TaxTMI 
TaxTMI 
2015 (7) TMI 444
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....s of the case are that the assessee, at the material time, was engaged in the business of trading of shares. Apart from that, it also kept itself engaged in 'Investment' in shares. During the year in question, the assessee earned, inter alia, a profit of Rs. 16,41,33,017/- from the sale of shares of Satyam Computers Ltd., which was declared as 'Short-term Capital gain'. The AO observed that the assessee purchased 70,44,801 shares of Satyam Computers during the period 9.4.2009 to 3.6.2009 and such shares were sold in entirety during the period June,2009 to January, 2010 for a consideration of Rs. 51.18 crore, realizing a profit of Rs. 16.41 crore, on which security transaction tax (STT) was paid to the tune of Rs. 6,39,749/-.....
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....ssions advanced on behalf of the assessee. He observed that in March, 2009 itself, the SEBI had given its nod for the bidding process to select an investor through open auction and on 13.4.2009, Tech Mahindra won the bid for acquiring 51% stake in Satyam Computers @ Rs. 58 per share and, hence, made an open offer to all Satyam shareholders at this rate. He, therefore, held that the object of the assessee was not to stay invested in these shares and earn dividend, but, to realize immediate profit on increase in the price of such shares. Considering this and other reasons, the AO treated the profit of Rs. 16.41 crore from sale of shares of Satyam Computers Ltd., as 'Business income.' The ld. CIT(A) got convinced with the assessee'....
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.... be indicative of the assessee's intention to reap the immediate profit on their sale. The argument of the ld. DR that the assessee entered into such shares at a time when they were at the lowest price and hence there could be no possibility of making Investment, cannot be considered as decisive for holding such shares as stock-in-trade. A person may think of making investment in the shares of a company at a price which is quite low and, then, maintain position in it for a period by allowing it to prosper. There is no rule of purchasing shares as investment only when the price of shares of a company is at the peak. 6. There is Annexure to the assessment order which divulges the dates of purchase of these shares starting from 9th April ....
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....ld them as Investment. 10. Another factor which needs to be mentioned is that the assessee was consistently holding some other shares as investment over a period of time and was regularly earning income from their sale by declaring profit as 'Short-term capital gain' or 'Long-term capital gain' depending upon the period of their holding. There is no doubt that shares of Satyam Computers were not purchased or treated as Investment in any of the earlier years, but at least this factor shows that the assessee was also engaged in the purchase of shares as Investment and showing profit from their sale under the head 'Capital gains'. This treatment of profit from sale of shares held as investment has not been disputed by ....