2016 (11) TMI 1388

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....Business Income' and 14A consequential disallowance for Rs. 1,65,595/-. 2. Facts qua the dispute are that the assessee is a Resident HUF engaged in shares/securities transactions. The return of income for impugned AY was filed declaring total income of Rs. 43,22,899/- which was taken up for scrutiny assessment u/s 143(3) wherein total income was determined at Rs. 42,70.920/- vide Assessing Officer [AO] order dated 15/03/2013. The assessee earned Short Term Capital Gains' [STCG] on securities transactions for Rs. 43,22,899/- besides speculation loss and income from other sources. The AO applied various parameters on the share transaction activities carried out by assessee and relied on various judicial pronouncements and CBDT Instruction ....

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.... contended that the income has rightly been offered under the head 'Capital Gains' as the assessee is a HUF and indulged in share transaction with investment motive. It maintained two separate portfolios viz. trading and investment activities for several years. The loss with respect to trading activities was speculation in nature and hence the same has been offered under the head 'business income'. The income of investment activity has been offered under the head 'capital gains'. It is well settled that the assessee may maintain two separate portfolios. The stand of the assessee has been accepted by revenue in other years also. Further, owned capital was much more than investment in shares which further fortifies the claim of the assessee t....

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....tions in this particular scrip. The holding period ranges from 0 days to 30 days. The assessee has purchased the scrip in 37 days and sold the scrip in 27 days. The frequency and repetitive nature of transaction in one single scrip shows a clear profit motive on the part of the assessee and negates its contention that the assessee has indulged in investment activity. A substantial relief has already been provided by CIT(A) with respect to balance amount. Therefore, we find no infirmity in the order of CIT(A) and dismiss this ground of appeal of the assessee. The case law relied upon by assessee are of no help on the peculiar facts and circumstances of the case. They only affirm the presumption that in case of availability of interest free f....