TaxTMI 
TaxTMI 
2012 (12) TMI 567
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....ort term capital gain, and long term capital gain, from sale of shares in addition to income from the dividend and other sources. The AO noted that all the receipts of the assessee had arisen out of transactions in share except the bank interest. The AO also noted that the assessee was regularly purchasing and selling shares and in most of the cases shares had been sold either on the same day or within a few days. The AO, therefore, asked the assessee to explain as to why the income from sale and purchase of shares should not be treated as business income. The assessee submitted that he was both a trader as well as investor. The assessee was maintaining two portfolios; one for share trading and the other for investment. The shares on inves....
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.... as well as investment activity. The assessee had taken delivery of all the shares through the demat account. The assessee had sold some of the shares in a short period to protect the investment. CIT(A) also pointed out that the assessee had earned gain of Rs.1,58,072/- by holding shares for a period of 5 to 6 months and, therefore, the AO was not correct in stating that the assessee had held shares only for a few days in many cases. CIT(A) also referred to the decision of the Mumbai Bench of the Tribunal in the case of Hitesh Satishchandra Doshi vs. JCIT (12 taxmann.com 79) in which it has been held that all delivery based transactions had to be treated as investment at activity. CIT(A) accordingly accepted the claim of the assessee to dec....
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.... on investment account and income from these shares had been shown as capital gain. It was also submitted that transaction-wise details have been given in paper book which show that in many cases shares have been sold after three months. It was also submitted that assessee had also held certain shares for more that a year, and income from such shares had been declared as long term capital gain. He placed reliance on the decision of the Tribunal in the case of Gopal Purohit (supra), and some other decisions of the Tribunal and urged that the order of CIT(A) should be accepted. 5. We have perused the records and considered the rival contentions carefully. The dispute is regarding nature of income from share transactions entered into by the a....
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....tfolio when prices are falling or to encash investment in case of exceptional gain or for some personal exigencies. Each case is required to be examined carefully to ascertain the true nature of transactions. 5.1 In this case, the details of share transactions, resulting into short term capital gain have been placed on record in the paper book. A careful perusal of the same shows that most of the shares have been sold within 30 days which constitute about 72% of the transactions. The shares which have been sold within three months constitute about 90% of transactions. The percentage of share sold after six months is only 1% and all the shares have been sold within the year. The income from such transactions has been declared by the asses....
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....nt had been held for 2-3 years and revenue could not show any shares sold which had been purchased during the year or in the immediately preceding year. Therefore, only in respect of such cases, the decision in case of Gopal Purohit (supra), could be applied. The Hon'ble High Court of Delhi had upheld the decision of the Tribunal in the case of Gopal Purohit (supra), on the ground that there was no substantial question of law involved. Even before Hon'ble High Court, there was no question raised that all delivery based transactions have always to be treated as investment activity. Thus the decision of the Tribunal as well as the Hon'ble High court in case of Gopal Purohit (supra), cannot be considered as a precedent for the proposition that....