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TMI Blog2024 (5) TMI 949X X X X Extracts X X X X X X X X Extracts X X X X ..... we are not very convinced. We find merit in the pleading made by Ld. AR for assessee that with the technological developments and volatility in markets, people have started taking decisions of purchase and sale every now and then. Therefore, the figure of 320 transactions spanned over a period of one year, should not be viewed otherwise. The assessee has also filed a statement showing holding period of delivery-tranactions which demonstrates holding period as low as 2 days but as high as 41, 44, 47 days also. As further established by AR, from the ITRs of earlier years, that the assessee had been doing delivery transactions in past also and showing income therefrom as short-term capital gain and such approach of assessee had been accepted by department, although in the assessments made u/s 143(1). Therefore, in such a situation, the CIT(A) has rightly applied the decision in CIT Vs. Merlin Holding Pvt. Ltd [ 2015 (5) TMI 794 - CALCUTTA HIGH COURT ] frequency alone cannot show that the intention was not to make an investment. The legislature has not made any distinction on the basis of frequency of transaction. The benefit of short-term capital gain can be availed for any period of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i, A.M.: Feeling aggrieved by appeal-order dated 26.12.2018 passed by learned Commissioner of Income-Tax (Appeals)-1, Bhopal [ Ld. CIT(A) ], which in turn arises out of assessment-order dated 07.10.2015 passed by learned ACIT, 1(1), Bhopal [ Ld. AO ] u/s 143(3) of Income-tax Act, 1961 [ the Act ] for Assessment-Year [ AY ] 2010-11, the revenue has filed this appeal on following grounds: (1) On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in considering the amount of Rs. 49,76,484/- as short term capital gain to be taxed u/s 111UA @ 15% out of total income from share trading of Rs. 57,28,867/- when the assessee was found to be involved in regular trading of shares. (2) On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in considering the income of Rs. 86,88,690/- as income from Long Term Capital Gain, when no sale deed was submitted during the course of assessment proceedings and transfer of land is claimed on the basis of written agreement on stamp paper and power of attorney? 2. Originally this appeal of revenue/appellant was dismissed vide order dated 07.07.2023 on account of low tax effect. Subsequently, the revenue came in M/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and purchase of shares and constitute business income u/s 28 of the Act. The assessee further submitted that the shares investment is his Investment Portfolio which comprise of shares of different companies. Assessee stated in his reply that there are shares of different companies and, therefore, to maintain the said portfolio, there are many times intra-day sales and purchases but those transactions should not be taken in isolation . The reply of the assessee was duly considered but not found acceptable since he himself accepted that there were many times intra-day sales and purchases of shares and he also offered in his written reply a sum of Rs. 7,52,383/- as business income from intra-day sales and purchases of shares. On verification of record available with this office and the written submission of the assessee, many transactions of shares were found to be intra-day sales and purchases of shares and thus constituting business income. Therefore, an amount of Rs. 57,28,867/- has been claimed under wrong head as Short-Term Capital Gain and same is treated as business income for calculation of the total income of the assessee and the tax thereon. 7. The CIT(A) has dealt this iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of appeal is partly allowed. 8. Before us, Learned Representatives of both sides made their respective arguments for and against the action of AO. While Ld. DR for revenue supported the order of AO, Ld. AR for assessee defended the order of CIT(A). Ld. DR emphasized that the AO has noted that there were many transactions of intra-day sale and purchase which constituted business income. He also contended that the whopping number of 320 transactions itself indicates that the assessee s case is like business activity and not investment activity, therefore also the AO has rightly assessed all transactions done by assessee during the year as business income. Per contra, Ld. AR for assessee submitted that it is true that while filing return, the assessee did not segregate intra-day transactions from delivery-based transactions and made a consolidated statement, filed at Page No. 117-127 of the Paper-Book. Although such consolidated statement itself shows the Dy. CIT, 1(1), Bhopal vs. Shri Prakash Bhojwani, Bhopal dates of purchase, dates of sales, etc. from which intra-day transactions could be easily picked up but the assessee s belief was since the intra-day transactions were done to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it 