TaxTMI 
TaxTMI 
2013 (7) TMI 474
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....i) On the facts and in the circumstances of the case and in law, the Commissioner of Income Tax(Appeals) erred in not appreciating the fact that till Assessment Year 2005-06, the assessee has been showing his income from dealing in shares under the head business income only." 3. The assessee has claimed Short Term Capital Gains (STCG) of Rs. 3,44,93,842/- u/s 111A arising from transfer of shares. The Assessing Officer noted that there is a huge frequency of transactions in shares throughout the year and holding period of these shares was very short. Accordingly, the assessee was asked as to why it should not be considered as business income instead of STCG claimed by the assessee. 3.1 After considering the magnitude and frequency of transactions as well as the ratio of sales to purchases and the total holdings, the Assessing Officer held that the purchases have been made solely and exclusively with the intention to resale to earn profits and the assessee had no intention of holding the shares or otherwise enjoying or using the same. Hence, the Assessing Officer treated the gains arising from sale of share as business income instead of STCG claimed by the assessee. 3.2 On a....
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....see in the earlier Assessment Year was treated as investor, would not stop the Assessing Officer from considering for the purpose of computation of profit in the subsequent Assessment Year. 4.1 The ld DR has further submitted that the Commissioner of Income Tax(Appeals) has relied upon the decision of the Tribunal in the case of Gopal Purohit which has been confirmed by the Hon'ble jurisdictional High Court. However, in the case of Gopal Purohit, the decision of the Hon'ble Supreme Court in the case of New Jehangir Vakil Mills Co. Ltd. (supra) has not been considered; therefore, the decision of the Hon'ble Supreme Court has to be followed on the point. He has further submitted that the Commissioner of Income Tax (Appeals) has given the finding by considering incorrect facts regarding no employees employed by the assessee whereas in the assessment order, the Assessing Officer has recorded that the Accountant of the assessee attended the assessment proceedings on behalf of the assessee. Therefore, the assessee employed an Accountant which has not been disputed. He has further submitted that the Commissioner of Income Tax (Appeals) has observed that the assessee was not in the busi....
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.... Acc Ltd. 08.03.07 750 2364580 09.03.07 2620149 255569 1 day Adani Exports Ltd. 09.05.06 3200 402920 17.05.06 582775 179855 8 days Aditya Birla 04.04.06 1650 1235216 10.04.06 1450004 214788 6 days Aditya Birla 04.04.06 1650 1235216 10.04.06 1450004 214788 6 days Alstom Project 01.11.06 3000 1275358 02.11.06 1404969 129611 1 day Alstom Project 19.10.06 1650 683858 26.10.06 798786 114928 7 days Apollo Hospital 09.11.06 2000 966302 10.11.06 1073547 107245 1 day Aurobinda Pharma 22.05.06 1285 675485 24.05.06 768922 93437 2 days Aurobinda Pharma 21.04.06 1905 1243696 27.04.06 1394908 151212 6 days Aurobinda Pharma 21.04.06 1905 1243696 27.04.06 1394908 151212 6 days Axon Infotech 12.07.06 2025 98047 02.11.06 300733 202686 113 days Axon Infotech 03.07.06 20000 999735 29.09.06 3062400 2062665 88 days Axon Infotech 06.07.06 10000 502130 06.10.06 1579800 1077670 92 da....
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.... Ind. Bank Merchant 18.09.06 5000 15025 23.01.07 120600 105575 127 days Ind. Bank Merchant 16.09.06 2500 75125 16.01.07 500750 425625 122 days Ind. Bank Merchant 14.09.06 1000 30225 16.01.07 200300 170075 124 days Ind. Bank Merchant 14.09.06 1500 44725 16.01.07 300450 255725 124 days Ind. Bank Merchant 12.09.06 1000 30175 10.01.07 186400 156225 120 days Ind. Bank Merchant 13.09.06 3000 90862 12.01.07 572100 481238 121 days Ind. Bank Merchant 05.09.06 2000 59285 10.01.07 372800 313515 127 days Ind. Bank Merchant 06.09.06 3000 89550 10.01.07 559200 469650 126 days Ind. Bank Merchant 08.09.06 2000 59600 10.01.07 372800 313200 124 days Ind. Bank Merchant 13.09.06 2500 75718 16.01.07 500750 425032 125 days Indian Oil Corp. 14.08.06 4500 1889484 17.08.06 2131592 242108 3 days Indian Oil Corp. 14.08.06 9000 3776149 17.08.06 4266991 490842 3 days Jaiprakash Asso. 04.09.06 1165 5027905 05.09.06 ....
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....6 1100 9257597 04.09.06 9833213 575616 4 days Tata Power 14.03.07 7500 3579607 15.03.07 3914625 335018 1 day Tata Power 26.06.06 9231 3912380 29.06.06 4421042 508662 3 days TISCO 24.05.06 2395 1150517 29.05.06 1354495 203978 5 days Wipro 12.04.06 2743 1419454 17.04.06 1479097 59643 5 days Wipro 10.04.06 3250 1681836 17.04.06 1752512 70676 7 days Demat Charge 01.04.06 15077 31.03.07 0 -15077 Service Charge 01.04.06 162035 31.03.07 0 -162035 Total 132287928 166781770 34493842 5.1 There are 86 transactions of sale carried by the assessee during the year. The holding period of the transactions varies from one day to 244 days. Out of 86 transactions, the holding period in respect of 42 transactions is upto 7 days. Thus, it is clear that about 50% of the total transactions of sale of share during the year, the holding period is only upto 7 days. Further, as pointed out by the Assessing Officer that the assessee ha....
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....the AY 2005-06 and 2006-07; therefore, the Assessing Officer cannot disturb the same in the year under consideration without analysing the facts and particularly the details of purchase and sale of share transactions by comparing the earlier Assessment Years with the Assessment Year under consideration. Even before us, it has not been brought out that the facts are identical in the earlier years as well as in the year under consideration. Once the distinguishing fact has been brought to our notice regarding the holding period in the case of about 50% of the transaction is within 7 days and there are repetitive transactions in the same scrips as well as the assessee has also carried out speculative transactions; then the issue of nature of transaction whether trading or investment has to be decided on the basis of peculiar facts of particular case. In order to determine the nature of transaction, no single factor can be said to be a decisive and the issues can be adjudicated only by taking into account all relevant facts, factors, criteria and principles, which are relevant and decisive and can be applied as guidelines. Thus, there is no single or strict jacket formula to decide the....
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.... the Assessing Officer accepted the assessee as an investor in shares, the finding of the authorities below and the Hon'ble High Court was upheld by the Hon'ble Supreme Court and held that the profits were correctly computed in the year under consideration. 5.6 Following the decision of the Hon'ble Supreme, we are of the view that the acceptance of the claim for the earlier year would not operate resjudicata or estoppel on the Assessing Officer for deciding the issue for the year under consideration when the facts are not strictly identical. Accordingly, we set aside the impugned order of the CIT(A) and restore the order of the Assessing Officer wherein the income arising from sale of shares has been rightly assessed as business income. 6. For the AY 2008-09, the assessee in ITA No. 5711/Mum/2011 has raised the following grounds: (i) Under the facts and the circumstances of the case of your appellant, the Assessing Officer has erred in treating ST gain of Rs. 25,88,046/- earned from share transactions held less than 30 days as business income which confirmed by the Commissioner of Income Tax(Appeals). (ii) Your appellant, therefore, prays that ....