TaxTMI 
TaxTMI 
2016 (10) TMI 422
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.... same group of assessees and were heard together, we are disposing them off by this common order for the sake of convenience and brevity. 2. Both the assessees have raised similar solitary ground of appeal in both the appeals. At the outset, we may mention that both the parties agreed that the facts and circumstances of both the appeals are same and similar. We first take up ITA No. 5362/Del/2012 pertaining to Shri Kamal Shiv Kumar, the husband. Shri Kamal Shiv Kumar [ITA No. 5362/Del/2012] 3. The ld. AR submitted that the CIT(A) has grossly erred in law and on facts in upholding the order of the AO who has wrongly treated the short term capital gains amounting to Rs. 26,63,803/- as business income by completely ignoring the facts and d....
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....] 367 ITR 1[Delhi], the Hon'ble High Court held that business is of adventure in the nature of trade, purchase and shares with own funds and investment of shares under portfolio management agreement is not disclosing intention to make profit and if shares are held for long time, then profit from sale of shares is not assessable as business income and the same should be termed as either long term capital gain or short term capital gain. Therefore, the ld. AR prayed that the conclusion of the authorities below may kindly be dismissed and the AO may be directed to treat the income as 'short term capital gain' instead of 'business income'. 6. Replying to the above, the ld. DR drew our attention towards para 2.2 of the impugned order and su....
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.... of the above rival submissions, at the very outset, we may point out that as per the above mention circular dated 6/2016 of CBDT, the assessee has an option to opt whether the listed shares/securities are stock in trade or investments, irrespective of the period of holding of shares/securities. As per para 3 of this Circular, it is prerogative of the assessee to treat the listed shares and securities as stock in trade as investment and if the assessee is treating the same as stock in trade, then the income arising from transfer from such shares/securities has to be treated as long term or short term capital gains. In the present case, admittedly, and undisputedly, the assessee is a non-resident Indian working as I.T. consultant in USA. The....
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....property or security acquired or taken on behalf of the client". While the agreement entered into between Radial and Reliance appears to be a discretionary portfolio, as indicated in clause 9 (by which client "unconditionally and irrevocably" grants power of attorney to the portfolio manager to make decisions on the investments), clause 10 states that the portfolio manager provides no warranty as to the appreciation of the securities in which he applies the client's funds. Therefore, it is clear that a PMS agreement can be an instrument by complete authority and discretion over the transactions to be entered into, is surrendered to the portfolio manager by the investor. 9. From the terms of the agreement it does not emerge that th....
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....the three reasons provided by the ITAT merely convey that intention to hold shares as investment cannot be inferred from the agreement. However, the fact that no inference of an intention to invest can be made from the agreement does not translate to the intention to trade in shares for profit either. As was noted in Raja Bahadur Kamakhya Narain Singh v. CIT-Bihar, (1969)3SCC791 = (1970) 77 ITR 253 (SC) : "The surplus realised on the sale of shares, for instance, would be capital if the assessee is an ordinary investor realising his holding; but it would be revenue, if he deals with them as an adventure in the nature of trade. The fact that the original purchase was made with the intention to resell if an enhanced price could be obtained is....
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....portfolio investment banker and no investment has been made directly by the assessee in the nature of business adventure in the nature of trade. We may also point out that as per the ratio of the decision of the Hon'ble High Court of Delhi in the case of Radials International [supra] the intention of the assessee must be inferred holistically from the conduct of the assessee, circumstances of the transactions and not just from seeming motive at the time of depositing money. Their Lordships held that intention of the assessee, other crucial factors like the substantial nature of the transactions, frequency, volume etc. must be taken into account to evaluate whether the transactions are adventure in the nature of trade. Lastly, their Lord....