TaxTMI 
TaxTMI 
2014 (6) TMI 329
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....ment in shares of Rs. 49,56,947/- as "business income" instead of "Short term capital gain" as claimed by the appellant. 2. On the facts and circumstances of Appellant's case and in law, the CIT(A) erred in holding that the Appellant is a 'trader' in share and not "investor". 3. On the facts and circumstances of Appellant's case and in law, the CIT(A) erred in holding that expenses of Rs. 7,45,426/- are disallowable u/s. 14A r.w. Rule 8D." 3. The assessee is an individual deriving profit from share of profit and interest on capital from firms wherein assessee is one of the partners. The assessee is also deriving salary income and has also shown Short term capital gains & Long term capital gains and income from other sources. 4. ....
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....n 100 days. The shares were held as investment and accordingly shown as investment in the balance sheet. It was further explained that the assessee has not borrowed money to make investment in shares. The assessee has also earned Long term capital gain of Rs. 10.36 lakhs which has been accepted as such by the AO. Most of the shares sold during the year were brought forward from the earlier year and therefore the AO has grossly erred in treating the assessee as a trader. 5.1. After considering the facts and the submissions made by the assessee, the Ld. CIT(A) at para 2.3 on page-12 of his order held as under: "I have considered the submissions of the Ld. Counsel and this case it is seen that the appellant has consistently, systematical....
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....e authorities below and have perused the material evidences brought on record before us. The assessee is a partner in M/s. Kamdar & Co., M/s. Mahek Investments, K. Amishkumar & Co., and M/s. Hamsa Trading Co., from where he is deriving share of profit and interest on capital. The assessee is also deriving remuneration from K. Amishkumar Trading Pvt. Ltd. In addition to this, the assessee is also deriving rental income from M/s. Frankfinn Institute of Airhostess and K. Amishkumar Trading Pvt. Ltd. The allegation of the Revenue authorities that the assessee has indulged in repeated transaction of the same scrip is not supported by the facts on record as can be seen from the chart which is exhibited at page-2 & 3 of the assessment order. 8.....
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.... follows:- "....it was open to the assessee to contend that even on the assumption that it had become a dealer and was no longer an investor in shares the particular holdings which had been cleared and the sales of which had resulted in the profit in question had always been treated by it as an investment. It can hardly be disputed that there was no bar to a dealer investing in shares. But then the matter does not rest purely on the technical question of onus which undoubtedly is initially on the revenue to prove that a particular item of receipt is taxable. Whether a particular holding of shares is by way of investment or forms part of the stock-in trade is a matter which is within the knowledge of the assessee who holds the shares and ....
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....hether the shares are held for more than 12 months or less than 12 months. In the present case, the AO has accepted that the assessee is an investor in so far as the Long term capital gain is concerned. 8.4. Considering the volume and frequency of transactions and also the past assessment history of the assessee, we do not find any reason as to why the profit should not be taxed under the head Short term capital gain as returned by the assessee. We, therefore, set aside the findings of the Ld. CIT(A) and direct the AO to tax the profit arising from the sale of shares under the head 'Short term capital gain' as shown by the assessee. Ground No. 1 & 2 are accordingly allowed. 9. Ground No. 3 relates to the disallowance u/s. 14A r.w. Rul....