TaxTMI 
TaxTMI 
2015 (8) TMI 1312
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....he following grounds of appeal: i. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in holding that profit on sale of shares held for less than thirty days would constitute business income and the remaining such profit would constitute capital grains and thereby deciding that out of the profit of Rs. 6,35,42,874/- from share transactions treated by the AO as business income, lonely Rs. 2,17,10,019/- would be business income and the balance of Rs. 4,18,32,855/- would be capital gains. ii. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deciding that interest expenditure of Rs. 82,28,065/- is to be treated as incurred in connection with income from capital gains and intere....
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....s. 54,85,307/- out of the income of Rs. 38,72,78,020/- from transactions in shares and securities held by the AO as business income, only an amount of Rs. 19,30,207/- would comprise business income and the remaining Rs. 38,53,47,813/- would comprise capital gains. iv. On the facts and circumstances of the case, Ld. CIT(A) has erred in holding that the provisions of Explanation to Section 73 of the I.T. Act are not applicable to the case of the assessee and the income from transactions in shares and securities by the assessee is not to be held as income from speculative business. 4. The brief facts of the case are that the appellant is a private company duly incorporated under the provisions of Companies Act. The appellant is engaged i....
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.... capital gains as business income, the learned CIT(A) following the decision of ITAT, Ahmedabad Bench, in the case of Sh. Shugam Chand C. Shah Vs. ACIT, ITA No. 3554/Ahd/2008, dt. 29.01.2010, observed that the shares which were held for less than 30 days would be the income arisen from the sale of shares, shall be treated as a trading income and others as investments i.e. capital gains. In respect of the disallowance of interest, the CIT(A) directed the Assessing Officer to allocate proportionately the total interest expenditure between the trading portfolio and investment portfolio as per para 6 of his order. He further directed the Assessing Officer to allow statutory rebate under Section 88A of the Act in respect of the trading portfolio....
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....g portfolio comprising of stock-in-trade which are to be treated as trading assets. Where an assessee has to portfolios, the assessee may have income under both heads i.e. capital gains as well as business income." 8. From the above Circular, it is clear that that the assessee is entitled to maintain two portfolios i.e. investment portfolio and trading portfolio. The profit arising on account of investment portfolio ought to be treated under the head "capital gains" whereas the profit arising on account of sale of trading portfolio ought to be treated as "business profits". Whether particular scrip is held under investment portfolio or a trading portfolio is to be determined with reference to the intention of the parties as well as the c....