AI Drafter 
TaxTMI 
TaxTMI 
2011 (5) TMI 1029
X X X X Extracts X X X X
X X X X Extracts X X X X
....d. CIT(A) has erred in law and facts in holding that the income generated by dealing in shares and securities by the assessee was to be treated as income from "Capital Gain" and not income from business as was assessed by the AO. 3. The appellant craves leave to add, alter or amend any/all of the grounds of the appeal before or during the course of the hearing of the appeal." 2. The assessee company is recognized by the Reserve Bank of India as non-banking financial corporation. The company is having an investment portfolio and has held certain shares in stock-in-trade. During the year under consideration vide resolution dated 22nd April, 2004 it was resolved that stock-in-trade amounting to Rs. 79,73,293.15/- held by the company in s....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... out the profits of the year ending as on 31.3.2004 and these findings are recorded by the conclusion drawn by CIT(A) in the impugned order in para 5. It is further observed by ld. CIT(A) that it is clear from the balance sheet for F.Y. 2003-04 that the market value of these shares as on 31.3.2004 has been taken into account by working out of the closing stock of the shares and this has been taken into account for working out the profits for that year. It has been further found by the ld. CIT(A) that the market value as on 31.3.2004 has been taken as the cost of acquisition of these shares and the difference between cost of acquisition and the sale price has been offered for taxation as income from short term capital gain. On these facts, l....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Associates are identical. The findings of fact recorded by ld. CIT(A) in the present case have not been controverted by the revenue. In this view of the position, the ratio laid down in the aforementioned decision will be applicable to the present case also. For the sake of completeness the relevant portion of the said order is reproduced below: - "2. The issue raised is that Ld. Commissioner of Income Tax (Appeals) erred in directing to treat the assessee as investor in shares as against treatment by the Assessing Officer of assessee as a trade. 3. The assessee in this case has declared income from long term /short term capital gains and income from business and profession. The Assessing Officer in this case observed that....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the facts of the case, the observations of the AO and the submissions made by the counsel of the appellant. The appellant company is recognized by the Reserve Bank of India as Non-Banking Financial Corporation. It is observed that the company is having an investment portfolio and also held certain shares as stock in trade. The matter was put before the Board to convert these shares from stock in trade into investments. The resolution was approved by the Board and later on the appellant has followed the same method of valuation at cost price on permanent basis. It is observed from the details submitted before the Assessing Officer that the shares held in stock in trade have been converted into investments w.e.f. 1st of April, 2004. The valu....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... portfolio into investments. the matte was put before the Board in the Annual General Meeting to convert the shares from stock in trade to investments. This resolution was approved by the Board and the market value as on 31st of March, 2004 was taken as the cost of acquisition of these shares were transferred to the investment portfolio. Later on the appellant had followed the same method of valuation at cost price on permanent basis. Part of theses shares were sold by the appellant during the year. The appellant had taken the closing value as on 31.3.2004 as the cost of acquisition and without taking the benefit of indexation, the difference between the sale price and the cost of acquisition has been offered for taxation as short term capi....