2017 (2) TMI 1101

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e circumstances of the case and in law, the Ld. CIT(A) is erred in directing the Assessing Officer to accept the claim of the assessee shown as Short Term Capital Gain at Rs. 1,61,37,023/- and Long Term Capital Gain (exempt) at Rs. 72,355/- out of purchase and sale of shares, instead of "income from business or profession" treated by the Assessing officer, without appreciating the fact that the assessee has indulged in huge volume of share transactions and has devoted most of his time for this activity." 2."The appellant prays that the order of the Ld. CIT(A) on the above ground be set aside and that of the A.O. be restored." 3."The appellant craves leave to amend or alter any ground or add a new ground." 2.During the course of hearin....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....urn as 'income from capital gain' i.e. as 'short term capital gain' or 'long term capital gain' depending upon the period of holding of the shares. 4.We have gone through the orders passed by the Lower Authorities. The only issue to be decided by us is whether the amount of gain earned by the assessee of sale by shares would be assessable under head 'income of capital gains' as was claimed by the assessee in the return of income or as'income from business' as was done by the AO in the Assessment order. The brief background is that assessee's income mainly comprises from income from house property, short term capital gains& long term capital gain on sale of shares and income from other sources. The assessee was not engaged in any other busi....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ng investment as on 31.03.2008 at Rs. 44,17,548/-. From the above and the statement of the capital gain working filed by the appellant before the A.O., it is seen that the appellant undertook share transactions only between November 2007 to March 2008. In view of the above peculiar facts of the case, it cannot be said that the appellant was a regular trader in shares. The A.O. held in page 13 &14 of the assessment order that the appellant used borrowed funds of Rs. 1,30,000/- for purchase of shares whereas the appellant claimed before the A.O. in the letter submitted before the A.O. that the appellant made investment from own funds and the borrowed funds were not used as remarked by the A.O. at the end of page 5 of the assessment order A pe....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....nded by the representative, the major portion of capital gain was made only in 10 scrips which indicated that the appellant was only an investor which the A.O. completely overlooked. Based on the principle of consistency, the appellant is to be treated as investor as held by the Hon'ble Mumbai Tribunal in the case of Gopal Purohit (29 SOT 117) and it was further held in the above case that all the delivery based transactions should be treated as short term capital gain or long term capital gain depending upon the period of holding. The above decision of the Hon'ble Tribunal was upheld by the Hon'ble Bombay High Court (228 CTR 582). Further, there is no dispute that the appellant took delivery of all the rate applicable to the investment. In....