TaxTMI 
TaxTMI 
TaxTMI 
2013 (3) TMI 464
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....as under:- (1) On the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (A) has erred in deleting the addition of Rs. 1,76,26,326/- made on account of treatment of income from capital gains as business income. (2) The appellant craves leave to add, alter or amend any ground of appeal raised above at the time of hearing. 3. The ground raised in I.T.A. NO. 5019/Del/2012 (A.Y. 2009-10) read as under:- (1) On the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (A) has erred in deleting the addition of Rs. 62,93,563/- made on account of capital loss being treated as business loss, ignoring the facts that the assessee is treated to be engaged in the business of trading and in....
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....39,08,815/- out of such investments. In the assessment order passed by the Assessing Officer for the year under consideration, the Assessing Officer has treated the entire transactions as trading activities in shares and treated the income earned from such sale and purchase of shares as business income and added Rs. 1,76,26,326/- instead of short term and long term capital gain offered by the assessee in the return of income. 5.1 The Assessing Officer gave the following reasoning for not accepting the assessee's submissions. "a) The assessee is not maintain separate books of accounts for the alleged investments and regular business, no separate bank account is maintained for differentiating the alleged investment made and for business act....
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....x (A) further noted that most of the transactions of the assessee are from brought forward holding from preceding years which has been accepted as investments in earlier years. That it was observed from the balance sheet of the assessee that the assessee was maintaining separate account for investment and as well a stock in trade of the shares. The investment in shares has been shown from F.Y. 2003-04 and assessee has declared short term and long term capital gain on such investments over the years. The same have been accepted in Astt. years 2004-05, 2005-06 and 2006-07 in the scrutiny assessment. For Assessment year 2008-09 also no adverse view was taken by the department for the LTCG and STCG declared by the assessee in the return of inco....
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....e in shares with the intention to hold the same for long term appreciation and for earning dividends. However, in few cases the investment was off loaded after a short holding due to receipt of certain adverse market reports or because of short term funds requirements. 6.3 Ld. Commissioner of Income Tax (A) further observed that he was in agreement with the submission of the assessee that the period of holding of shares and non-receipt of dividend income was not a decisive factor for treatment of particular transactions as investment or trading transaction. Ld. Commissioner of Income Tax (A) noted that Circular NO. 4 of 2007 issued by the CBDT also does not prescribe any time limit for holding of shares where shares are purchased for inves....
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....by the appellant were for investment purposes and capital gains received on such sale is liable to be tax under the head short term capital gain and long term capital gain. Hence, the action of the Assessing Officer of treating the short term capital gain and long term capital gain as business income was not justified. I, therefore, directed the Assessing Officer to treat the surplus received on sale and purchase of shares as short term capital gain and long term capital gain as claimed by the appellant in the return of income. As a result, this ground of appeal of the appellant is allowed. 6.4 Further in this regard, Ld. Commissioner of Income Tax (A) relied upon the following case laws:- Commissioner of Income Tax vs. Gopal Purohit (201....
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....ange in the facts and circumstances of the case in the present year with that of earlier years wherein long term capital gain and short term capital gain has been accepted by the department. 8.1 We further find that all shares purchased are delivery basis. The holding period of the shares on which long term capital gain have been declared was more than 12 months and in the cases where short term capital gain has been declared, the holding period varies from few days to 7 to 8 months. We further note that Ld. Commissioner of Income Tax (A) is correct in observing that the period of holding of shares and non-receipt of dividend income was not a decisive factor for treatment of particular transactions as investment or trading transaction. One....