TaxTMI 
TaxTMI 
2016 (10) TMI 892
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....g shared by consistently treating them as "investment" in books of account. iii. In the earlier assessments department assessed treating income from investment in Shares under the head Capital Gains and no fresh facts came to light on investigation. 1.c. erred to conclude appellant's intention based on the frequency, volume, period of holding of script as transacted by appellant. The Appellant craves, to consider each of the above grounds of appeal without prejudice to each other and craves leave to add, alter, delete or modify all or any of the above grounds of appeal." 2. The brief facts of the case are that assessee filed her return of income for the A.Y. 2010-11 on 15.10.2010 declaring total income of Rs. 47,48,944/-. The assessment was completed u/s 143(3) of the Act on 12.03.2013 determining total income at Rs. 57,24,414/-. While completing the assessment, various disallowances such as disallowance u/s 14A of the Act amounting to Rs. 84,648/-, disallowances of income from short term capital gain as business income amounting to Rs. 32,82,775/- , disallowance of depreciation on motor car amounting to Rs. 8,03,523/-, disallowance u/s 94(7) of Rs. 40,500/- as well....
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....r the year under consideration has been shown. On this page it was pointed out that the assessee has categorically shown short term capital gains on sale of shares. Our attention was further drawn at page no.5 of paper book which is Balance Sheet as on 31st March, 2010 wherein also the amount invested in shares had been shown under the head "investments". Ld. AR further drawn our attention to page no.29 to 35 of the paper book which contains details of short term capital gains and the details regarding date, quantity, amount of purchase and sale of shares. Ld. AR also drawn our attention at page no.7 which shows Profit and Loss A/c for the year ended 31st March 2010. Ld. AR further submitted that had the investment made in the shares was for business purpose then there ought to have been the relevant accounts showing opening stock and closing stock of shares but nothing of that sought is contain in the documents therefore by no stretch of imagination the revenue authorities could have treated income from short term capital gain (STCG) as business and there was no new material from which it can be gathered that the assessee is 'trader' and not an 'investor'. 6. On the other hand,....
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....by Hon'ble Supreme Court as well as other citation relied upon by both the parties. Similar issue on almost identical facts was also decided by coordinate bench of ITAT 'D' Bench in the case of Shri Rajesh C Shah ITA NO. 4135/Mum/2012 for AY 2008- 09 wherein the assessee in that case had carried out 59 number of transaction during the year in 29 scrips and the operative para is as under: "8. In the case in hand, the total number of transaction carried out by the assessee are 59 in 29 scrips out of which short term capital gain is earned only from 27 transactions. It is clear that as far as number of transactions and frequency of the transaction is concerned these are very less and would not indicate that the assessee is involved as a full time trader in the purchase and sale of shares. Further there is no denial of the fact that assessee is a partner in the two partnership firms and managing the affairs and business of the partnership firms. The assessee has used his own funds and funds of his family members and, therefore, no interest was paid on the funds used by the assessee for the purchase of shares and securities. Though in some of the transactions the holding period of th....
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.... circumstances in the year under consideration. In view of the facts and circumstances, we hold that the surplus arising from purchase and sale of shares in the case of the assessee cannot be treated as business income. Accordingly, we allow the claim of the assessee, the extent of treating the capital gain as business income is set aside." 8. Our attention was also drawn to the judgment passed by Hon'ble ITAT in the ITA No. 959/Mum/2011 in the case of ACIT vs. Shri Jatin J Ashar for AY 2007-08 wherein also the identical question was in dispute and the operative para is as under: "5. Having considered the rival submissions and carefully perusal of the record we note that the AO accepted the short term capital gain offered by the assessee on sale of shares for the assessment year 2004-05 to 2006-07. We further note that even for the assessment year 2008-09 the AO accepted the claim of the assessee regarding short term capital gain. Thus, it is clear that prior as well as subsequent assessment year to year under consideration, the AO has accepted the claim of the assessee regarding short term capital gain arising from sale of shares. It has not been brought out on record as how....