TaxTMI 
TaxTMI 
2013 (2) TMI 96
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....ond part relates to the treatment of Short Term Capital Gains on sale of shares of Rs.60,40,698/- as business income. 3. Briefly stated the facts of the case are that for the year under consideration, the assessee filed return declaring total income at Rs.82,84,520/-. The same was selected for scrutiny assessment and accordingly notices u/s. 142(1) and 143(2) were issued and served upon the assessee. During the course of these scrutiny assessment proceedings, the Assessing Officer observed that in the return of income. Assessee has declared income from business and profession at Rs.(-7,41,125/-) income from capital gains at Rs. 69,34,401/- and income from other sources at Rs.20,89,279/-. The assessee has also shown speculation loss at Rs....
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....same has not been claimed as rebate u/s. 88E of the Act. 4. The AO thereafter discussed several judicial decisions and also CBDT Instruction No. 1827 dt. 31.8.1989. The AO finally completed the assessment by treating capital gains both Short Term and Long Term as income from business. 5. The assessee agitated this matter before the Ld. CIT(A) but without any success. The Ld. CIT(A) confirmed the findings of the AO holding that the assessee during the year under consideration has entered into numerous transactions of purchase/sale of shares of numerous companies. The maximum holding period was very short. The Ld. CIT(A) was of the opinion that volume and frequency of purchase and sale of the transactions was in large numbers. Purchase ....
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....unsel further submitted that considering the past history of the assessee and the orders of the Tribunal, there being no new facts for the year under consideration, the finding of the CIT(A) deserves to be reversed. 7. Per contra, the Ld. Departmental Representative strongly supported the orders of the lower authorities. 8. We have considered the rival submissions and perused the orders of the lower authorities. We have also have the benefit of the decisions of the Tribunal in assessee's own case in assessment year 2005-06 vide ITA No. 534/Mum/2004 and for A.Y. 2006-07 vide ITA No. 882/Mum/2010. On perusal of the statement of Long Term Capital Gain exhibited at page-3 of the Paper book, we find that the assessee has done following tra....
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.... U/s. 143(3) S. No. Holding period Short Term Gain(Rs.) Nos. of Scripts 1. 0-30 days 1,99,715/- 7 2. 31-90 days 19,10,512/- 15 3. 91-180 days (64,929) 3 4. 181-270 days 5,05,073/- 6 5. 271-360 days - NA Total 26,36,439/- 31 As compared to the above figures for the year under consideration, the assessee has done the following transactions: A.Y. 2008-09 U/s. 143(3) S. No. Holding period Short Term Gain(Rs.) Nos. of Scripts 1. 0-30 days 55,11,569/- 3 2. 31-90 days (8,13,350) 4 3. 91-180 days (11,82,921/-) 4 4. 181-270 days 27,11,864 6 5. 271-360 days (1,86,464) 4 ....
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....d the records and considered the rival contentions carefully. The dispute is regarding the nature of income from sale and purchase of shares by the assessee. The issue, whether the income from sale and purchase of shares in a particular case should be treated as capital gain or as business income has been a debatable issue and there are conflicting decisions of the Tribunal on this issue. Each case is, therefore, to be based on its own factual situation. In the present case, the assessee had held the majority of shares for a very long time, varying from more than 1 year to 10 years. The income is mostly from long term holding of shares. In some cases, shares have also been sold at short intervals of less than 1 year, resulting into Short Te....