TaxTMI 
TaxTMI 
2012 (10) TMI 1173
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....e extracted by the CIT(A) in his order at pages 7 to 10, which are reproduced below: " i) I am not a trader in shares. The investment in shares has been done with purely an intention of capital appreciation. Accordingly, the gain from shares has been reeinvested as I do not have any capital. ii) I am not registered with any recognized stock exchange nor do I possess the requisite knowledge to carry on business in shares. iii) The frequency of trading has been on the higher side compared to normal transactions on account of the volatility of the market. The fluctuations in the market were of such nature that it was not advisable to hold onto the shares during such period. iv) Foreign Institutional investors have invested in Indian stock markets in a big way. v) They are not treated as Traders and their income in spite of high frequency and volume of transactions is treated as Capital Gains. vi) Therefore, I submit that the gain from the sale of shares is Income from Capital Gains and not Business Income. vii) The intention was not to carry on trading of shares but only for the purpose of capital appreciation. Therefore the purchase of shares was made with this intentio....
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....(Bonus) 230 4 1,99,851 244 184 Excel Corp 127 4 (56,494) 8 ITD Cem 147 4 67,873 128 9 New STD Eng 180 4 38,939 10 Jain Irrigation Ltd. 153 5 69,585 11 ABG Heavy 245 5 25,874 246 12 Synergy Multy 184 5 47,342 188 188 13 W.S. Industries 217 5 7526 14 D.S. Kulkarni 129 5 85,971 15 UT Ltd. 124 6 (56,051) 16 ION Exchange 185 6 (23,003) 17 Fulford 135 6 (2173) 18 Ceatldm 135 6 (30,685) 19 ABC Bearing (Antif) 126 6 (5123) 127 20 Shreya Ship 122 6 37,760 21 Kalpataru Power 237 6 1,89,138 269 Total 1,57,17,730 xv)The total gain disclosed is ₹ 1,91,97,162 from the sale of all the shares. In respect of shares where the period of holding is more than 100 days as shown above the total gain is ₹ 1 ,57,17,730 which constitutes about 82% of the gain. Therefore it is my submission that the income disclosed under the head capital gains at ₹ 1 ,92,04,038 is to be assessed as short term capital gains. xvi) Your kind attention is invited to pages 7-74 of Paper book wherein the volatile fluctuations in the share market are reflected. The drastic fall in prices compelled me to sell some of....
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....eved, the revenue is in appeal before us raising the following grounds of appeal: "1) The CIT(A) erred in both law and facts. 2) The CIT(A) erred in directing the AO to treat the gains as short term capital gains instead of business income as assessed by the AO. 3) The CIT(A) ought to have appreciated that the fact that AO has correctly treated the income as business income as the intention of the assessee was clear from her transactions that her investment in shares is not for holding the shares for a long time to earn dividends but her investment in shares is to trade in shares and earn profits in short time. The volume, the frequency and the amount of transactions clearly shows the intention of the assessee. 4) The CIT(A) erred in directing the AO to treat the gains as capital gains as the assessment was completed keeping in view the Board Circular No. 4/2007 dated 15/06/2007 wherein the parameters laid down to determine whether the shares were held as stock-in-trade or investment." 7. None appeared on behalf of the respondent-assessee at the time of hearing before us. However, we proceed to decide the appeal after hearing the learned DR and on merits. 8. Before us, th....
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....ce for it than the price at which he originally acquired, if the enhanced value obtained from the realisation or conversion of securities may be profit from business. The distinction whether the investment transaction is a mere realization of the investment or an act done for making profit depends on the question whether excess was an enhancement of the value for realising the shares by a gain in an operation of making profit. If the transaction is in the ordinarily lien of the assessee's business, there would hardly be any difficulty in concluding it to be a trading transaction, but where it is not, the fact must be properly assessed to determine whether it is in the nature of trade. The surplus realized on the sale of share would be capital, if the assessee an ordinary investor realising his holding, but it would be revenue if he deals with them as a trader. if the assessee is an ordinary investor, the income arising out of sale of shares is capital gain. On the other hand, if he trades in shares in regular manner, it is income from business. If an individual invests in shares for the purposes of earning dividend, he is not carrying on a business. If the assessee is holding share....