TaxTMI 
TaxTMI 
2016 (7) TMI 451
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..../12/2009, determining his income of the assessee at Rs. 11. 82 Crores. Later on, a notice u/s. 148 of the Act was issued to the assessee. The AO finalised the assessment u/s. 143 (3) r. w. s. 147 of the Act on 28/03/2013 determining the income of the assessee at Rs. 11. 55 Crores. 2. Effective ground of appeal is about treating the income from sale of shares is income from Short-Term Capital Gains (STCG) of Rs. 2. 99 Crores and Long-Term Capital Gains (LTCG) of Rs. 87, 471/- as against the business income assessed by the AO. On verification of the records, after the completion of scrutiny assessment, he found that the assessee had indulged in largescale transaction in shares. He held that the intention of the assessee was to make profit ....
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....the permission from the superior authority was not taken as per the requirement of section 151 (1) of the Act. However, the FAA referring to various case laws held that the AO had duly recorded the reasons which had a live link with the facts of the case, that at the stage of initiation of reassessment proceedings it was not obligetory for him to conclude with evidence as to how much of income had escaped assessment, that it was not a case of change of opinion. Finally upheld the reopening. 4. Before the FAA, the assessee further argued that income from investment held under Portfolio Management Scheme (PMS) was liable to be taxed as income from capital gains, that the assessee had invested under the PMS for the purpose of maximisation o....
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.... view of growth prospects and not with intention of making profits. Relying upon above-mentioned two orders of the tribunal, the FAA held that the AO was not justified and taxing the gains arising out of sale of shares under the head business income. 5. During the course of hearing before us, the Departmental Representative (DR) supported the order of the AO and stated that assessee had entered into large number of share transactions, that his intention was to earn maximum profit, that the AO had rightly treated him a Trader who had invested money to carry out a systematic business activity. As stated earlier, none appeared on behalf of the assessee. 6. We have values the material available on record. We find the AO had reopened the s....
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.... of fact and it has to be determined with regard to the entirety of the circumstances. In our consideration view, in circumstance, in which the assessee is engaged in a systematic activities of holding portfolio through a PMS Manager, it cannot, by any stretch of imagination, be said that the main object of holding the portfolio is to make profit by sale of shares during the course of maintaining the portfolio investment over the period. As regards the high number of transactions, which have been referred to by the Assessing Officer, we have noted, on a perusal of statement filed before us, that the number of transaction reflected in the statement do not constitute independent transaction inasmuch as when, in a computer based trading system....