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TMI Blog2013 (1) TMI 1059X X X X Extracts X X X X X X X X Extracts X X X X ..... t Term Capital Gains at ` 14,41,279, Income From Long Term Capital Gains at ` 12,10,89,291, and Income From Other Sources ` 17,571, which do not include dividend income of ` 62,46,014, which has been claimed as exempt under section 10(34). Besides this, the assessee has shown business loss of ` (-)3,18,433. The assessee is regularly trading in shares and the capital accounts of the assessee revealed that all the receipts of the assessee are mainly on account of transactions in shares and securities. In the computation of income, the assessee has bifurcated these credit entries and offered the profit loss on sale of shares as Short Term Capital Gains or Long Term Capital Gains and business income separately. In view of the regularity, volume, turnover, period of holding of the shares and the value of the transactions in shares, the Assessing Officer formed an opinion that income under the heads Short Term Capital Gains and Long Term Capital Gains shown by the assessee falls into the category of Business Income . He further noted that the transactions of shares shown under Long Term Capital Gains and Short Term Capital Gains were in the following manner:- Long Term Capital Gain S.no. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iven from Pages-11 to 15, of the appellate order and the Assessing Officer s action for treating the same as Business Income was accordingly reversed. 6. Before us, the learned Departmental Representative relying on the detail findings given by the Assessing Officer submitted that the findings given in the earlier years cannot be held to be res-judicata in this year, as each year is independent. The Assessing Officer has brought on record sufficiently that the assessee has been dealing in shares regularly and has undertaken several transactions specifically those shown under the head Short Term Capital Gains . Thus, the income shown by the assessee in relation to such share transactions has rightly been taxed under the head Business Income . He, thus, strongly relied upon the order of the Assessing Officer. 7. The learned Counsel for the assessee, on the other hand, submitted that similar issue has been decided by the Tribunal in assessee s own case in the assessment years 2005-06, 2006-07 and 2008-09 and drew our attention to the various paragraphs wherein these issues have been discussed in detail. He also pointed out the status of various assessments wherein similar income shown ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,179 60 A.Y. 2005-06 U/s. 143(3) S. No. Holding period Long Term Gain (Rs.) Nos. of Scripts 1 1-2 years 35,20,327/- 11 2. 2-5 years 35,24,418/- 14 3. 5-10 years 84,79,577/- 24 4. 10 or more 4,99,450/- 7 Total 1,60,23,772/- 56 As compared to the above figures for the year under consideration, the assessee has done the following transactions: A.Y. 2008-09 U/s. 143(3) S. No. Holding period Long Term Gain (Rs.) Nos. of Scripts 1 1-2 years 1,14,44,923/- 14 2. 2-5 years 1,11,47,935/- 7 3. 5-10 years 48,01,498/- 12 4. 10 or more 25,589/- 2 Total 2,74,19,944/- 35 Similarly comparison of Short Term Capital Gain can be seen as under: A.Y. 2006-07 U/s. 143(3) S. No. Holding period Short Term Gain (Rs.) Nos. of Scripts 1 0-30 days 21,55,821/- 12 2. 31-90 days 24,92,433/- 11 3. 91-180 days 49,52,509/- 6 4. 181-270 days 7,38,740/- 5 5. 271-360 days 25,27,724/- 4 Total 1,28,67,227/- 38 A.Y. 2005-06 U/s. 143(3) S. No. Holding period Short Term Gain (Rs.) Nos. of Scripts 1 0-30 days 1,99,715/- 7 2. 31-90 days 19,10,512/- 15 3. 91-180 days (64,929) 3 4. 181-270 days 5,05,073/- 6 5. 271-360 days - NA Total 26,36,439/- 31 As compared to the above figures for the year under consideration, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been sold at short intervals of less than 1 year, resulting into Short Term Capital Gain and even in such cases, mostly the shares were held for more than 90 days. It is possible for an investor to sell shares after holding for less than a year in order to reshuffle portfolio, etc. In a similar situation, the Tribunal in Assessment Year 2005-06 in ITA No.534/Mum/2009 accepted the claim of the assessee as an investor. In that year, the assessee had shown Long Term Capital Gain of RS.1,60,23,772/- and Short Term Capital Gain of RS.26,36,004/-. The assessee had also shown small income from trading, for which separate accounts had been maintained. Further, in the Assessment Years 2002-03 and 2004-05, the AO himself accepted the similar income declared by the assessee as capital gain. The capital gain declared by the assessee was again accepted by the AO for the Assessment Year 2007-08 u/s.143(3). Considering the facts and circumstances of the case, in our view, it will not be appropriate to assess the income declared by the assessee from sale and purchase of shares as business income. We see no infirmity in the order of the CIT(A) accepting the claim of the assessee particularly, when ..... X X X X Extracts X X X X X X X X Extracts X X X X
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