TaxTMI 
TaxTMI 
2016 (8) TMI 999
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....n 31-10-2006 declaring total income of Rs. 4,54,81,780/-. Thereafter, the assessee filed revised return of income on 28-03-2008 declaring total income of Rs. 4,55,35,290/-. The case of the assessee was selected for scrutiny and accordingly notice u/s. 143(2) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") was issue to the assessee on 26-06-2007. In the return of income, the assessee had shown business income from trading of shares Rs. 2,94,00,958/-, profit from speculation in shares and commodity Rs. 24,69,343/- and Short Term Capital Gain arising out of purchase and sale of shares Rs. 1,37,45,845/-. Apart from the above, the assessee had declared income from remuneration Rs. 79,923/- and income from house property Rs. 50....
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.... 3. In appeal the assessee has assailed the findings of Commissioner of Income Tax (Appeals) on two grounds : i. Confirming the gain arising on sale of shares Rs. 1,37,45,845/- as business income instead of short term capital gain offered by the assessee. ii. Confirming the disallowance of interest to the extent of Rs. 3,78,499/-. 4. Shri Nikhil Pathak appearing on behalf of the assessee submitted that the assessee is having two separate portfolios for shares held as investment and stock in trade. The assessee has voluntarily disclosed substantial amount i.e. Rs. 2,94,00,958/- on account of trading in shares. The ld. AR referred to the balance sheet of the assessee at page 19 of the paper book to emphasize that the assessee has ....
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....essment year 2003-04 decided on 23-08-2011. 5. In respect of ground No. 2 relating to disallowance of interest expenditure, the ld. AR of the assessee stated at the Bar that he is not pressing the same. 6. Per contra, Mrs. Nishtha Tiwari representing the Department vehemently supported the order of Commissioner of Income Tax (Appeals) in rejecting the contentions of the assessee. The ld. DR submitted that the assessee has not maintained separate bank account and demat account for the alleged investment portfolio. The Commissioner of Income Tax (Appeals) in his order has annexed the list of transactions in respect of sale and purchase of shares claimed to have been made under investment portfolio. A perusal of the transactions would sh....
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....shares held as stock in trade and investment. In the present case, the assessee is engaged in trading of shares and has claimed to have held shares and securities for trading purpose, as well as investment. However, the assessee has failed to substantiate from records the existence of two separate portfolio for shares held as investment and stock in trade. The assessee has not maintained separate bank accounts for transacting the shares held as investment. The assessee has further not maintained separate demat account for the shares held as investment. The assessee has admitted the fact that the assessee is transacting shares held as investments as well as stock in trade through single demat account and all the transactions are done through....
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....e sale of shares. The Revenue treated the income from sale of shares as Business Income due to the volume, frequency, repetitiveness and utilization of borrowed funds for purchase of shares. In the said case the assessee was not engaged in the business of trading of shares and thus was not having two separate portfolios for shares held as stock in trade and shares held as investment. In fact there was specific plea on behalf of the assessee that the assessee is a retired person and has no infrastructure for doing business. In the backdrop of these facts, the Tribunal held that income from sale of shares where holding period of shares is less than 30 days should be treated as business income and the remaining amount should be treated as Long....
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....a) Where the assessee itself, irrespective of the period of holding the listed shares and securities, opts to treat them as stock-intrade, the income arising from transfer of such shares/securities would be treated as its business income, b) In respect of listed shares and securities held for a period of more than 12 months immediately preceding the date of its transfer, if the assessee desires to treat the income arising from the transfer thereof as Capital Gain, the same shall not be put to dispute by the Assessing Officer. However, this stand, once taken by the assessee in a particular Assessment Year, shall remain applicable in subsequent Assessment Years also and the taxpayers shall not be allowed to adopt a different/contrary....