TaxTMI 
TaxTMI 
2017 (12) TMI 1116
X X X X Extracts X X X X
X X X X Extracts X X X X
....d in holding that the gain earned by the appellant on share transactions of Rs. 84,81,597/- was liable to be taxed under the head Business income as against Capital gain and consequentally the appellant was not entitled for the setoff of carried forward Short term capital loss of Rs. 71,35,047/- from the said income. 2. On the facts and circumstances of the case and in law the learned CIT(A) erred in holding that use of Portfolio Management Service of HDFC for share transactions is to earn the business income." 3. In this case, return of income declaring income of Rs. 24,77,375/- was filed on 26th July, 2010. Subsequently, the case was selected under scrutiny by issuing of notice u/s. 143(2) of the act on 27th July, 2011. The assessee w....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the major activity of the assessee looking to the above facts and circumstances. Therefore, the assessing officer has assessed the short term capital gain of Rs. 8481597/- as income from business out of share trading activity. 4. Aggrieved against the decision of the assessing officer, the assessee preferred appeal before the ld. CIT(A) who has sustained the addition made by the assessing officer by observing as under:- "3.2 I have carefully considered the facts of the case and the submissions made by the appellant. In this regard, it is seen that Hon'ble jurisdictional Tribunal in the case of Dr Ajay Ranka (ITA No 3302/Ahd/2009) and Seema Ranka (ITA No 3301/And/2009) have held that transactions under the PMS Scheme are to be treate....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ness activity. Consequently the addition of Rs. 84,81,587/- made by the Id A O is confirmed and the ground of appeal No. 1 is dismissed." 5. During the course of appellate proceedings before us, the ld. counsel has furnished the paper book containing written submission, statement of total income, balance sheet and judicial pronouncements etc. He contended that he ld. CIT(A) has erred in holding the purchase and sale of shares as business activity and treating the gain earned as business income in trading of share. On the other hand ld. departmental representative has supported the order of the ld. CIT(A). 6. We have heard both the sides and pursed the material on record carefully. We noticed that the assessing officer has assessed the sho....
X X X X Extracts X X X X
X X X X Extracts X X X X
....io. It was also brought to our notice that the decision of the Delhi bench ITAT in which it was held that gain on sale of shares through the services of portfolio management services will be the business income has been reversed by the hon'ble Delhi High Court vide 367 ITR 1 on 25th April, 2014. We find that Hon'ble Karnatka High Court in the case of CIT vs. Kapur Investment P. Ltd (2015) 234 Taxman 0149 held that profit from investment through portfolio management service either directly or through professionally managed firm, would still remain as profits to be taxed as capital gains as same will not change nature of investment that is in shares, and law permits it to be taxed as capital gain and not as business income. We have also obser....