TaxTMI 
TaxTMI 
2017 (1) TMI 1206
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.... "the Act". 2. We come to the rival pleadings first. The Revenue's sole substantive ground states that the CIT(A) has erred in law and on facts in directing the Assessing Officer to treat assessee's profits amounting to Rs. 63,20,152/- derived from share transactions as capital gains instead of business income as adopted in the course of regular assessment framed on 31.10.2010. The assessee on the other hand assails correctness of the lower appellate order directing the Assessing Officer to treat his share investments having holding period of less than 30 days yielding the profits in question to be his business income. Both the learned representatives are very much unanimous that these two cases raise an identical issue about treatment o....
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.... chand C Shah Vs ACIT, circle- 3, Surat in ITA nos 3554/AHD/2008 four AY 2005-06 and 1932/AHD/2009 for AY 2006-07 held that in cases the shares are held for more than 30 days, the transaction has to be categorised as an investment transaction whereas the sales held for a period up to 30 days, the same shall be treated as business transactions. In arriving at this decision, the ITAT Ahmedabad has considered several decisions of various benches of ITAT, high courts and Supreme Court. The ITAT Ahmedabad has also considered the circular issued by the Central board of direct Taxes and has come to this considered finding. The relevant extract of this order is quoted below- "15. In respect of profit of Rs. 55,40,679/- being 'short-term capi....
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....cate trade, whereas low frequency transitions and high period holdings indicate investment. 17. In this case the assessee has discharged the onus of showing that it is making investment but Revenue is able to show that there are high frequencies and low holdings in many transactions of shares indicating that assessee has some intention of purchasing and selling shares as a trader. The case of the assessee is supported by the fact that it has entered the purchases in the books as investment, shares are valued at cost and Revenue is holding such accounting treatment as investment in the past. Thus, there cannot be a fixed criteria to decide as in the present case whether, assessee has traded in Shares eventhough assessee held them as inves....
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....be earned under the business or to be faxed as short- term capital gain, we hold that if shares are not held even say for a month, then the intention is clearly to reap profit by acting as a trader and he did not intend to hold them in investment portfolio. We believe that if a person intends to hold his purchases of shares as investment, he would watch the fluctuation of rates in the market for which a minimum time is necessary, which We estimate at one month. Where share are held for more than a month, they should be treated as investment and on their sale short term capital gain should be charged. Where shares are held for less than a month, gain on them should be treated as profit from business. 20. The assessee will give the working....
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.... substantive ground as well as its appeal ITA No.1906/Ahd/2011 supporting the Assessing Officer's twin reasoning narrated in preceding paragraphs. 7. We now deal with assessee's cross objection C.O.No.218/Ahd/2011 seeking to treat all his profits from share transactions even having nil holding period as short term capital gains. Learned counsel first of all informs the bench that the assessee has throughout been treated as an investor. We however come to the above extracted chart first of all. It is clear that the assessee has engaged in twelve transactions having nil holding period or maximum a day or two. Learned counsel fails to prove that the same are in any case delivery based transaction having purchase and sale instances on the sa....
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.... 335900 10.08.07 300 198813 137087 129 3 CMC LTD. 05.02.08 1500 1287000 03.0203 1500 1241775 45225 0 4 J & K BANK 18.01.03 1500 1272000 18.01.08 1500 1225200 46800 0 5 LOYED STEEL 14.1207 20000 779000 07.11.07 20000 239650 539350 37 6 MASTEK LTD. 29.01.08 200 566000 29.01.08 2000 546482 19518 7 MOSER BAER LTD. 14.02.08 2000 358000 14.02.08 2000 342300 15700 0 8 SILVER LINE 08.05.07 400 5620 31.03.07 400 1983 3637 38 SONATA SOFTWARE 18.05.07 6000 363560 31.03.07 6000 161868 201692 69 Document 2 10 TATA TEA 14.02.08 1000 795000 14.02.08 1000 756750 38250 11 WIPRO LTD. ....