2006 (4) TMI 359

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....the transactions of shares as business and also claimed deduction of interest paid by him. Whereas the Assessing Officer held that it is investment of shares and shares were not treated as stock-in-trade. Hence, interest cannot be allowed under section 57 of the Act in view of section 14A of the Income-tax Act. For the assessment year 2000-01 assessments were framed under section 143(3) read with section 147 of the Act. For the other year, the assessment was framed under section 143(3) of the Act. 3. The learned counsel appearing on behalf of assessee argued on merit of the case that the income from share transaction is the business income of the assessee. He also challenged the re-opening of assessment under section 147 for the assessme....

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....s no reason for making a deviation during these two years. On the other hands, learned Departmental Representative, supported the action of the Assessing Officer and submitted that the assessee himself has shown the shares as investment and not stock-in-trade. It was further brought to our notice by the Learned Departmental Representative that during the assessment year 1999-2000 the Tribunal has allowed the assessee's appeal on the ground that re-opening was not proper and that year the Tribunal has not decided the issue on merit. 5. On consideration of materials on record, we find that the Assessing Officer in the assessment year 2000-01 rejected the claim of business income out of the share transaction on the ground that in the balanc....

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....e purchase of shares of at least 3 to 4 days. In the month of December 1999 purchases were made on 5 days. Similarly, sales were also effected on different days from 22-9-1999 up to the March 2000. On perusal of these details, we are of the view that the finding of Learned CIT(A) that there were some isolated transactions of purchase and sale of shares is not correct. From the details furnished by the assesee, we find that there was a regular sales and purchase of shares in each month apart from the family shares held by the assessee. These regular transactions only support the fact that the assessee was engaged in business in shares. This has been accepted by the Department from the assessment year 1997-98 onwards. Only because, shares wer....