TaxTMI 
TaxTMI 
2016 (10) TMI 162
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....tantive ground raised in the instant appeal challenges the CIT(A)'s order upholding Assessing Officer's action in treating the short term capital gains of Rs. 29,07,962/- as business income and also in further enhancing the same to the tune of Rs. 40,26,576/-. 3. We come to the relevant facts first. The assessee is a share trader. He filed return on 20.09.2008. The assessee had declared capital gain of Rs. 47,45,954/- arising from sale of shares during scrutiny. The Assessing Officer applied this tribunal's decision in case of Sugamchand C. Shah vs. ACIT to hold that the same profits arising from shares having holding period of less than a month would be treated as business income and more than that resulted in short term capital gains. ....
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.....19/101.24 2 Stock in Trade (Shares) 252.68 26.55 2.51 3 Loan 0.25 52.50 0.30 4 Income/Profits 8.57 30.76 10.61 5 Capital Gains both STCG & LTCG. 15.03 47.53 (-) 110.67 6 Sales figure Not provided Not provided Not provided From the Table above, it is very clear that the appellant has been substantially trading in shares and also investing in the Mutual Funds and shares. It is also clear that the investment in Shares was less than investment in Mutual Funds. Preceding to the current year (i.e.2006-07), the appellant had accumulated S-I-T of shares of 252.68 lakhs which was disposed of during the current year leaving only 26.55 lakhs as S-I-T, At the....
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.... in which the investment is to be made. He also bases his decisions on the market news. In case of a trading, the day to day position of the stock vis-a-vis the Sensex determine the purchase and sales of shares. The normal trend is that when the market is bullish go and sell and when the market is bearish go for buy. The trend of market is watched and decisions are taken accordingly. Most of the time the advice of the brokers play important role in selecting the pick of the scripts. In the instant case a large number of shares were bought and sold within 30 days of purchases made. In fact further large quantity of shares! bought and sold within less than a year of purchase. The transactions are so hectic that the appellant had also suffered....
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....n 30 days, the profits from the sale of such shares was treated by the him as Business income. His view was strengthen by the decision of the Hon'ble ITAT, Ahmedabad. (c) Purchase and sale of shares in short period indicates that the assessee purchased the shares with a motive to earn profit in short period; (d) The assessee undertook transactions without delivery in a few select scrip; (e) The assessee borrowed funds to purchase shares; (f) The dividend received was meager; (g) Though in the preceding years, the assessee consistently declared the gain/profit on the sale of the shares as 'Capital Gains' and the same has been accepted by the A.O. but ratio of consistency cannot be appl....
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....le ITAT, Mumbai was that whether the AO/CIT(A) erred in treating the LTCG & STCG as business income? The appeal was for two years and two CIT(A) have taken divergent views for two years. The Department had not contested the decision of the CIT(A) taken against the Revenue for one year. Factually, the Hon'ble ITAT also recorded that the share holding periods varied from 533 days to 3981 days. Also in some cases, the holding period varied from 387 days to 9016 days as noted in para 16 of the Order. After analyzing the parameters, the ITAT, held in favour of the appellant. This case is completely distinguishable with the instant case. Because, here we are dealing with the shares which are held for at best 192 days only. The AO had not dist....