TaxTMI 
TaxTMI 
2018 (3) TMI 137
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....ness income which was rightly accepted by the Assessing Officer as short term capital gain. (b) Ld. Commissioner of Income Tax (A) erred in on the facts of the case and confirmed the treatment of short term capital gain as business income at Rs. 38,35,595/- made by Assessing Officer." 3. Briefly stated, the facts, as culled out from record, are that the assessee is an Individual dealing in shares. Total taxable income of Rs. 93,34,650/- is declared in the return of income filed on 29.10.2005. The assessee has also shown income from speculative share trading, house property income, long term and short term capital gain and dividend income. The case selected through CASS. Notice u/s 143(2) was served on the assessee. Necessary details, as called for, were submitted. The Assessing Officer observed that the assessee has earned dividend income of Rs. 13,51,268/- and also had invested in shares buyt there was no disallowance suo moto made by the assessee u/s 14A of the Act and, therefore, the Assessing Officer made disallowance of Rs. 2,39,108/-. The addition for low household expenses was also made at Rs. 50,000/-. Further, the Assessing Officer while examining the income fr....
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....antly, the rate of taxation in respect of short term capital gain on sale of shares was reduced with the introduction of Security Transaction Tax. The learned counsel for the assessee further submitted that the assessee, however, continued to keep complete record of shares holding that is quantity purchase, date of purchase, cost of purchase, date of sale and sales consideration. The details of share held during the year relevant to the Assessment year 2005-06 are depicted in a chart annexed at Page 9 to 14. He submitted that from the said chart it is evident that the holding of shares ranges from 88 days and above except in one strip in which the assessee has suffered the loss. Therefore, the holding period itself demonstrates that none of the transaction recorded in the chart could be treated as trading in shares. He submitted that the assessee has disclosed income from trading in shares which pertains to intraday trading as well as future and option. The above income is duly accounted for in the profit & Loss account as income from business. The learned counsel for the assessee also submitted that the Assessing Officer has assessed Rs. 38, 35,595 as income from business from out....
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....he sales. 6. On the other hand, the learned DR vehemently argued supporting the order of the Commissioner of Income Tax (Appeals). 7. We have heard the rival submissions. The issue before us relates to short term capital gain of Rs. 76,30,666/- which has been treated as business income by the Commissioner of Income Tax (Appeals) whereas the Assessing Officer treated only Rs. 38,35,595/- as business income. During the course of hearing, the learned counsel for the assessee apart from relying various judgments also referred to Circular No. 6/2016 dated 29.2.2016 issued by CBDT which dealt with the issue of taxability of surplus sale of shares and securities as to whether they are to be taxed as capital gains or business income. The learned counsel for the assessee referred to clause (b) of para 3 of this Circular contending that "in respect of listed shares and securities held for a period of more than 12 months immediately preceding the date of its transfer, if the assessee desires to treat the income arising from the transfer thereof as capital gain, the same shall not be put to dispute by the Assessing Officer." The learned counsel for the assessee submitted that the assesse....
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....essee has shown the purchase and sale of shares as business and has also set off business loss of preceding years against the business income from trading of shares. During the assessment year 2005-06 the assessee changed the modus operandi and did not disclose the closing stock of equity shares in previous financial year as opening stock during the year. The major gain from purchase and sale of shares has been shown as short term capital gain and long term capital gain but the assessee has also done trading in shares during the year. Even before us, the assessee failed to demarket statements along with separate D-mat accounts which can prove that the assessee was maintaining separate records for the equity shares held as investment and the remaining held as business assets. If such details are not provided by the assessee, it becomes very difficult to accept the assessee's contention of running the business of shares as well as investment in shares side by side. It seems that the assessee in order to take benefit of exemption for long term capital gain and lower rate of tax for short term capital gain has changed the treatment of transactions of purchase and sale of shares for the....