TaxTMI 
TaxTMI 
2010 (11) TMI 145
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....,063/- as a STC Gain of Rs.11,11,063/- as a STC Gain instead of business income made by AO in his assessment order, ignoring the fact that : a) The assessee has deployed her fund with an intention of earning profit of such funds and there was no intention of the assessee to appreciate the investment so made during the year. b) The assessee has no intention to hold her shares in order to earn regular income out of such purchases. 2. On the facts and in the circumstances of the case and in law, the learned CIT (A) failed to appreciate the fact that the transactions is shown whether by herself or through her agent has to be treated as assessee's own transaction and the motive behind such transaction was to e....
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....resumption that transaction is in the nature of trade. It was also noted that dividend earned during the year amounted to Rs.94,259/-, which clearly shows the intention of the assessee to hold shares only for such period as may enable her encashing the appreciation in its value. It was in this background that the Assessing officer concluded that the assessee was engaged in the business of dealing in shares and, accordingly, gains on sale of shares are required to be treated as income from business and not capital gains. Aggrieved with the stand so taken by the Assessing officer, the assessee carried the matter in appeal before the CIT (A). 3. It was submitted by the assessee that she is a lady that she had no knowledge of trading ....
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....re of the commodity purchased and resold and in what quantity was it purchased and resold? Investments are made in shares and Mutual funds. 3) Did the purchase, by any act subsequent to the purchase, improve the quality of the commodity purchased and thereby make it more readily re-salable? No 4) What are the incidents associated with the purchase and resale? There are no activities of improvement associated with the purchase and resale, etc. Further full payment of the purchase and sale price and it was not a case of the transactions being squared off for the difference. 5) Were they similar to the operations usually associated with trade or business? No. In fact short term gains ....
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....ows:- "3.8 I have perused the assessment order, written submission and the judicial pronouncements relied in this case from either side. The most formidable controversy arising from the transfer of shares and securities is to determine the exact head of income in which the gains or loss has to be taxed, i.e. the same has to be taxed as business income or capital gains. This issue has assumed greater importance and the tax rate vary considerably under the two heads. The perception of the tax payers and tax authorities about the capital gains or the business income are at times so dramatically opposed to each other that there is effectively no meeting ground between these two extremes. 3.9 However, this case does not have the com....
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....this ground of appeal is allowed." The Assessing officer is aggrieved of the relief so granted by the CIT (A) and is in appeal before us. 5. We have heard the rival contentions and perused the record of the case. We have noted that so far as the present transactions are concerned, these transactions are undisputedly carried out by the assessee's Portfolio Manager and, therefore, these items are clearly in the nature of transactions meant for maximization of wealth rather encashing the profits on appreciation in value of shares. The very nature of Portfolio Management Scheme is such that the investments made by the assessee are protected and enhanced and in such a circumstance, it cannot be said that Portfolio Management ....