TaxTMI 
TaxTMI 
2016 (8) TMI 1034
X X X X Extracts X X X X
X X X X Extracts X X X X
....itting the total income of Rs. 38,85,856. The return was processed u/s 143(1). Later the case was selected for scrutiny through CASS. 2.1 The AO noted that the assessee has shown an amount of Rs. 37,06,522/- as short term capital gains on sale of shares and an amount of Rs. 4,34,090 as short term loss on sale of derivatives. After setting off the said loss, the assessee has shown an amount of Rs. 32,32,432/- as short term capital gain and offered the tax @ 10% as per the provisions of section 111A of the IT Act, 1961. 2.2 On examination, the AO noticed that the assessee is purchasing and selling the shares on regular basis. In few cases there were cases wherein the shares were purchased and sold on the same day. In few cases the share....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tention of the assessee is to make profit by sale of shares and he had no intention to hold the shares for a long period to earn dividends. He, therefore, treated the claim of short term capital gains of Rs. 32,72,432/- u/s 111A was rejected and the same was treated as business income of assessee. 3. Aggrieved, the assessee carried the matter in appeal before the CIT(A). 4. Before the CIT(A), the assessee submitted as under: a) That the appellant is a salaried employee, the shares were purchased for the purpose of investment for earning profit. b) That the appellant was not involved in the business of buying and selling of shares. c) That the assessing authority has taken few transactions where purchases and sales were made o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ency of transactions, volume of business clearly indicate that the assessee carried on trading activity. He, therefore, confirming the action of the AO in treating the income of the assessee as business income. 6. Aggrieved, the assessee is in appeal before us: 1. The Order of the Learned Commissioner of Income Tax (Appeals) -II, Hyderabad, is erroneous on facts and in law. 2. The Assessing officer as well as Commissioner of Income Tax (Appeals) -II, Hyderabad, erred in holding that the income of Short Term Capital Gains is 'Business Income' on the ground that the appellant did not invest in shares but carried on trading activity on regular basis. 3. The Learned Commissioner of Income Tax (Appeals) erred in treating the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... subsequent years 2009-10 and 2010-11 the returns of income showing the profit as income from 'short term capital gains' from the purchase and sale of shares were accepted by the department. He, therefore, contended that how could the department take inconsistent stand for the asst year 2008-09 (under consideration) contrary to the considered view both for the preceding as well as the subsequent years. Since the intention of the assessee mainly was to purchase shares for holding them as 'investment' only the gains arising from the sale of shares is assessable under the head 'short term capital gains' and not under the head 'income from business'. 8. The ld. DR, on the other hand, relied on the orders of re....