TaxTMI 
TaxTMI 
2015 (5) TMI 1139
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....d, while some are not sold due to market conditions and their holding with assessee remains beyond few days, it will not change the nature of transactions and the assessee is very well engaged in the business of share trading, which denote that the motive of the assessee is to carry on business in shares to book profit rather than investment in shares. 2. The appellant prays that the order of the Ld. CIT(A) on the above grounds be set aside and that of the A.O. be restored. Figures mentioned in ITA No.3359/Mum/2011 are Rs. 6,48,96,080/- and Rs. 5,34,055/- respectively. 2. Both these appeals were argued together by both the parties. It was admitted that facts in both the appeals are almost same. 2.1 Assessee in ITA No.3357/Mum/2011 is an individual and assessee in ITA No.3359/Mum/2011 is HUF of the assessee in ITA No.3357/Mum/2011 The assessee in ITA No.3357/Mum/2011 is retiree from State Bank of India and his date of birth is 29/1/1931. Therefore, as on 31/3/2008 the age of the assessee is about 77 years. The composition of income of both the assessee's mentioned at page -2 of the order of Ld. CIT(A) is as under: ITA No.3357/Mum/2011: Income from Salalry ....
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....rket Value of Investment at the year-end 2006-07 3137511 4266015 5 7421024 2007-08 38272428 41190800 16 39883914 2008-09 64362026 68452848 19 56592730 2009-10 (27960806) 32843843 11 161301147 2010-11 13114648 57446407 16 71232338 2.3.2 The holding period of the shares and the gain arising to the assessee in the case of individual have been described in the following chart at page 7 & 8 of the order of Ld. CIT(A). ITA No.3357/Mum/2011: Holding periods Capital Gains/(Loss) 1 to 90 Days 17133631 91 to 150 days 23240654 151 to 210 days 41637042 211 to 300 days 55379 301 to 360 days 14650 Above 1 year (36466) Total 82044891 SUMMARY Short Term Capital Gains 82081357 Long Term Capital Loss (36466) 2.3.3 Similarly, this period for HUF has been described in following chart appearing at page 7 & 8 of the order of Ld. CIT(A), which read as under: ITA NO.3359/MUM/2011: Holding periods Capital Gains/(Loss) 1 to 90 Days 21896644 91 to 150 days 36898108 151 to 210 days 2444347 211 to 300 days 3283481 301 to....
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....aken by the AO. Admittedly the appellant admitted the profit on sale of shares under the capital gain in the earlier years. It is true that the AO did not select the case for scrutiny in the earlier assessment years. However, the appellant is consistently following the method of admitting the profit on sale of shares under the head capital gains. Further, it is seen that the AO was under the impression that the appellant was admitting income from sale of shares under the head business whereas there was no such income admitted by the appellant. The AO has narrated many incorrect facts in the assessment order as brought out above. Admittedly, the appellant admitted the shares held by him as investment in the balance sheet which indicated the intention of the appellant to hold them as investment. Further there are no borrowed funds utilized for purchase of shares. As seen from the balance sheet actually there is no borrowed funds at all. Thus it is clear that the appellant as an investor purchased shares and the same was consistently shown as investment in the balance sheet filed with the returns of income and the profit on such sale of shares was admitted under the head capital gain.....
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....eo Poly Pack (P.) Ltd. [2000] 245 ITR 492. 5.4 Recently the Hon'ble Mumbai Tribunal in the case of DCIT vs. SMK Shares and Stock Broking Ltd. in ITA No.799/Mum/2009 dt. 24/11/2010 for A.Y 200506 held as under in para 13. "13. CBDT vide Circular No.4/2007 dated 15th June 2007, has observed that whether a particular holding of shares is by way of investment or from part of the stock in trade is a matter which is within the knowledge of the assessee who holds his shares and he should, in normal circumstances, be in a position to produce evidence from his records as to whether he is maintaining any stock-in- trade or holding the shares by way of investment. In the present case, it is not disputed that the assessee had maintained this distinction in its records. It is true that volume of transaction is an important indicator of the intention of the assessee whether to deal in shares as trading asset or to hold the shares as investor but certainly not the sole criterion. In our considered opinion, the Assessing Officer's conclusion that since sale and purchase had been determined by the volatility in the market, the same is against the basic feature of investor, is not ....
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....e characterized as income earned out of business activity. Thus, she pleaded that Ld. CIT(A) has committed an error in accepting the claim of the assessee. Order passed by Ld. CIT(A) should be set aside and that of AO be restored. 5. On the other hand, it was submitted by Ld. AR that AO did not appreciate the facts of the case. In the case of individual in immediate preceding assessment year the claim of the assessee has been accepted by way of an order passed under section 143(3) of the Act. He submitted that the activity of the assessee of sale and purchase of shares remain the same in the impugned assessment year and activities is also similar in the case of individual and HUF. Thus, it was pleaded by Ld. AR that keeping in view the facts and figures mentioned in the order of Ld. CIT(A), which are depicted in various charts, it cannot be held that the activities carried by the assessee of sale and purchase of shares was in the nature of "business". Thus, it was submitted by Ld. AR that Ld. CIT(A) has rightly concluded that such income of the assessee was assessable under the head "capital gain. 6. We have heard both the parties and their contentions have carefully been con....