TaxTMI 
TaxTMI 
2016 (4) TMI 115
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....f appeal in this appeal are mutually exclusive and without prejudice to each other. 1. The Learned Commissioner of Income Tax (Appeals) erred in fact and in law in confirming the action of the Assessing Officer in treating the gains of Rs. 8,54,452/- on sale of shares/securities as business income instead of capital gains as claimed by the Appellant. 2. The learned Commissioner of Income Tax (Appeals) erred in fact and in law in confirming the action of the Assessing Officer in initiating penalty proceedings u/s.271(1)(c) and 271-B of the Act. 3. Your appellant craves the right to add to or alter, amend, substitute, delete or modify all or any of the above ground of appeal. 2. Briefly stated facts are that the ....
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.... to the contrary to the settled principles of law and did not consider the submissions as made by the assessee in right perspective. Under these facts, the addition so made deserves to be deleted. 3.1. On the contrary, ld.Sr.DR Shri Dinesh Singh vehemently opposed the submissions of the ld.counsel for the assessee and supported the orders of the authorities below. He submitted that the ld.CIT(A) has given a finding on fact which is not controverted by the assessee that in the balance-sheet no investment was reflected except for Rs. 500/- being shares of a co-operative society. He submitted that volume of the transactions, the regularity of the transaction and the fact that the income from all other sources including salary was much less ....
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....lassical example of dispute related to sale of shares to be treated as business income or investment. The revenue authorities have treated surplus arising out of sale of shares as business income contrary to the claim of the assessee as capital gain. To determine whether surplus arising out of sale of shares is business income or capital gain, necessarily would depend upon fact of each case. No straight jacket formula is prescribed under the provisions of the Act by which it can be deduced that a particular activity is a business activity or investment activity except certain guiding factors are available in the form of judicial pronouncements and the Circular issued by CBDT. The undisputed facts in the present case are that the assessee ha....
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.... case may be decided on the basis of ratio of decision in the case of Sugamchand C.Shah (2010 TIOL 336) ITAT (Ahd) wherein it has been held that shares held for less than 30 days should be treated as business transaction and shares held for 30 or more days be considered on account of investment. 2.3. The submissions of the appellant has been considered with reference to the facts on record. It has been contended by the appellant that it is doing share transactions separately on account of proprietary concern and on individual account. It is however, not explained as to what is the difference between doing business in proprietary concern and individual name. Apparently this distinction is a superficial distinction. The appellant is ....
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....al as to for what period shares are held in each portfolio. For instance if the shares sold within five days from investment portfolio it would not become a trading income. Converse will also be true. And for removal of any doubt it has to be emphasized that the two portfolios in the case of appellant is not in the shape of proprietary concern and on account of individual as already discussed earlier but the two portfolios are as recorded in the books as investment and otherwise. Looking into the totality of fact as noted above, I do not find any reason to differ with the finding of the Assessing Officer on this issue. This ground is rejected." 4.1. The ld.counsel for the assessee has relied upon the decision of Coordinate Bench (ITAT "A....
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....tfolio cannot be transferred into trading portfolio. We find merit into this contention of ld.CIT(A) that the shares pertaining to business portfolio cannot be transferred to investment portfolio. As per assessee, he has been investing in shares in individual capacity and treating the same as investments. Undisputedly, there is always a very fine distinction between transaction effected as business and investment and would depend upon facts of each case. The taxpayer cannot be allowed to take advantage of holding two portfolio, primarily with a motive to avoid tax liability or to reduce tax incidence. In the instant case, eventhough the assessee is maintaining two distinct portfolios, but facts speak otherwise. The volume of transaction is ....