TaxTMI 
TaxTMI 
2015 (10) TMI 2183
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....eturn was assessed u/s.143(3) of the Act at Rs. 46,48,050/- out of which income from share trading amounting to Rs. 41,95,223/-was assessed as short term capital gain at special rate of Rs. 10%. On perusal of the return and assessment records, the following facts come to light : • During the previous year relevant to A.Y. 2007-08 the assessee has carried out several purchase/ sale transactions of shares, mutual funds etc. throughout the year and volume involved was also substantial. Further, as per the statement of shares sold, the time gap between the purchase and sales was in days except in few cases. • In case of income from sale of shares, mutual funds etc., the taxability of income as to whether the same is to be assessed as income from 'capital gain' or as 'income from business' depends on the volume and frequency of transactions. When there are huge number of transactions, the income has to be treated as 'income from business' and taxed accordingly. CBDT has also issued a guideline in this regard vide Circular No.4 of 2007 dt.16.06.2007 providing the circumstances where the share trading income has to be regarded as busine....
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....t with aforesaid two share brokers, which was called for vide notice u/s.142(1) of the Act dated 29.12.2008 as per point No.16. 5. Moreover, it is also seen that the transactions mentioned in the Journal are not found to be recorded in the only share trading account provided by you, that is with ICICI direct.com. For example, there are share transactions as per voucher No.96 of your Journal dated 31.03.2007, but the same are not found recorded in the only share trading account furnished by you. All the above facts clearly show that you failed in producing the full and correct facts, details during the assessment proceedings in respect of your share transactions, though the same were specifically called for during the assessment proceedings." 5. Significantly, however, the Assessing Officer did not deal with the petitioner's contention that as per DTAA between India and Kenya, the petitioner's business income cannot be taxed in India. Be that as it may, the petitioner at that stage filed present petition and challenged the very notice issued by the Assessing Officer for reopening the assessment. 6. Drawing our attention to the documents on record and the reasons rec....
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....would be sufficient to convince us that reopening beyond the period of four years from the end of relevant assessment year would not be permissible since from such reasons it cannot be gathered that there was any failure on the part of the assessee to disclose fully and truly all material facts. The Assessing Officer, however, has made an effort to demonstrate that certain material facts were not disclosed during the course of the assessment. It is his case that when the assessee was asked to supply certain details pertaining to the purchase and sale of shares, he supplied incorrect or incomplete details. We are conscious that duty of true and full disclosure would not only be confined to the return filed, but would continue even during the course of the assessment. If, therefore, in response to a pertinent query by the Assessing Officer, the assessee did not make true and full disclosure which resulted into the income chargeable to tax escaping assessment, reopening beyond the period of four years may still be permissible. 10. However, no such grounds are mentioned in the reasons recorded by the Assessing Officer. It is held by various Courts, including the Supreme Court time a....
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.... income/loss arising there from is to be computed under the head 'Capital Gains'. 4. Provide latest circulars which speak that even after such roaring turnover of more than 8.4678 crores and alike there is no obligation on the part of the assessee to get his/her books of accounts audited. - Provision of section 44AB does not apply to the assessee as he does not have any business income. - xxx xxx xxx 6. On the facts and circumstances of the case please explain all of your transactions with the help of bank a/c and DEMAT a/c. 2-69 xxx xxx xxx The copy of demat account and bank account is attached herewith. xxx xxx xxx 8. Produce comparative chart in tabular form of net profit, total turnover, direct and indirect expenditure of last 4 assessment years of the incomes as per return of income so filed. - Assessee does not have any business income in India. It earns income from purchase and sale of shares held as investment in India. xxx xxx xxx 10. Produce books of accounts of th....