2011 (5) TMI 971

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....al gain of ₹ 2,49,955/- from sale of shares and units of mutual funds on which tax had been paid @ 10%. The AO noted that the assessee had made substantial transactions in purchase and sale of shares on frequent intervals. There were purchase and sale of shares of 74 companies and 10 mutual funds. Considering the frequency, volume and the ratio between purchase and sale the AO concluded that the assessee was trading in shares and units and accordingly treated income declared by the assessee as business income as the assessee gave no explanation despite specific query made by the AO. In appeal the assessee submitted that he was an investor in shares and units and the same had been shown as investment in the books of account. The assess....

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....377; 48,880/-. The investments which was sold at short term intervals were declared as short term capital gain. Some of the investment was sold after short holding to optimize earnings. The assessee had an organized activity in investments and was not a trader. Accordingly it was requested that claim of the assessee as investment should be accepted. The Learned DR on the other hand strongly supported the order of the CIT(A) and placed reliance on the findings given therein. 4. We have perused the records and considered the matter carefully. The dispute is regarding nature of income from purchase and sale of shares and units which had been shown as short term capital gain but have been treated by the AO as business income. In understanding ....