336 ITR 287 (Bom HC) where it was held thus: 2. The Tribunal has entered a pure finding of fact that the assessee was engaged in two different types of transactions. The first set of transactions involved investment in shares. The second set of transactions involved dealing in shares for the purposes of business (described in paragraph 8.3 of the judgment of the Tribunal as transactions purely of jobbing without delivery). The Tribunal has correctly applied the principle of law in accepting the position that it is open to an assessee to maintain two separate portfolios, one relating to investment in shares and another relating to business activities involving dealing in shares. The Tribunal held that the delivery based transactions in the present case, should be treated as those in the nature of investment transactions and the profit received therefrom should be treated either as short-term or, as the case may be, long-term capital gain, depending upon the period of the holding. A finding of fact has been arrived at by the Tribunal as regards the existence of two distinct types of transactions namely, those by way of investment on one hand and those for the purposes of business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry transactions in past also and showing income therefrom as short-term capital gain and such approach of assessee had been accepted by department, although in the assessments made u/s 143(1). Therefore, in such a situation, the CIT(A) has rightly applied the decision in CIT Vs. Merlin Holding Pvt. Ltd. (supra) where it was held thus: 6. These are the facts and circumstances, which according to him, go to show that the assessee primarily was in the business of dealing in shares rather than in the business of investment. The frequency of transaction highlighted by Mr. Saraf is not decisive on either side. Frequency alone cannot show that the intention was not to make an investment. The legislature has not made any distinction on the basis of frequency of transaction. The benefit of short-term capital gain can be availed for any period of retention upto 12 months. Although a ceiling has been provided but there is no indication as regards the floor, which can be as little as one day. When that is the position in law and the investor has adduced proof to show that some transactions were intended to be business transaction, some transactions were intended to be by way of investment and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by him. Further, a notice u/s 133(6) dated 01.10.2015 was issued and served on Shri Vipin Goel, the purchaser, to produce a copy of sale-deed, if any. In response to said notice Shri Vipin Goel vide letter dated 05.01.2015 has informed that no sale-deed was executed for the impugned land and that only a power of attorney was obtained from Shri Prakash Bhojwani for the sale of said land. LTCG should have been claimed according to the sale deed of the said property, which was not produced during the course of assessment proceedings, thus it is a violation of the provisions of section 50C of the Act. Therefore, an amount of Rs. 86,88,960/- has been claimed under wrong head as Long-Term Capital Gain and same is treated as income from Other sources for calculation of the total income of the assessee and the tax thereon. 13. The CIT(A) has dealt this issue in Para No. 9 of his order as under: 9. Ground Nos. 3 and 5 are against treating long term capital gain on transfer of land of Rs. 86,88,960/- as income from other sources. 9.1 The appellant had shown long term capital gain on transfer of land of Rs. 86,88,960/-. This was accepted in the original assessment. In the re- assessment ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transfer u/s 2(47) of the Act resulting in long term capital gain which had been rightly shown by the appeal in the return of income. If the AO was ,of the view that in absence of sale deed, capital gain was not chargeable, this could not have led to a conclusion that the entire consideration was income from other sources. As the acquisition of land by way of inheritance from parents, transfer through written agreement and receipt of consideration from the builder through banking channel is not in dispute and is supported by proper documentary evidences, the AO was not justified in treating the long term capital gain as income from other sources. In the facts and circumstances of the case, it is held that the action of the AO in treating the long term capital gain as income from other sources was incorrect unjustified and arbitrary. The long term capital gain shown by the appellant on this transaction is to be assessed as such as against income from other sources. These grounds of appeal are therefore, allowed. 14. Before us, Ld. DR for revenue submitted that there is no sale-deed of the impugned transaction, the assessee is claiming to have sold land on the basis of unregistered a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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