TaxTMI 
TaxTMI 
2012 (8) TMI 269
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.... heard and records perused. In the course of assessment, the Assessing Officer observed that the assessee had shown income from short term capital gains on sale of securities. Assessee has submitted separate audit report for the same showing the nature of business as 'investment in shares and securities'. The Assessing Officer observed that the assessee had entered into an innumerous transactions of shares and income has been shown on delivery based and non delivery based transaction. It shows that the assessee is carrying on business of trading of shares. He, therefore, asked the assessee to show why the short term capital gain earned by the assessee should not be treated as business income. The reply of assessee was as under. "The Ld. ....
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....h risk and in case of the assessee, it is a total absence of any derivatives based transaction, which proves that assessee's activity of the investment does not constitute the business activity but is made as an investment of the capital in well managed profitable companies. G. It is further submitted that there is no frequency of the buying and selling of the same script. The script once sold have never been again purchased by the assessee indicates that the intention of the assessee is investment in shares and not of trading. H. It is further submitted that the assessee is not having any professional knowledge or qualification of the capital market and the same facts cannot be neglected while ascertaining the exact nature of income.....
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....t as business profit. Precise observation and finding of the CIT(A) are as under :- "4.0 The facts on record, the AO's order and the submissions of the appellant and copies of documents filed have been gone through carefully and the following findings on the various gounds of appeal are recorded. 4.1 The details of share transactions done by the appellant during the year (Annexure A to appeal orders) are examined. It emerges that apart from purchase of 50000 shares of one Company Gremac Infra at Rs. 86/- per share on 11.04.07, which were sold in the months of July/Aug 2007 on seven different dates resulting in profit of Rs. 43,34,089/-, all other transactions were through application to Initial Public Offer (IPO) and the other scrip 9....
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....ttendant facts and circumstances of the case. Other tests as laid down in CBDT circulars and various judicial decision like regularity of transactions, dealing in numerous scrip's, voluminous transactions, dealings in Futures and Options etc. are all missing in the case of the appellant. Thus on overall consideration of facts and circumstances of the case, AO's action in treating share dealing transactions as business transactions is not found to be justified and proper and AO is directed to treat such income as Short Term Capital Gain as declared by the appellant." 5. Against this order, the Revenue is in further appeal before us. 6. We have considered the rival submissions and have gone through the orders of the authorities below an....