TaxTMI 
TaxTMI 
2015 (5) TMI 1139
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....ons 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 Rs. 1,32,595 Income from House Property Rs. 92,400 CAPITAL GAINS....
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....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 360 days 373500 Above 1 year (534055) Total 64362026 SUMMARY Short Term Capital Gains 64896080 Long Term Capital Loss (534055) 2.4 It is also noted by Ld. CIT(A) that major part of the capital gain has been earned by the assessee only two scrips namely Jaya Corp. Ltd. and Sahara Housing Corporation Ltd., vide which these assessees have earned a sum of Rs. 6.49 crores and Rs. 4.59 co....
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....re 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. Further the appellant paid STT at the rate applicable to the investor and all the transactions were based on delivery as evidenced by the D-mat account. Further, it is seen that the appellant has held the shares for considerable period and the major portion of short term capital gain was earned by holding shares for 90 to 210 days. Further the appellant earned around 4.59 cr. From 2 scrips after holding them for considerable period as brought out above. As held by the Hon'ble Mumbai Tribunal i....
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....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 based on the sound rational reasoning. A prudent investor always keeps a watch on the market trends and, therefore, is not barred under law from liquidating his investments in shares. The law itself has recognized this fact by taxing these transactions under the head "Short Term Capital Gains". If the Assessing Officer's reasoning is accepted, then it would be against the legislative intent itself. It is always a vexed question to find out as to whether the assessee was holding the shares as stock in trade or under an investment portfolio parti....
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....f 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 considered. So far as it relates to the case of individual, for immediate preceding assessment year similar claim has been accepted by way of an assessment order passed under section 143(3) of the Act. According to the figures placed in the chart the assessee in earlier year has dealt in number of scrips i.e. 11 and in respect of A.Y 2008-09 the scrips dealt in are 16. There is not much difference in the position of sale and purchase of shares except higher value of the shares", the period of holding is also substantial and main income has been earned by the assessee i....