TaxTMI 
TaxTMI 
2013 (5) TMI 552
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....m business. (ii) While doing so, the Ld. CIT(A) has erred both in not appreciating the factors like volume, period of holding, expertise, and intention of the assessee as criteria to determine the nature of transactions as adventure in the nature of trade and not as investment. 2. The appellant prays that the order of CIT(A) on the above ground be set aside and that of the Assessing Officer be restored. 3. The appellant craves leave to amend or alter any grounds or add a new ground, if necessary. 2. Assessee, an individual, trader in yarn and dealing in Securities, filed his return of income on 28-09-2008 declaring total income at Rs. 60.38 Lakhs. Assessment was finalised u/s.143(3) of the Income Tax Act, 1961 (Act) on 26-11-2010 by the ....
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....e shares with a view to earn income in form of dividend, that such investors are not motivated to sell shares on each and every rise in value of shares, that for deciding the question of taxability of share activities under the head 'Business Income'/'Income from Other Sources', that no single thumb rule could be applied, that parameters laid down by authorities in this regard included various factors like intention of the appellant at the time of purchase of shares, frequency of transaction, continuity, volume, holding period, treatment in Books of Accounts, use of borrowed/own funds and devotion of time to the activity, that individual parameters would not be decisive and it was only a cumulative effect of all these factors to decide the ....
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.... the shares, that the said shares were purchased from own funds available with the assessee. After considering the totality of the facts and parameters as laid down by the courts as well as CBDT, he held that assessee was an investor in respect of the shares and the profit arising out of shares sold amounting to Rs. 52.04 Lakhs were to be assessed under the head 'LTCG'. 4.1 FAA further found that assessee had also shown profit of Rs. 62.21 Lakhs from the sales of shares as STCG, that assessee had disclosed STCG from shares of Rs. 30.15 Lakhs in the immediately preceding year, that assessee had been consistently disclosing himself to be an investor in shares in respect of which he was offering income under the head 'Capital Gains', that the....
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.... had dealt with the shares in question as an investor and not as a trader, that shares represented his capital asset, that the profits of the assessee were in the nature of the investment activities and not of trading/ business activity, that profits on the sale of shares was therefore assessable in the hands of the assessee under the head 'Capital Gains', that Capital Gains of Rs. 52.40 Lakhs had arisen on sale of shares held for more than one year, that same was rightly assessee as LTCG, that Capital Gain of Rs. 60.21 Lakhs had arisen to the assessee to the sale of shares held for a period of less than one year, that the same was to be assessed as STCG. As a result, appeal filed by the assessee was allowed by the FAA. 5. Before us, Depar....
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....the criteria laid down by the CBDT. Not a single instance has been quoted by the AO about the frequency of shares, holding period of shares, entries in the Books of Accounts and other relevant factors. We find that FAA has dealt issue at length and has deliberated upon all the relevant facts which are decisive for settling the issue. Shares can be held as trader and as an investor also. Similarly, Profit/loss arising from share activities can be assessed under the head 'Business Income' or 'Income from Other Sources'. CBDT vide its Circular No. 4/2007 has indicated a few parameters to be investigated before deciding the issue. Courts/various benches of the Tribunal have also dealt the issue in many a cases. Now, it is universally accepted t....