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TMI Blog2017 (5) TMI 1644X X X X Extracts X X X X X X X X Extracts X X X X ..... ght to be uniformity in treatment and consistency when the facts and circumstances are identical. Moreover, latest CBDT Circular No.6/2016 which is clarificatory in nature applies to listed securities and directs AO not to disturb the stand taken by assessee provided the same is applied consistently - their cannot be any straight jacket formula to distinguish the same and further there cannot be any single decisive factor to determine the same but an overall view has to be taken keeping in mind peculiar facts and circumstances of the case. We find ourselves in agreement with the view taken by CIT(A) that Appellant has carried out trading in shares as well as earned capital gains income on sale of shares which were held as investment. Acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from salary and trading in shares and reflected an amount of ₹ 2,62,28,530/- under the head Short Term Capital Gains against sale of certain scrips the holding period of which was more than 30 days. The gains from shares, the holding period of which was less than 30 days, were offered as Business Income. However, not convinced with the said classification made by the assessee and after appreciating the volume and quantity of shares traded by assessee, the Ld. AO concluded that the assessee was regularly engaged in share trading activity in business-like manner and hence the same was taxable as Business Income as against Short Term Capital Gain reflected by assessee. Another addition was related with Section 14A disallowance read with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cating the said transaction in the same manner which was accepted by the revenue all throughout and hence, there was no reason to disturb the same. Further, as per settled judicial pronouncements, the assessee could maintain two separate portfoliosone for business and another for investment, which has been done by the assessee. Further, no borrowed funds were used by the assessee to make the said investments and average holding period of the scrips was more than 72 days and the transactions were delivery based transactions which supports the action of the assessee in offering the income under the head capital gains. 6. The Ld. Departmental Representative asserted that the principle of res judicata was not applicable to Income Tax proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of corporate assessee; (vii) Typical holding period for securities bought and sold; (viii) Ratio of sales to purchase and holding. (ix) The time devoted to the activity and the extent t o which it is the means of livelihood. (x) The characterization of securities in the books of account and balance sheet as stockin- trade or investment. (xi) Whether the securities purchased or sold are listed or unlisted. (xii) Whether investment is in sister/related concerns or independent companies. (xiii) Whether transaction is by promoters of the company. (xiv) Total number of stock dealt in (xv) Whether money has been paid or received or whether these are only book entries . As per Circular No. 4/2007 it is possible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndustrial Development Co. (P.) Ltd. [1971] 82 ITR 586 (SC) has observed that:- Whether a particular holding of shares is by way of investment or forms part of the stockin- trade is a matter which is within the knowledge of the assessee who holds the shares and it should, in normal circumstances, be in a position to produce evidence from its records as to whether it has maintained any distinction between those shares which are its stock-in-trade and those which are held by way of investment. 8. Applying the above principals upon the case in hand, we find that assessee has chosen to treat the shares held for more than 30 days under the head investment . The assessee has sufficient owned capital to make these investments. The dealings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l the share transactions he had entered into. The Appellant had maintained two separate portfolios viz. investment portfolio and business portfolio. The appellant, on an average, has held scrips for around 72 days which also indicates that the shares were held for investment purposes. Had the intention been to earn business profits, the Appellant would have made an immediate turnaround so as to earn profits in short duration. The Appellant is investing and trading in the stock market based on his own knowledge and not with any professional help. The Appellant has held the stocks as on the last day of the year and which when subsequently sold were treated as long term capital gains by the AO. The Appellant has also earned dividend income of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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