TaxTMI 
TaxTMI 
2013 (5) TMI 391
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....n the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that an amount of Rs. 17,04,884/- representing profit on sale of share is taxable under the head long term capital gain and is consequently exempt u/s 10(38) of the I.T. Act, 1961 overlooking the finding of the Assessing Officer that this amount represents profits and gains from trading in shares and is consequently taxable as income under the head profit & gains of business. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that an amount of Rs. 1,24,38,554/- representing profit on sale of shares and held by the Assessing Officer to be taxable as income from business is partly taxab....
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....sessee average holding of the share investments is more than 6 to 8 months for short term gain/loss. We have already submitted scripts wise holding wide our letter dated 21.10.2009. Had it not be investments the holding period would not be that much. (c) Dividend received The assessee has received dividend on shares invested. The assessee has invested the money to earn the dividend where the objects of the investments in shares of a company is to derive income by way of dividend then the profit accruing by change in such investments (by sales of shares) will yield capital gains and not revenue receipts. (as per the Authority for Advance Ruling AAR (288 ITR 641). The assessee has received dividend on almost all investments. (d) No. ....
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....hares. It dealt with in 16 securities during the year; though only 16 securities, transactions are numerous. c. That the appellant company cannot be termed as investor on the basis of frequency of transactions and number of scripts involved in the transactions. The appellant purchased and sold 1,45,280 shares which resulted in STCG and also sold 52,076 shares resulting in LTCG. The STCG was derived from 70 transactions for which assessee sold shares to the tune of Rs. 3,47,09,972/- and cost of purchase was Rs. 2,46,39,739/-. d. That the appellant company was purchasing shares in huge amount, not to hold them as investment, but to sell them at a later date. Out of total net gain of Rs. 1,41,43,438/- an amount of Rs. 1,24,38,554/- perta....
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....and has not borrowed any funds for making investments in shares. Various other factors were also submitted by the assessee before the CIT(A) in support of its contentions that the income earned from sales of shares cannot be held as business income. 5. The learned CIT(A) duly appreciated the assessee's contentions and after recording the detail findings, allowed the assessee's appeal, inter alia holding that income from sales of shares has to be taxed under the head of STCG and LTCG and not business income. The sum and substance of his conclusions are that the number of scripts purchased was 22, while the number of scripts sold was only 16. Further in case of LTCG the holding period was very high and in case of STCG the period of holding....
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.... etc.. He finally relied upon the decision of CIT vs Gopal Purohit (2011) 336 ITR 287 and submitted that the ratio laid down by the Hon'ble Bombay High Court are squarely applicable in this case as much as the assessee had shown all the shares under the head of 'investments' and income from similar transactions have been held to be 'capital gain' in the earlier years and all the transactions were delivery based transactions. The SLP, against said High Court, has also been dismissed by the Hon'ble Supreme Court vide order dated 15.11.2010 in SLP (Civil) No. 32891 of 2010. 8. We have heard the rival contention, perused the findings of the Assessing Officer as well as the CIT(A) and the relevant material referred to before us. In this case,....