AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (2) TMI 1183
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....essing Officer (AO) in the course of assessment proceedings, observed that the assessee has shown income of Rs. 25,18,724/- from Short Term Capital Gains (STCGs) chargeable under s.111A of the Act. The assessment was completed and STCG noted above was taken cognizance of and concessional tax offered @ 15% as specified under s.111A of the Income Tax Act, 1961 (hereinafter referred to as "the Act") was taken note of by the AO. Subsequent to the assessment, the CIT(A) called for the assessment records and observed that most of the transactions in shares on which the assessee has returned STCGs was in the nature of trading and not investment per se. It was observed by the CIT that assessee has wrongly paid concessional tax of STCGs of Rs. 25,18....
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....sed in September and sold in October, Kiridyes were purchased in November and sold in December. A very short duration of possession of shares worth Rs. 25-30 lakhs with such regularity of sale and purchase during the year with a singular motive to make handsome profit clearly shows the intention of appellant as adventure in the nature of trade rather than investment in these shares. Except for shares of 3 and 4 companies, all the other shares were sold by assessee within 1-2 months of their purchases and in most cases in less than 15 days. It is not a case where assessee has applied the profit of Rs. 38.58 lakh earned from F&O segment of share market in any investment. It is a case where assessee has earned profit of Rs. 25.32 lakh from cas....
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....llegation of the CIT and submitted that the surplus of Rs. 25,18,724/- arising on sale of shares have been rightly assessed as STCGs. The detailed reply was filed which is reproduced by the CIT in para-3.1 of its order. The CIT however was not impressed by the submissions on behalf of the assessee and accordingly proceeded to assess the aforesaid income as profits and gains of the business, as against STCG claimed in exercise of power vested under s.263 of the Act. 4. Aggrieved by the action of the CIT, the assessee is in appeal before the Tribunal. 5. The Ld.AR for the assessee Mr.G.C. Domadia heavily relied upon the written submissions filed before the CIT and contended that the STCG offered by the assessee has been accepted by the AO u....
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.... which has given rise to capital gains on its sale. However, it was simultaneously submitted that the loan was taken from its relatives and sister-concerns without interest. It was also propounded that the investment holdings at the end of the year has also been valued at costs as against the ordinary practice of valuing trading stock at "cost" or "market price" whichever is lower. In the backdrop of these factual aspects, it was contended that the view of the CIT cannot be substituted by the view of the AO in the proceedings under s.263 of the Act. For this proposition, the Ld.AR relied upon the judgement of Hon'ble Supreme Court in the case of Malabar Industrial Co.Ltd. vs. CIT reported at (2000) 243 ITR 83 (SC) and judgement of Hon'ble B....
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.... rate of tax applicable thereon. We further observe that the AO has noted that necessary details and evidences thereof have been furnished by the assessee. In the circumstances, it is difficult to accept the allegation that the action of the AO was without requisite enquiry and application of mind on facts. Possibly, the CIT is not happy with the quality of the outcome on the enquiry. However, this by itself would not give occasion to the CIT to pass order under s.263 of the Act. On facts, we note from the order of the CIT itself that the assessee has maintained separate records whereby intention to hold certain shares as capital assets as compared to other class of trading assets of similar nature can be deciphered. This act of the assesse....