TaxTMI 
TaxTMI 
2012 (8) TMI 35
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....,190/- as long term capital gain as shown by the assessee and not as business income. 2) On the facts and in the circumstances of the case, the Ld. CIT(A) XIV, Ahmedabad ought to have upheld the order of the A.O. 3) It is therefore, prayed that the order of the Ld. CIT(A) may be set aside and that of the order of the A.O. be restored." 2. Brief facts till the assessment stage are noted by Ld. CIT(A) in para 2.1 of his order which is reproduced below: "The only effective gourd of appeal is against treating the shores term capital gain as well as long term capital gain of Rs.10,94,525/- as business income. The assessee is a director in Taiyab Securities Pvt. Ltd. a company dealing with share trading. During the course of....
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....nvestments and, therefore, the transactions in shares should have been held adventure in the nature of trade and should have been taxed as income from business and not as capital gain. The assessee was, therefore, asked by the A.O. vide his letter dt: 28-7-08 to show cause as to why both the short term & long term capital gain shown by him should not be treated as income from business and taxed accordingly. In response, the assessee, vide letter dt: 08-08-08 submitted its explanation as under. - Assessee's family is investing in shares IPOs since 1960. Assessee is filing return since it became adult in 1988 and onwards and its statement of income continuously shows dividend income with enclosed details, i.e. list of shares held....
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....gain on shares. vi) The investment in shares was over the period of last 25 years and the sale amount in current year was very negligible to my total investment value, vii) The appellant obtained overdraft and not loan, this O/D a/c. was used when it wanted to apply many IPOs with bigger amount, as appellant was engaged in main business of kerosene, oil & match boxes so to invest in shares other than its main business activities appellant keep these OD account to invest in IPOs. viii) About directorship in share trading company- this share trading company started in year 1999-2000 and investment was since last 25 years. ix) About shares investments shown in balance sheet as assets, it was clearly mentioned that the appell....
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...., the assessee has used borrowed money to purchase IPOs, the same were sold after a holding for more than one year and therefore, the gain should not be treated as capital gain and it definitely has the colour of business transaction. The A.O. further observed that on perusal of assessee's dealing in shares it was revealed that the trading in shares has increased only in last 5 years, i.e. after this company was started. Further the assessee has claimed interest expense against the interest income available, which fact alone was sufficient to prove that the transactions should be held as adventure in the nature of trade and should be taxed under the head business income. The volume of transactions and frequency of dealings in shares etc. al....