2014 (1) TMI 869

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....siness income of the Appellant. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in upholding the order of the Assessing Officer in taxing the long term capital gains declared by the Appellant, amounting to Rs.62,70,697/-, as the business income of the Appellant. 3. In any event, without prejudice, on the facts and in the circumstances of the case,the Ld. CIT(A) was not justified in upholding the order of the Assessing Officer in merely taxing the gain on sale of shares during the year as business income without making any adjustments towards the opening and closing stocks of those very same shares of the Appellant as well for other expenses which could pertain to calculation of Income from busine....

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....od of various scrips,treatment in earlier years,motive of the assessee-it could be held that assessee was not an investor, that she was dealing in share transactions with motive to earn profit in a short time span as a trader.He held that assessee was dealing in share transactions through 5 brokers, that number of shares purchased was as high as 2.5 Crores shares, that frequency of transaction was as high as two to three per day on an average.Referring to the circular issued by the Central Board of Direct Taxes (CBDT)dtd. 05.06.2007(circular No.4/2007)he held that LTCG and STCG had to be treated as business income of the assessee for the year under consideration. 2.1. Assessee preferred an appeal before the First Appellate Authority (FAA....

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..... Before us, Authorised Representative(AR) submitted that assessee had not borrowed funds for purchasing shares, shares, that purchases were out of her own funds, that all scrips purchased / sold had been on the basis of actual delivery,that she had never re-purchase scrip it had been sold by her, that the scrips had been shown as investments in the books of accounts, that for the earlier Assessment Years (AY 2005-06 & 2006-07) as well as for the subsequent two assessment years (2009-10 and 2010-11) scrutiny assessment were passed u/s 143(3) of the Act, that in all these years,AO had accepted the stand of the assessee that similar transactions in scrips in these respective years were to be assessed under the head 'Capital Gains' and not as ....

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.... activity or not in a particular year has to be decided on the facts of that assessment year, though the earlier and subsequent years'proceedings have to be taken into consideration. In spite of that,facts of that particular year are very important to decide the taxability of assessee. Circular issued by the CBDT and various cases decided by the Tribunal/ Hon'ble High Courts/Supreme Court have laid down the guidelines in this regard. Parameters indicated by judicial forum are the guidelines to be applied on facts of a case. AO as well as FAA has mentioned these parameters in their orders Basic issue to be decided by us is the intention of the assessee in carrying out the activities of buying and selling of shares. If the conduction of the a....