investment in shares as percentage of capital always showed the sufficiency of capital over the years as can be noted from table 1 above. Therefore, there is no truth in AO s observation that investment in shares was out of borrowed funds. 7.7 The stand of the appellant as an Investor has been accepted by the A.O. in the earlier under section 143(3). The assessment for A.Y.2007-07 was completed u/s.143(3) by DCIT Circle 2, Jaipur and the capital gains on sale of shares and securities were accepted and taxed as short term at ₹ 26,22,295/- and long term capital gain assessed at ₹ 1,86,846/-. Bes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n into consideration for arriving at the conclusion that the appellant is an investor the same are not reproduced. However to name a few Janak S. Rangwalla vs ACIT (11 SOT 627), CIT Vs. Gopal Purohit 228 CTR 582 (Bom.)(2010), CIT Vs. Rohit Anand (2010) 327 ITR 445 (Del), DCIT Vs. SMK Shares Stock Broking Pvt. Ltd. ITA No. 799/Mum/2009, Vinod K. Nevatia ITA No.6556/Mum/2009 and 181/Mum/2010 and Naishadh V. Vachharajani ITA No.6429/Mum/2009. 9. In view of the detailed discussion of the facts and the legal position and the back ground of the amended provisions on taxation of capital gains on sale of shares w.e.f.1/10/2004, I have no hesitation to hold that the income from short term capital gains offered to tax require no disturbance and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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