TaxTMI 
TaxTMI 
2015 (6) TMI 416
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.... appeals are common, arising out of identical set of facts, therefore, they are being disposed off by way of this consolidated order. 2. To understand the implication of the facts and the issues involved, we will first take up the appeal for the assessment year 2005-2006 (ITA No.2412/Mum/2009). In the grounds of appeal, the assessee has mainly challenged the taxing of income by the Revenue from transaction of shares as `business income' instead of `capital gain', shown by the assessee. 3. Brief facts are that the assessee is an individual, having income from house property, short term and long term capital gain and income from other sources. The assessee is Director in various companies, looking after the affairs of the business carri....
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....epting the assessee's stand that the transaction in shares undertaken by the assessee is an investment activity and the profit / gain from the shares have been assessed under the head `capital gain'. Lastly, the investments have been made out of own surplus funds and no borrowed funds were taken for the purpose of making the investment in shares. The AO rejected the assessee's contention and after detailed reasoning, held that the assessee is trader in shares, and therefore, the income claimed under the head `capital gains' is chargeable under the head `profits and gains of business or profession'. Accordingly, he treated the amount of capital gain of Rs. 2,02,35,932 as income from business. 4. Before the CIT(A), the assessee rebutted th....
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....cement of funds before the PMS does not make the person as investor; and (iv) the finding of the AO regarding volume, frequency and continuity of the transaction indicates that the assessee is a trader in shares. 4.1 Accordingly, he concluded that the AO is justified in treating the amount of Rs. 2,02,35,932 as business income. 5. Before us, the learned Counsel, Shri Madhur Agarwal, submitted that the main allegation of the AO that the transactions of shares are voluminous or numerous is not correct. The assessee has been holding the shares from last several years, which he has been selling from time to time. In support of his contention, he drew our attention to statement given at pages 38 to 43 of the paper book to point out that....
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....ripts have been broken into several transactions executed on consecutive days. The actual scrip-wise transactions would be less. Lastly, he submitted that in the earlier years, in the scrutiny assessments, the assessee's transactions in shares have been held to be assessable under the head `capital gains' and therefore, the principle of consistency should be followed. 6. On the other hand, the learned Departmental Representative, strongly relied upon the order of the CIT(A) and submitted that the assessee has been regularly purchasing and selling the shares, which fact have been noted by the AO in detail. If the volume of transactions are taken into consideration along with the other attendant facts as noted in detail by the AO as well a....
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....gain is minuscule if the same are sold within a short period. From the break up of summary of capital gain, it is seen that the assessee's investment in debt mutual funds is around 73% and also there is investment in venture funds. The investment in equity shares is approximately 27%. From this, it can be very well inferred that the assessee is mostly into long term investment activity. This is also coupled with other factors like, assessee has made investment solely from his own funds and not from any borrowed funds; he has managed his entire investment activity, through Fund managers / PMS. All these factors goes to show the intention of the assessee, which was to buy the shares for investment purpose and to sell the same to maximize the ....