TaxTMI 
TaxTMI 
2015 (6) TMI 198
X X X X Extracts X X X X
X X X X Extracts X X X X
....usiness income treated by the AO. without appreciating the fact that the assessee is dealing in large volume of shares, most of the shares are bought and sold within short period, while some are not sold due to market conditions and their holding with the assessee remains beyond few days, it will not change the nature of transactions and the assessee is very well engaged in the business of share trading, which denotes that the motive of the assessee is to carry on business in shares to book profit, rather than investment in shares. (ii) The appellant prays that the order of the Ld. CIT(A) on the above grounds be set aside and that of the AO. be restored. (iii) The appellant craves leave to amend or alter any ground or add ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....that the share were purchased for Rs. 3.80 Crores and were sold for Rs. 1.45 Crores resulting in profit of Rs. 35.92 Lakhs. He analysed the statement of STCG filed by the assessee and found that most of scripts were sold on the same day or were bought or sold within a period of 3 to 5 months, that he had bifurcated the share transactions into two categories i.e. first where shares were to be delivered to the assessee and the second where no delivery was required to be taken, that the assessee treated the income arising out of the first category as income from capital gains, that the income from second category was taken as business income or loss, that the assessee had earned dividend income of Rs. 93095 as against the income of Rs. 36.59 L....
X X X X Extracts X X X X
X X X X Extracts X X X X
....laimed as STCG was to be disallowed. 3.Aggrieved by the order of the AO, the assessee preferred an appeal before the First Appellate Authority (FAA).Before him, it was argued that assessee was a senior citizen aged 67 years, that the intention at the time of purchase of share was to hold same as investment, that shares were part of the investment as evident from the balance-sheet, that the assessee invested only into a select group of scripts and that too in select sectors which were like to outperform, the assessee did not any infrastructure to deal with the business or share trading. Regarding the LTCG was submitted that there was only one sale transaction during the year under consideration,that shares were purchased more than 10 year....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 4.Before us,the Departmental Representative(DR) stated that the assessee was engaged in the large scale trading of shares,that intention of the assessee could be gathered from the surroun -ding circumstances,that it had purchased shares worth more than Rs. 3 crores, that as compared to dividend received by the assessee the income from share trading business was manifolds,that AO had passed the detailed order and held that assessee was not an investor. Authorised Representative(AR) supported the order of the FAA. He relied on case of Gopal Purohit(336ITR287),delivered by the Hon'ble Bombay High Court. 5.We have heard the rival submissions and perused the material before us.The only issue to be decided by us is as to whether the profits ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion in deciding the question.In the matter of Sonia Uppal the Hon'ble P & H High Court has(367ITR70)held as under: "There is a no straitjacket formula for concluding whether a transaction would fall within the domain of profits derived from an adventure in the nature of trade or outside its ambit. The facts and circumstances of each case would be determinative of the character of the receipt. The primary consideration in such cases relates to examining the nature of the transaction. Where a person invests money in an asset with intention to hold it, enjoys its usufruct for some time and then sells it at an enhanced price, it would be a case of capital accretion outside the scope of profits resulting from an adventure in the nature....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd sale transaction of shares of that magnitude one has to devote considerable time and resources and has to carry out activities in a systematic manner.He has to keep watch of the movement of shares everyday and has to purchase and sell the same at appropriate time.All these characteristics undoubtedly lead to the conclusion that the person is doing business of shares, he is not an investor.Activities of the assessee clearly prove that the assessee wanted to maximise the profit and not interested in appreciation of value of the scripts.In our opinion, entries in the books of accounts is one of the deciding factors,but not the conclusive factor to decide as to whether the assessee was a trader or investor of shares covered under the head ST....