2013 (8) TMI 174

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....hares and securities as capital gain/loss as against business income treated by the A.O.?" 3. Briefly stated, the assessee, a private limited company engaged in the business of finance services, car hire, administrative services and trading had, during the year under consideration, disclosed following income and loss on account of purchase and sale of shares, securities and units of mutual funds:- Long Term Capital Gain on sale of shares and mutual funds Rs.753847/- Short Term Capital Gain in PMS accounts in mutual funds Rs.630661/- Short Term Capital Loss in PMS account and shares (-) Rs.943093/- The assessee had claimed the LTCG of Rs.7,53,847/- as exempt u/s 10(38) whereas the Net Short Term Capital Loss of Rs.3,12,432/- (....

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.... investor and not trader in shares for the following reasons:- The fact that the expenses are claimed cannot lead to the conclusion that the purchase and sale of shares was by way of trading activity and not investment, as even in the latter case, the expenses listed above will be incurred and claimed by the Company, many of them relating to the trading in books, administrative services, hire of car and other sources of income. Even in the case of investor, these items will appear in the Profit & Loss Account without leading to the conclusion drawn by the A.O. The absolute figures of sales and purchases cited by the A.O. cannot lead to a conclusion that the Appellant is trading in shares, as the volume of figures of purchases and sales d....

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....derations far from reality. There is no question of entering the market directly when investments are made through Brokers or Portfolio Managers. The frequent indulgence in trading of shares is not borne out by the transactions of the Appellant. In view of the above facts and circumstances, I direct the A.O. to accept the Long Term Capital Gain of Rs.7,53,847/- and Short Term Capital Gain of Rs.6,30,661-/ as shown by the appellant and allow setting off the loss under the head Short Term Capital gain of Rs.9,43,093/-. These grounds of appeal are allowed." Aggrieved by the impugned order, the Revenue is in appeal before us. 4. Before us, the Ld.DR has stated that the order of the Ld.CIT(A) is not focused on the relevant issue and of ....