2016 (5) TMI 1081

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....ssee at Rs. 94, 46, 170/-. 2.Effective ground of appeal is about treating the short term capital gain on sale of shares, amounting to Rs. 94.46 Lacs, as business income. During the assessment proceedings the AO found that assessee was engaged in the activity of purchase and sale of shares, that he had earned most of its income by way of investment in shares which were taken on loan from various parties, IPO funding and investment in mutual funds, that most of the share transactions were either squared up in a very short duration of time. Considering the facts of the case, the AO held that transactions undertaken by the assessee were not in the nature of investment, that he had earned short term capital gain through his business activities......

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....order of the AO. 4. During the course of hearing before us, the authorised representative(AR)stated that investment through IPOs showed that intention of the assessee was to make investment, that utilisation of borrowed funds was no bar to make investment in a capital assets, that frequency of share transactions was very low, that the average period of holding was approximately 40 days, the assessee was an investor in shares since the past many years and had been assessed as such.He further stated that the identical issue had been decided by the tribunal while adjudicating the appeal of the brother of the assessee namely Dhruv H Patel (ITA/7857/MUM/2010, dated 05/12/2014).The departmental representative (DR) supported the order of the FA....

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....ting Pvt. Ltd. The application amount was for 35 lakhs shares amountinto Rs. 8.75 lakhs. The assessee was allotted 12971 shares on 17.9.2005 and the shares were sold on 22.9.2005 and 23.9.2005 at the average rate of Rs. 228/- as against the purchase price of Rs. 50/- per share. The AO proceeded by considering the CBDT circular qua Instruction No. 1827 dt. 31.8.1989 and instruction dt. 16.5.2006 and treated the share transaction of the assessee as business income. 4. The assessee carried the matter before the Ld. CIT(A) but without any success. 5. Before us, the Ld. Counsel for the assessee claimed that the assessee was an investor and during the year under consideration he has applied for the shares of FCS Softwares Soluti....