2012 (4) TMI 637

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.... there were two cross- appeals before Tribunal. 2. In the return of income, the assessee had declared long term capital gains of Rs. 27,38,938/- on sale of four shares, which were held for more than two years. The Assessing Officer treated the gain on the sale of the said shares as income from business. 3. We have examined the order passed by the Assessing Officer. It does not give or state any valid reason or ground why the shares in question should be held to be a trading asset and not an investment. The period of holding was substantial and this aspect was ignored by the Assessing Officer. The CIT(Appeals) reversed the finding of the Assessing Officer and this finding has been affirmed by the Tribunal. In view of the factual positi....

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....and has not done any business in shares, which is evident from the number of transaction during the year and period of holding of shares. All the shares were deposited in D-mat account of the assessee company." xxx "The company has sold only 12 shares on which short term capital gains were claimed, out of that 5 shares were purchased during last financial year 2004-05 and the average period of holding of shares was 4 months. The short term transactions mainly represent either a wrong decision of buying undesirable shares or mistake through wrong information. We have already filed the statement of capital gains with dates of transactions. We have also filed the copy of contract notes and bills in support of the tra....

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....f securities in the books of account and balance sheet as stock in trade or investment. The assessing Officer may be cautioned that no single criteria listed above is decisive and total effect of all these parameters should be considered to determine the nature of activity." 10. The Assessing Officer observed that the transactions were regularly entered into and the sale and purchase was not occasional but continuous; the assessee did not maintain separate books of accounts for investments and regular business; and lastly the assessee had taken into account the diminution in value of investments in the books of accounts in the assessment years 2004-05 to 2006-07. 11. We have already extracted the reply given by the assessee a....