2013 (11) TMI 159

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....ompany and income under the head "Capital gains". During the year under consideration, the assessee earned short-term capital gains of Rs. 2,31,332 on sale of shares, which the Assessing Officer treated it as business income of the assessee. It was submitted before the Assessing Officer that the similar transactions carried out by the assessee in the earlier years were held to be taxable under the head "Capital gains". Reliance was placed on the decision of the Tribunal in the case of Shri Janak S. Rangwalla v. Asst. CIT, passed in I. T. A. No. 1163/Mum/2004. However, the Assessing Officer rejected these contentions of the assessee and held that the assessee had traded in shares and income of the assessee from purchase and sale of shares is....

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....f transactions is high, it may be strong indicator that the person is carrying out trading transactions. The legal principle enumerated by various courts including the hon'ble Supreme Court in the case of G. Venkataswami Naidu and Co. v. CIT [1959] 35 ITR 594 (SC), Ashok Kumar Jalan v. CIT [1991] 187 ITR 316 (Bom) and Arjun Kapur v. Deputy CIT [1999] 70 ITD 161 (Delhi), were taken into consideration by the Commissioner of Income-tax (Appeals). Thereafter, the Commissioner of Income-tax (Appeals) noted that in the present case, it was found that the assessee has applied in the shares of various companies and was allotted shares in 40 companies. These shares were immediately sold on allotment. Thus, the period of holding in most of the cases ....

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.... strongly placed reliance on the order of the learned Commissioner of Income-tax (Appeals). Attention of the Bench was drawn on details of purchase and shares, which has been placed in paper book at page 55 and it was stated that the difference between purchase and sale is more than 30 days and in many cases the difference is of only 3-4 days and the average difference is not more than 5-6 days, therefore, the business of the assessee to apply the shares in IPO and then he sold the shares immediately allotting the shares. Further reliance was placed on the decision of the Madras High Court in the case of CIT v. Allu Arvind Babu reported in [2013] 350 ITR 387 (Mad). I have heard the rival submissions and considered them carefully and afte....