TaxTMI 
TaxTMI 
2017 (12) TMI 653
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....ment year, therefore merely considering the value, volume and frequently of transaction, treating the assessee as trader is contrary to the facts on record. 2. The Learned CIT(A) failed to appreciate that the assessee is consistently showing the same as investment over number of years and no borrowed funds were utilised for purchase of shares. And the intention of assessee was also to treat the shares as investments and considering the change in pattern of investment, the assessee is acting as a prudent investor, therefore the-addition of Rs. 3,51,66,426/- as Business Income as against Short Term Capital Gain, is not justified. 3. Without prejudice to above the shares treated / assessed as investment in earlier years cannot be assessed as 'business income' in subsequent years, thus action of department is contrary to its own action taken in earlier years. Further the department is inconsistent in its stands in different years . Therefore, the addition made of Rs. 3,51,66,426/- may be deleted. 4. The learned CIT(A) erred in confirming the order of the Assessing officer for not allowing the set-off b/f loss of the earlier years . 2. In the presen....
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....cts in respect of share transactions mentioned in the assessment order and emerging from the information on record are as follows: (1) The assessee has transacted in fifty three kinds of shares. (2) The number of shares transacted is more than 1,00,00,000. (3) The volume of turnover is also more than 70,00,00,000. (4) The details in respect of shares which were sold within a period of less than fifteen days were as follows: (a) Total type of shares - 23. (b) Total number of shares transacted - 91,68,615. (c) Total amount of profit earned - 94,17,857 which is 27% of the total Short Term Capital Gain earned, (5) The holding period for nearly all the shares in respect of which Short Term Capital Gain is shown was less than six months. (6) There were also instances of day-trading transactions. Total 2,99,829 number of shares were transacted within a day and the total sale value of such transactions was Rs. 5,25,30,000/-, (7) The total amount of dividend earned by the appellant in the F.Y.2011-12 was Rs. 2,91,627/- whereas the total investment in shares as on 31/03/2012 was Rs. 11,20,67,592/-. Thus....
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....dated 15/06/2007 on the matter and also in view of various judgments of various judicial authorities the matter has to be decided in the light of the facts of each and every case. 5.3 In the present case, nearly all the parameters such as frequency of transactions, repetitive transactions in same scrip/ duration of the holding period, amount of dividend earned, volume of transactions, scale of income earned compared to the principle activity etc. are clearly indicating that the correct nature of such transactions is of trading in shares. 5.4 The Hon'ble ITAT, Mumbai in the appellant's own case has dealt in detail with this matter for A.Y. 2006-07. The facts in respect of all the parameters mentioned in the earlier paragraph were in fact occurring at a milder scale in A.Y. 2006-07 as compared to the A.Y. 2012-13, the year under consideration. The relevant paragraphs of the order of ITAT, Mumbai are reproduced below: "9. The issue as to whether the assessee is an investor or a trader has to be decided based on the facts of each case. In this case the assessee has submitted a statement of holding as on 31-03-2006. He has not furnished the period of h....
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.... too holding the shares for very short period. Investors do not sell shares the same day or the next day for a loss. The fact that the assessee has non-delivery based transaction show that he is using his knowledge, skill and resources to deal in shares. In this factual matrix, we are unable to agree with the findings of the ClT(Appeals) that the assessee is a mere investor in shares. Just because the assessee has income from certain other sources, it does not mean that the assessee would not have income from trading in shares. When a person has gross professional fee of Rs. 11.29 lakhs and turnover of purchase and sale of shares running into crores of rupees and when such trade results in a profit of Rs. 1.17 crorest it cannot be said that the assessee is not in the business of purchase and sale of shares as it is not his main occupation. The fact show that the main occupation of the assessee is to buy and sell shares. 11. It is well settled that each case has to be decided based on the facts and circumstances of the case. In the case of Bharat Kunverji Kenia (supra) the case is different on facts as the assessee had not employed any infrastructure for purchase and sale o....
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....eeping in view the above principles, the facts in the present case of the assessee are examined. The assessee during the entire previous year had entered into transaction of purchases and sale of shares of about 32 companies totaling to Rs.l,87,83,440/- and these shares were sold for a value of Rs,2,69,71,368/-. The above transactions were effected by actual delivery of shares at the time of purchase and sale of shares except in the case of Hiran Orgo Chem, where there are 19 transactions of purchases and sale on the same day of various number of shares involving a total purchase of Rs. 7,00,457/- and sale of Rs. 6,95,224/- with a loss of Rs. 5,232/-. There were expenses incurred with reference to brokerage, interest, security, transactions, bank charges etc. totally to Rs. 1,67,829/-. In all the transactions where capital gain shown during the year the holding period was less than even 6 months. Most of the gain earned by the assessee is in the shares held for a period 31 days to 90 days to an extent of Rs. 30.81 lakhs and 90 days to 180 days, i.e. Rs. 51.29 lakhs. In fact there were no shares which were held for more than 6 months period on which gains were earned. Thus the maxim....
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....ny positive income under the head 'capital gains' due to which that particular issue was not at all examined by the department. Thus, appellant's contention regarding application of principle of consistency is devoid of factual context. Attention is also invited to the remarks made by the IT AT, Pune in appellant's own case referred in earlier paragraph in which the application of the ratio of decision of Bombay High Court in the case of Gopal Purohit has been defended on merits. 5.8 Though the issue in respect of treatment of Long Term Capital Gain was not before Hon'ble ITAT for A.Y. 2006-07, the ITAT has however commented about non-applicability of its treatment as trading income to the transactions of long term capital gains in its decision, The view formed by the ITAT in this regard is also required to be followed in this case for the A.Y,2012-13 mainly because of the facts of the case. 5.9 It is seen that the shares from the sale of which appellant has earned long term capital gains are not the one which also appear in the list of heavily or repetitively transacted shares. The Long Term Capital Gain has been earned from the sale of eleven....