TaxTMI 
TaxTMI 
TaxTMI 
2017 (1) TMI 504
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.... and the Revenue read as under:- Assessee's appeal in ITA No.328/Ahd/2014 for AY 2010-11 1. On the facts and in circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Appeals) has erred in partly confirming the action of Assessing Officer in treating the capital gains income arising on sale of shares as business income in respect of shares where holding period is less than one month. The learned Commissioner of Income Tax (Appeals) ought to have treated entire gain arising on sale of shares as Capital Gains. 2. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Appeals) has erred in confirming the action of the assessing officer in disallowing Rs. 1,75,069/- u/s.14A whereas interest claimed by the assessee is Rs. 60,576/- only. Revenue's appeal in ITA No.357/Ahd/2014 for AY 2010-11 (1) On the facts and circumstances of the case, whether the Ld.CIT(A)-II, Surat was justified in treating income from share trading as Long Term capital Gain and Short Term capital Gain instead of Business Income treated by the AO, by observing that the assessee has indulged in high magni....
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....ave duly considered the above submission of the appellant and find that all the above three grounds of appeals taken by the appellant are identical to the grounds of appeal no.1,2,& 4 taken in the immediate proceeding assessment year, i.e. A Y 2007-08 vide Appeal No.CAS/II/287/09-10, which has been partly allowed by the undersigned vide order dated 15.09.2010. In view of the same, the issues involved in the instant appeal are found to be covered by the above appellate order. I, therefore, following the above appellate order dt 15.09.2010 in the appellant's case in Asstt.Year 2007-08, direct the Assessing Officer to treat the capital gain from sale of shares held for a period of 1 year or more as 'Long Term Capital Gain and to assess the same under that head. 4.2. In so far as capital gain declared by the appellant under the head short term capital gain is concerned, I direct the assessing officer to apply the ratio of the decision in the case of Shri Sugamchand C. Shah, vide ITAT, Ahmedabad Bench 'D' order dated 29.01.2010 in ITA No.3554/Ahd/2008 and 1932/Ahd/2008, for the purchase of determining the short term capital gain, i.e. the shares which are held for a month and more bu....
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....sdirected in law. It was submitted that the scheme of Act does not provide for such distinction with reference to period of holding. The Ld.AR on facts contended that the assessee is not a habitual trader in shares and has declared the shares under the head "investment" in its books of accounts. Thus, the shares were held as capital assets with an intention to benefit from its capital accretion. He adverted to the assessment order and submitted that the shares are held as investment since long and the Income Tax Department as duly accepted the action of the assessee upto AY 2005-06. It was submitted that the assessee was actively engaged in textile trading as reflected from the high volume thereto which fact is also on record. During the relevant assessment year, the assessee has entered into 79 transactions in STCG only which includes 25 transactions of scrips held for less than 30 days give rise to a capital gain of Rs. 5,58,687/- and of all 54 transactions of scrips held for more than 30 days to one year yielding to a capital gain of Rs. 50,98,907/-. The LTCGs of Rs. 18,96,152/- was earned from above 19 transactions or so. It was therefore contended that surplus arising on sale ....
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....by the Coordinate Bench of the ITAT in ITA Nos.1970 & 2247/Ahd/2011 & Ors. for AY 2008-09, order dated 31/05/2016 in assessee's own case while deciding the issue in favour of assessee. The relevant paras of the Tribunal's order read as under:- "19. We have heard the rival contentions and have carefully perused the orders of the authorities below. The dispute is regarding the nature of income on sale and purchase of shares by the assessee. The issue, whether the income from sale and purchase of shares in a particular case should be treated as capital gain or as business income has been a debatable issue and there are conflicting decisions of the Tribunal on this issue. Each case is, therefore, to be based on its own factual situation. A perusal of the profit and loss account of the assessee show that the assessee has separately shown Derivative profit, long term capital gains/short term capital gains on shares. In the balance sheet, the assessee has shown shares under the head 'investment'. These investment shares have been valued at cost. The Hon'ble Supreme Court in the case of CIT Associated Industrial Development Co Pvt. Ltd. 82 ITR 586, which decision has also bee....
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....ital gain or business income) shall continue to be decided keeping In view the aforesaid Circulars issued by the CBDT. 21. The allegation of the A.O is that the assessee has indulged into high frequency transaction. This in itself could not mean that trading activities have been carried out. A prudent investor always keep a watch on the volatility of the market and makes sound investment decision in accordance with such market fluctuation and has the liberty to liquidate its investments in shares as and when necessary. The law itself has recognized this fact by treating the same as short term capital gains for shares held less than 12 months and long term capital gains where the shares are held for more than 12 months. Had this been not the case, all the gains on shares would have been considered as business income only. The fact that the law recognizes such volatility and has specifically provided a separate holding period in respect of such shares makes it very clear those gains on such shares having a holding period of less than 12 months and held as investment would be considered as short terms capital gains only. Thus the assessee's claim cannot be negated on the basis of f....