TaxTMI 
TaxTMI 
2016 (8) TMI 765
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.... the revenue by reversing the order of the Commissioner (Appeals) and confirming the order of the Assessing Officer. 2. While admitting the appeal, this court has framed the following substantial question of law: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that all the shares sold by the assessee were held by him on business account and not on investment account?" 3. The facts of the case are that the assessee filed his return of income on 31.1.1992 disclosing total income of Rs. 1,30,686/-. The return was processed and total income of the assessee was assessed at Rs. 1,73,920/-. The Assessing Officer while making assessment has concluded that the assessee's transactio....
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....95 (SC) wherein paragraph No. 31 it was observed as under: "It appears from the record that in several assessment years, the Revenue accepted the order of the Tribunal in favour of the assessee and did not pursue the matter any further but in respect of some assessment years the matter was taken up in appeal before the Bombay High Court but without any success. That being so, the Revenue cannot be allowed to flip-flop on the issue and it ought let the matter rest rather than spend the taxpayers' money in pursuing litigation for the sake of it." 5. The learned counsel for the revenue Mr. Desai contended that the assessee indulged in share badla transactions and that the book value and market value of shares were rising. The asses....
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....transactions of purchases. Sales started from the very second month of the accounting year and lasted till the last day of the accounting year involving 37 transactions. Practically, all the shares that were purchased were sold within a short time except in case of Kesoram Industries where 10800 shares were sold out of 13190 shares purchased, and in case of TISCO, 8450 shares were sold out of 8600 shares. Rest all the shares were sold, the sales consideration for which amounted to Rs. 6,52,925/- and which resulted into a net gain of Rs. 1,48,601/- for the assessee. Only in one case (Grasim Industries), the holding was for 10 months, and in three cases the holding lasted for 6 to 7 months. In the remaining cases, the holding has not exceeded....
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.... the written submissions before the lower authorities, and it was argued before us also that assessee cannot be treated as a dealer in shares because he has neither converted his investments into stock-in-trade, nor is there such a finding by the AO. The argument is quite specious. If that was the case, then where was the need to enter into so much of exercise to gather the intention. If that was the case, then there would not have been a plethora of judgements that are before us. It was then argued that even legislature realized the need to prop up the capital market and hence reduced the holding period to a minimum of twelve months to regard it as a long term capital asset. This argument may have some force so far as those shares are conc....
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....dend income for tax. This argument would have been acceptable, had the conduct of the assessee been different than what we found in entering into the transactions. Even where the assessee deals in shares, it is not that there cannot be any dividend income. Dividend can arise on those shares which are held since 1988-89 or even earlier but are disposed off during the year. Even in case of short holdings, say, ranging from 6 to 10 months, dividend can be earned if the shares are transferred in the name of the assessee. At any rate, when the overall conduct of the assessee is that of a dealer in shares, showing dividend income in the total income has no relevance." 6. In view of above, learned counsel for the revenue has contended that the ....